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Food News Clipping

December 2010

2011.01.06

 

Korea Plans to Demand Concessions on Pharmaceutical – Agricultural Issues if the U.S. Insists on Extending Tariff Removal Schedule for Korean Cars, Korea-U.S. FTA Negotiations [Korean, OSY]

http://news.donga.com/Economy/3/01/2010

Summary: According to the Korean government official involved in the FTA negotiation with the U.S., Korea plans to demand further concessions on pharmaceutical and agricultural issues to the U.S. as a counter measure to the U.S.¡¯s strong position on the auto industry issues.  Korean government has no plan to make any change in the existing agreement on the beef issue.  Negotiation team may walk out the meeting table if the U.S. demands additional negotiation on the beef issue.

 

Public Survey Finds ¡°44% Yes¡±, ¡°27% No¡± to Ratification of KORUS FTA [Korean, OSY]

http://pann.news.nate.com/info/250204600

Summary: A public survey administered by RealMeter on Dec. 6 with 700 Korean adults found that 44 percent of respondents supported ratification of KORUS FTA by the Korean national assembly, while 27 percent opposed to ratification (29 percent replied ¡°undecided¡±).  However, 46 percent of respondents opposed to the results of additional negotiation, while 39 percent supported.  In particular, people in 20¡¯s through 40¡¯s showed higher rate of disapproval on the outcome of additional negotiation.  People in 50¡¯s was the only group that showed higher approval rate on additional negotiation.  White collar group showed higher approval rate (56 percent), while blue collar group showed higher disapproval (66 percent).

 

Largest Labor Union in the U.S. ¡°Against KORUS FTA¡± [Korean, OSY]

http://news.mk.co.kr/v3/view.php?sc=3000000

Maekyung Economic Daily News, Dec. 10

Summary: AFL-CIO, the largest labor union in the U.S. with 12.2 million members, released a statement on Dec. 9 that it did not support the KORUS FTA.  AFL-CIO claimed that the KORUS FTA did not meet the requirements that the union set, including improving the rights of labor workers.

 

¡°Delay in Ratification of KORUS FTA will Expand Loss of Opportunity to Korea¡±, Gong-Il Sa, Head of KITA [Korean, OSY]

http://www.hankyung.com/news/app/newsview.php?

Hankyung Daily Economic Newspaper, Dec. 18

Summary: In a FTA seminar hosted by Korea International Trade Association (KITA) on Dec. 17, Gong-Il Sa, head of KITA, emphasized in his opening remarks that delay in ratification of KORUS FTA means loss of opportunity to South Korea.  He requested that all Koreans join forces to get the agreement ratified in the national assembly as soon as possible.  Jong-Hoon Kim, Korean government representative of trade negotiation, said in his presentation that the agreement made in additional negotiation had opened an opportune timing to put an end to the three year and half delay in the ratification of KORUS FTA.

 

 

None

 

3. Economic Issues

 

None 
 

4. Grain & Oilseed Issues

 

None 
 

5. Livestock Issues

 

Beef, Pork Belly Cut Meat, Beer Are More Expensive in Korea than in Developed Countries [Korean, OSY]

http://economy.donga.com/0113/3/0113/2010

Summary: A recent report by Consumer Protection Agency indicated that among the 48 consumer products surveyed, 18 products were more expensive in Korea than in the seven developed countries counter-surveyed, including the U.S., Japan, France, and Germany.  Products that were more expensive in Korea included local beef (61 percent more expensive on average), tomato (50 percent higher), pork belly cut meat (27 percent higher), pizza (24 percent higher), beer (23 percent higher), garlic (20 percent higher), and imported canned beer (30 percent higher).  In an effort to lower the price of key consumer products, the ROK government has decided to lower the import tariffs on related products.  Import tariffs will be lowered on snack food (from the current 8 percent down to 6 percent), garlic (from 50 percent down to 10 percent), and wheat flour (from 4.2 percent down to 2.5 percent).  Existing temporary tariff reductions will also be extended next year on vitamin (from 6.5 percent down to 4 percent) and sugar (from 35 percent down to zero percent), among others.  ROK government will also invest funds to increase efficiency of the distribution channel for locally produced agricultural products, which will help lower the price of related products.  Earlier in October, the government launched ¡°consumer price monitoring team¡± that is participated by 745 housewives.

