Gov’t warns chicken joints about price hikes

The government announced Tuesday tougher measures on chicken franchises planning to raise prices after the outbreak of avian influenza virus caused poultry prices to spike.

According to the Ministry of Agriculture, Food and Rural Affairs, the government will consider having chicken chains undergo tax investigation to find out whether their menu price hikes were justified.

“We will ask the National Tax Service to proceed with tax investigations of chicken franchises to see if they took unfair profits by raising menu prices,” the ministry said in a press release Tuesday.

BBQ Chicken, Korea’s biggest chicken chain, said it will raise the price of chicken on its menus by 9 to 10 percent starting next week. This raised concerns that other restaurants will take similar measures as BBQ, which is run by Genesis BBQ.

According to the Agriculture Ministry, chicken franchises make contracts with poultry distributors six months or a year before deliveries, so their costs are not affected by the temporary factors such as the AI virus.

“Their prices aren’t heavily affected by rising retail prices,” the ministry added.

Government officials planned to hold a meeting with franchise representatives on Wednesday, but some are not planning to attend.

BY KIM YOUNG-NAM [kim.youngnam@joongang.co.kr]