Nongshim raises its prices on ramyeon and other snacks
Nongshim is raising its ramyeon and snack prices due to the growing cost of raw materials and the company’s low performance.
After the raise, the price of Nongshim's Shin Ramyun will increase by 10.9 percent and Neoguri 9.9 percent, according to the company on Wednesday.
Based on prices at discount marts, the price of Shin Ramyun is expected to increase from the current average of 736 won ($0.55) to 820 won.
The price raise comes a year after the company increased its ramyeon prices in August last year and six months after it raised the prices of its snack.
Last August, the company raised prices for its major ramyeon brands an average of 6.8 percent, upping Shin Ramyun’s price by 7.6 percent.
Prices of 23 snack items will also be raised.
The price of Saewookkang, or shrimp-flavored chips, will rise 6.7 percent from the current average of 1,100 won to 1,180 won. The price of its Honey Twist Snack will increase by 5.9 percent.
The company explained the high production cost due to inflation has led it to increase the prices of these food items.
Local suppliers raised the costs of raw ingredients, such as flour, after the second quarter, adding more burden to the company, Nongshim said.
“We internally made efforts to cut costs and increase business efficiency in order to not raise the prices of ramyeon and snacks, as the raise would affect the consumer price index,” said a spokesperson for Nongshim.
“But increasing the price was inevitable as the company saw a big deficit in the second quarter in the domestic market," the spokesperson said.
“An immediate price rise is needed at the moment, but considering the stability of consumer prices, we decided to up the prices after the Chuseok holidays.”
The price adjustments will be enforced from Sept. 15, after the Chuseok harvest festival holidays.
Nongshim’s revenue rose 17 percent on year, but recorded an operating loss in the second quarter, the first time in 24 years that the company recorded a loss in the domestic market.
Nongshim’s move to raise prices after the holidays is anticipated to cause other big ramyeon makers, such as Ottogi and Samyang Foods, to also raise their ramyeon prices.
Following Nongshim's lead, Ottogi increased its ramyeon prices by 11.9 percent on average last August. A month later, Samyang Food also upped its major ramyeon price by 6.9 percent, and Paldo by 7.8 percent.
BY CHO JUNG-WOO [email@example.com]