 

S. Korea confirms bird flu outbreak in southern province (English, CSY)

http://english.yonhapnews.co.kr/business/2010/12

Full text: The South Korean government confirmed on Tuesday a bird flu outbreak in a southwestern region of the country, a main winter habitat of migratory birds. The agricultural ministry said the state veterinary service confirmed that the bird flu virus was found in one of the blood samples sent from Iksan, North Jeolla Province.  The ministry conducted an emergency disinfection of the area around the Mangyeong River, where the infected wild bird was found, and put an area within a 10-kilometer radius from the site of the outbreak under intensive care.

 

There are about 219 chicken farms and 13 duck farms in the specially designated area, according to government figures.  "This case of bird influenza was found in a wild bird, so the virus may not have been spread to farm-raised poultry yet," a senior ministry official said, requesting anonymity.

 

12 Milk Companies Charged 19 Billion Won of Fine for Price Fixing [Korean, OSY]

http://www.ytn.co.kr/_ln/0102_201012191710282363

Summary: Fair Trade Committee announced on Dec. 19 that it has decided a total of 19 billion won of fine to 12 local milk producers for price fixing in September 2008.  Fair Trade Committee¡¯s report indicated that the price fixing had resulted in an increase of 11 to 19 percent of retail price.

 

Distribution History Labeling Mandated on Imported Beef from Dec. 22 [Korean, OSY]

http://www.yonhapnews.co.kr/economy/2010/12/21/

Summary: Imported beef has become subject to the distribution history labeling regulation on Dec. 22.  As a result, all imported beef sold in Korea should have a tracking number on the packaging label, which allows consumers to track the distribution history information (country of origin, slaughter house, processing plant, exporter, importer) of the product on the Internet (www.meatwatch.go.kr).  Tracking service will also become available through smart phones in Jan. 2011.

 

Gov¡¯t to Introduce Preapproval System on Livestock Farms over 50 sq. Meters Next Year [Korean, OSY]

http://www.hankyung.com/news/app/newsview.php?aid

Summary: Ministry of Agriculture, Forestry, Fishery and Food (MIAFFF) reported to the president MB Lee on Dec. 27 that the ministry will introduce a preapproval system on local livestock farms over 50 sq. meters.  The new regulation will also mandate sanitization control on all vehicles and people that visit the livestock farm.  The farms will be required to keep a record of all visitors and sanitization history.

 

 

New Soju by Jinro Contains Only 15.5 Percent Alcohol and Targets Young Consumers [Korean, OSY]

http://www.hankyung.com/news/app/newsview.php?aid

Summary: Alcohol content of Soju has been lowered in recent years to target younger consumers.  ¡°Book Marks¡±, a new Soju launched by Jinro contains the least amount of alcohol, 15.5 percent.  The market share of ¡°weaker¡± soju products that contain less than 17 percent alcohol has shown a steep increase from 1.7 percent last year to 3.7 percent this year through the third quarter.  Market analysts agree that expansion of weaker soju market has something to do with a significant shrink of Sake type rice wine sales in recent years.  The volume of Sake type rice wine sales has shown a sharp decline from 400,000 cases per month 10 years ago down to 150,000 cases a month these days.

 

Shinsegae E-Mart Hires Ex-Sam¡¯s Club Purchasing Director as Executive Officer for International Product Purchasing Division [Korean, OSY]

http://economy.donga.com/Economy_RealTime/3/01

Summary: Shinsegae E-Mart announced on Dec. 1 that it hired Christopher Kellerhan as the head of its international purchasing division.  Mr. Kellerhan worked in Wal-Mart and Sam¡¯s Club as the purchasing director.  

