Ottogi ups prices as inflation leaves it with no choice
Ottogi is increasing the price of Jin Ramen and two other products for the first time in over a decade.
The products will cost an average 11.9 percent more from Aug. 1.
Jin Ramen will retail for 770 won (68 cents) per a pack from next month, up 12.6 percent. Both mild and spicy versions are covered by the change.
Snack Ramen will go from 606 won to 676 won, a 11.6 percent increase, while the price of Yukgaejang, a bowl-type ramyeon product, will increase 8.7 percent to 911 won.
Ottogi said the price increases were inevitable due to the rising costs of raw materials like flour and palm oil and the increase in wages.
The last time the food company raised its ramyeon prices was in April 2008. It reduced the price by up to 6.7 percent in 2010 to help Korean consumers, according to the company.
With the price increase, Ottogi said it will improve the quality of products and increase the volume of production by investing more in manufacturing facilities and hiring more employees.
“Considering the impact of ramyeon on consumer prices, we have tried our best to not raise the ramyeon prices by reducing costs in other areas, such on raw materials and packing materials. But the price increase was an inevitable decision,” said a spokesperson for Ottogi. "As always, Ottogi will repay customers with better products and services."
Industry rivals Nongshim, known for Shin Ramyun, has been maintaining ramyeon prices since December 2016, while Samyang Foods, with Samyang Ramen and Spicy Buldak Ramen, has not upped ramyeon prices since May 2017.
The increase by Ottogi may lead other companies to follow suit, as the prices of raw materials like wheat and palm oil have increased.
The prices of wheat in May jumped 27 percent compared to same month a year earlier, while the price of palm oil rose 71 percent on year, according to a report by Daishin Securities.
BY SARAH CHEA [email@example.com]