 

Price War between E-Mart and COSTCO Slashes Price of Sin-Ra-Myon (Popular Instant Noodle Brand) to Half of Regular Market Price in Ten Days [Korean, OSY]

http://www.hankyung.com/news/app/newsview.php?aid

Summary: The price war exchanged between Shinsegae E-Mart store and COSTCO store in Yangjae-dong area Seoul has reduced the retail price of Sin-Ra-Myon, a leading instant noodle product, down to 8,790 won per box (30 packs of noodles in a box) on Dec. 4, which was about a half of the regular retail price.  Observers agree that the two stores may continue the chicken game for some time to come because both stores are fighting to be the price leader in the target market.

 

Effects of KORUS FTA on Consumers:

U.S. Pork Meat: 3,810 > 3,115 Won (1 kg)

U.S. Orange: 800 > 530 Won (each)

U.S. Grape: 5,980 > 4,120 Won (750g pack)

California Almond: 8,980 > 8,310 Won (600g pack)

California Walnut: 10,800 > 7,450 Won (500g pack)

Robert Mondavi Cabernet Sauvignon: 78,000 > 66,300 Won (bottle)

[Korean, OSY]

http://economy.donga.com/Economy_RealTime/3/01/2010

Summary: As Korea and the U.S. agreed on pending FTA issues earlier this week, Korean retailers and industries are busy analyzing expected effects of the KORUS FTA.  From January 2016, price of imported American pork meat will be 60 percent cheaper than local pork meat due to the abolition of 25 percent import tariff.  FTA will also have a significant impact on the fresh fruit market.  According to Lotte Mart, American fresh fruits currently account for 15 to 20 percent to total fresh fruit sales in the store.  FTA will obviously increase American fruits¡¯ market share.  Retail price of California orange will be lowered from current 800 won each down to 530 won due to the elimination of 50 percent import tariff.  However, those agricultural products such as rice, lettuce, and cherries that are excluded from the FTA will not be affected.

 
 
 

Instant Noodle Industry Under Cost Pressure due to Surging International Price of Palm Oil and Wheat [Korean, OSY]

http://www.hankyung.com/news/app/newsview.php?aid

Summary: International prices of key ingredients, such as wheat and palm oil, have surged to a record high level.  Price of wheat in Chicago CME market marked $7.93 per bushel on Dec. 6, 14.84 percent higher than one week before.  Price of palm oil in Malaysia future¡¯s market marked 3,610 Ringgit per ton, up 13.1 percent from one month ahead.  Local instant noodle manufacturers have all reported significant decline in operation profit this year through the third quarter.  Nongshim reported 12.7 percent decline in operation profit, while Samyang reported 55 percent decline compared to the same period last year.

 

Burger King Raises Prices of Hamburgers by 200 Won Each [Korean, OSY]

http://finance.daum.net/news/finance/all/MD201012

Summary: Burger King has raised prices of all hamburger menus by 200 won on Dec. 8.  For example, Whopper set menu price was raised from 6,300 won to 6,500 won.  Depending on the previous price, the increase was as high as 9 percent of the previous price.  Burger King explained that increased cost of raw ingredients, in particular vegetables and soda beverages, were the cause of the price increase.

 

Lotte Mart Withdraws from Low Price Fried Chicken Business [Korean, OSY]

http://news.donga.com/Society/3/03/20101214/33267846/1

Summary: Lotte Mart, the third largest hypermarket chain in Korea, announced on Dec. 13 that it had decided to stop selling ¡°Tong-Keun (big size) Chicken¡± from Dec. 16.  Tong-Keun Chicken, low-price fried chicken the chain store launched one week ago, has been criticized by consumer groups as an example of large-scale companies¡¯ greed expansion into mom-and-pop businesses.  Tong-Keun Chicken was sold at 5,000 won per 900g package, which was less than half the price of fried chicken offered by regular fried chicken delivery outlets.

 

Lotte Mart to Open Its 80th Store in China [Korean, OSY]

http://www.yonhapnews.co.kr/economy/2010/12/17/0318

Summary: Lotte Mart, the third largest hypermarket retail chain in Korea, announced that its 80th store in China will be open on Dec. 18.  The new store follows a standard layout of regular Lotte Mart store with 8,600 sq. meter space.  Lotte Mart has expanded into foreign markets over the years, and with opening of the 80th store in China, the total number of stores it operates in foreign market will be 104.  The number of Lotte Mart stores in Korea is 88.

 

Harvests of Local Cabbage, Radish, and Beans Decline 25 Percent This Year [Korean, OSY]

http://www.yonhapnews.co.kr/economy/2010/12/21/

Summary: According to the report by National Statistics Office, harvests of local agricultural products in general showed a significant decline this year.  Harvest of winter cabbage this year marked 1.2 million tons, down 25 percent from last year.  Winter radish harvest also declined 24 percent from last year to 0.47 million tons.  Harvest of other products also declined: beans (105,000 tons, 24 percent down), Korean pear (308,000 tons, 25 percent down), and apple (460,000 tons, 7 percent down).

 

Gov¡¯t to Lower Import Tariffs on 67 Products to Stabilize Consumer Price [Korean, OSY]

http://www.yonhapnews.co.kr/economy/2010/12/20/030100

Summary: Ministry of Planning & Finance announced on Dec. 21 a list of 67 products that will be subject to temporary import tariff reduction in the coming year.  The reduction will be as high as 40 percent point off the regular tariff rates.  Import tariffs on 22 products, including table sugar, raw brown sugar, multi-vitamins, wheat, cookies, and garlic, will be lowered during the first half of next year.  Import tariffs on 45 products, including feed corn, will be lowered during the full year 2011.  On the other hand, the gov¡¯t also announced a list of 15 products, including frozen Pollack, frozen Saury, frozen Basilewsky, Pyogo mushrooms, fermented shrimp, that will be subject to up to 100 percent increase in import tariffs in 2011 to protect local industries.

 

CJ Raises Table Sugar Price 9.7% [Korean, OSY]

http://www.yonhapnews.co.kr/economy/2010/12/22/0318

Summary: Cj JeilJedang, the leading table sugar processor in Korea, announced that it will increase the ex-factory price of table sugar by an average of 9.7 percent on Dec. 24.  CJ explained that the price increase is due to the steep increase in international raw sugar price.  The price of raw sugar in international exchange market marked $0.3311 per pound on Nov. 9, a record high since 1980.  It is likely that other table sugar processors will follow CJ and increase the ex-factory price.

 

Sales of Blended Whiskeys Plunges [Korean, OSY]

http://www.hankyung.com/news/app/newsview.php?aid

Summary: Sales of blended whiskey brands, such as J&B and Cutty Sark, have declined 30 percent over the last five years in Korea mainly because of the strong rise of single malt whiskey.  Sales of Cutty Sark have declined down to 2,000 cases this year from 6,000 case level in 2008.  J&B has declined down to 79,000 cases this year from 115,000 cases in 2005.  On the other hand, the leading single malt Scotch whiskey brand Glenfiddich has increased it sales from 11,000 cases last year to 27,000 cases this year.

 

¡°Baby Boomers, Working Moms, Fashion-sensitive Male¡±, Three Leading Consumers of Department Stores This Year [Korean, OSY]

http://www.yonhapnews.co.kr/economy/2010/12/24/03

Summary: Lotte Department Store, the leading department store chain in Korea, reported on Dec 26 that an analysis of the annual sales data indicated that ¡°baby boomers, working moms, and fashion-sensitive male¡± were the three most outstanding consumer groups that accounted for a significant portion of the sales growth in department stores this year.  Purchases by baby boomers, those Koreans born between 1950 and 1963, rose 37 percent this year compared to year 2008, while purchases by people in 20¡¯s rose only 8 percent.  Purchases by working moms in 30¡¯s and 40¡¯s during the lunch hour (noon to 1:00 p.m.) and evening hour (from 6:00 p.m. till store close) rose 75 percent compared to year 2008.  Purchases by male group rose 34 percent while purchases by female group rose 28 percent compared to year 2008, reflecting the social trend of men paying more attention to means of self-expression such as fashion and cosmetics.  

 

Department Stores Kick Off Lunar New Year¡¯s Day Gift Set Reservations [Korean, OSY]

http://asiae.co.kr/news/view.htm?idxno=20101226

Summary: Leading department stores have started to offer customers reservations for Lunar new year¡¯s day gifts sets on Dec. 27.  The Lunar new year¡¯s day for year 2011 is Feb. 3.  Department stores have distributed gift set catalogs via mails and opened designated desks in the store to attract customers.  Lunar new year¡¯s day is one of the largest shopping season of the year in Korea.

 

7. North Korea Issues

 

 None
 
 

S. Korea Acquires 2,783 Tons of Tuna Fishing Quota for 2011, Slight Decline from 2010 [Korean, OSY]

http://www.yonhapnews.co.kr/economy/2010/12/01

Summary: Ministry of Ag., Fishery, Forestry and Food (MIAFFF) announced on Dec. 1 that Korea has acquired a total of 2,783 tons of tuna fishing quota for 2011 in a recent meeting of Atlantic Tuna Preservation Committee held in Paris.  Korea¡¯s tuna fishing quota for 2010 was 2,900 tons.  The number of tuna fishing vessels allowed for S. Korea will remain unchanged at 16.

 

Instant Noodle Industry Under Cost Pressure due to Surging International Price of Palm Oil and Wheat [Korean, OSY]

http://www.hankyung.com/news/app/newsview.php?aid

Summary: International prices of key ingredients, such as wheat and palm oil, have surged to a record high level.  Price of wheat in Chicago CME market marked $7.93 per bushel on Dec. 6, 14.84 percent higher than one week before.  Price of palm oil in Malaysia future¡¯s market marked 3,610 Ringgit per ton, up 13.1 percent from one month ahead.  Local instant noodle manufacturers have all reported significant decline in operation profit this year through the third quarter.  Nongshim reported 12.7 percent decline in operation profit, while Samyang reported 55 percent decline compared to the same period last year.

 

¡°Crabs from Alaska¡± Promotion in HomePlus [Korean, OSY]

http://www.hankyung.com/news/app/newsview.php?type

Summary: HomePlus, the second largest hypermarket store chain in Korea, has launched ¡°Crabs from Alaska¡± promotion.  The store will sell a total of 30,000 Dungeness crabs imported from Alaska, US.  Price of each crab is 12,800 won ($11.13).

 

 

Population of S. Korea 48 Million, National Census Survey [Korean, OSY]

http://www.hankyung.com/news/app/newsview.php?aid

Summary: The national census survey, which is administered every five year, found that there were a total of 48.2 million Koreans living in South Korea as of Nov. 1, 2010, up 2.0 percent from 2005.  The ratio of the people living in metropolitan areas rose to 81.5 percent (79.7 percent in 2005).  49 percent of the people were living in the Seoul – Kyunggi metropolitan area.  Average size of the families declined down to 2.67 people (2.88 people in 2005).  23 percent of the families were single member families, a significant increase from 20 percent five years ago. 

 

Supply of Jeju Tangerine Drops 30 Percent from Last Year [Korean, OSY]

http://www.hankyung.com/news/app/newsview.php?aid

Summary: According to Agro-Fishery Marketing Corporation (aT), price of Jeju tangerine in major wholesale markets rose to 29,400 won per 15 kg box on Dec. 28, up 53.9 percent from last year.  Supply of Jeju tangerine in the market has declined by 30 percent this year compared to last year due to the poor harvest.  Total harvest of tangerine in Jeju island so far this year has amounted to 239,000 tons, down 31.5 percent from last year.  Tangerine production in Jeju island has historically shown a two year tidal pattern, the year of poor harvest following the year of good harvest.

 

The information in this report was compiled by the Agricultural Trade Office (ATO) at the U.S. Embassy in Seoul, South Korea. The press summaries contained herein do NOT reflect USDA, the U.S. Embassy, or other U.S. government agency official policy or view point. U.S. food exporters can learn more about market opportunities in South Korea by reviewing ATO Seoul¡¯s Exporter Guide and other reports available at www.fas.usda.gov by clicking on ¡°attaché reports¡±.

 

 

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Agricultural Trade Office, U.S. Embassy - Seoul
Tel: 82-2-6951-6848 Fax: 82-2-720-7921
Email: atoseoul@state.gov