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Food News Clipping

June 22, 2011

2011.06.23

FAS/Seoul Monitoring of Media Reporting on Agricultural Issues
Today's Date:  TWednesday June 22, 2011
For Coverage: June 21 - 22, 2011
 
 
1. BILATERAL/MULTILATERAL ISSUES

 

S. Korea, EU to hold talks in Oct. for review of FTA implementation [English, CSY]

http://english.yonhapnews.co.kr/business/2011/06/21/0502000000AEN20110621009100320.HTML

Summary: South Korea and the European Union (EU) will hold a minister-level meeting in October to review the implementation of their bilateral free trade accord set to take effect on July 1, Seoul's trade ministry said Tuesday.  The so-called Trade Committee will check and review whether the implementation of the free trade pact goes smooth, according to the ministry.

 

Tete-a-tete is set between Lee and DP leader Sohn [Korean & English, CSY]

First ¡®summit¡¯ between president and opposition leader in three years

http://joongangdaily.joins.com/article/view.asp?aid=2937902

Summary: President Lee Myung-bak and the leader of the largest opposition Democratic Party, Sohn Hak-kyu, will meet Monday to discuss key economic and political issues, including the politically sensitive call for university tuition cuts and the ratification of the Korea-U.S. free trade agreement.  Both the Blue House and the Democratic Party yesterday held press briefings to announce the breakfast meeting between the two leaders. It will also be the first summit between the president and the largest opposition leader in nearly three years. The last such meeting took place in September 2008 between Lee and then-DP Chairman Chung Sye-kyun.

 

Four other major issues will be discussed: the savings bank crisis, a plan to fight unemployment, a possible preparation for a supplementary budget and ways to reduce snowballing household debts, said Kim Hyo-jae, senior secretary to the president for political affairs.  The ratification of the Korea-U.S. free trade agreement was added to the agenda at the strong request of the Blue House, said Kim Dong-cheol, Sohn¡¯s chief of staff. ¡°We have delivered the concerns to the Blue House that Lee and Sohn will have a big difference on the matter,¡± he said, ¡°but still agreed to add it on the agenda.¡±

 

2. MARKETING ISSUES

 

Korea to add 14 imports to low-tariff list [English, CSY]

http://joongangdaily.joins.com/article/view.asp?aid=2937878

Summary: Korea will add 14 more items to the list of imports subject to lower tariffs next month in an effort to ease price hikes of raw materials that could drive up overall inflationary pressure, the Finance Ministry said yesterday.   Breeding pigs, silicon, manganese, sheepskin and raw materials are among those goods subject to lower or zero tariffs by the end of this year, according to the Ministry of Strategy and Finance.   The move comes along with a six-month extension of duty reductions on 35 out of 46 goods whose temporary tariff reductions will expire at the end of June, the ministry said. They include pork, garlic, mackerel, tires, coffee, wheat and sugar.   A total of 111 goods will be subject to the lowered tariff rates by the end of this year, the ministry noted.  The duty reduction is aimed at easing inflationary pressure fueled by rising costs of importing raw materials that could drive up production and consumer product costs.

 

3. OTHER MISCELLANEOUS ISSUES

 

Lee calls for farmers to study ways to add values to products [English, CSY]

http://english.yonhapnews.co.kr/business/2011/06/21/0501000000AEN20110621009800315.HTML

Summary: President Lee Myung-bak said Tuesday that farmers should break away from old-style agriculture and study ways to produce top-quality products and add value to them through additional processing.  "Today's farming shouldn't be done in the way it was done 10, 20 or 30 years ago," Lee said during a lunch meeting with chiefs of regional agricultural technical centers. "As our income has risen, agricultural products should be better in quality and taste."   Lee also said farmers should no longer take agriculture just as primary industry and seek ways to process their products on their own to add value to them. Then agriculture can be a "secondary, tertiary and quaternary industry," he said.

 

 

FTC discovers gochujang price-fixing[English, KJH]

CJ Cheiljedang and Daesang Corporation, the nation¡¯s leading gochujang, or red pepper paste, manufacturers, were found to be colluding on pricing, according to the Fair Trade Commission, yesterday.  The companies agreed to limit discounts offered to large discount stores to 30 percent, the commission said. 

 

The FTC fined CJ 434 million won ($399,411) and Daesang 618 million won, and collusion charges were filed against two company executives who were involved in the collusion.

The FTC said the companies had been involved in a price war over flour-based gochujang at a time when they were releasing a rice-based gochujang, and offering 60 percent discounts to large stores. Several officials met at a hotel in Seoul in March 2010 and agreed to limit the discounts to 30 percent. They agreed that Daesang would limit its discounts from May 2010 and CJ from June.
The agreement ended in October when Daesang started offering larger discounts.
¡°The interesting thing is that executives from both companies, who were known to have been in a hugely competitive situation in the food manufacturing industry, took part in the collusion,¡± an FTC official said.

The FTC said that gochujang is one of the most widely used ingredients in Korean cooking and it will keep a close watch on prices of such basic products.
There are about 160 gochujang manufacturers in Korea including the two conglomerates, about 30 small and midsize enterprises, and about 130 small manufacturers.
In terms of sales last year, CJ, known for its Haechandle brand, has a 42.8 percent market share with 118.3 billion won in sales, and Daesang, famous for its Sunchang brand, has a 36.9 percent share with 102.1 billion won in sales.

CJ Cheiljedang gets back to its roots - sugar[English, KJH]

http://joongangdaily.joins.com/article/view.asp?aid=2937631

As a mature market saddled with slow growth and lurching international commodities prices, Korea¡¯s sugar industry has had little to be excited about. But CJ Cheiljedang wants to change that.

Yesterday, the nation¡¯s largest food company and top sugar producer introduced its new ¡°xylose sugar¡± product at a press conference at the company¡¯s headquarters in Ssangnim-dong, central Seoul.

Xylose is a natural sugar found in plants that the company is pitching as a healthy substitute for white sugar.
¡°We will change the trend of decreased sugar consumption through our xylose sugar,¡± said Lee Jae-ho, vice president in charge of materials at CJ Cheiljedang.

The new product, which will hit shelves on June 20, contains 89 percent processed sugar.
But xylose, known as the active ingredient for cavity-preventing xylitol, prevents the breakdown of sugar in the body and cuts sugar absorption by 35 to 50 percent, according to the firm.
 
The company will also release a sweetener called tagatose in the latter half of the year, which the firm touts as a sugar substitute that is 92 percent as sweet as processed sugar, but is better for diabetics because it cuts blood sugar down to 5 percent of refined sugar consumption and has just one-third the calories.

¡°CJ Cheiljedang will strive to reach 1 trillion won ($923 million) in revenue from value-added sweeteners by 2015 through development and introduction of new products such as xylose and tagatose,¡± said Lee.

After four years of research, the firm devised a way to extract xylose from coconut shells instead of corn cobs.
 Last month, it completed construction of the world¡¯s second-largest xylose plant with 15,000 tons of annual production in the Philippines.  
With this, CJ Cheiljedang is returning to its roots as a sugarmaker. It was called Cheil Jedang when it was established by Samsung Group founder Lee Byung-chull, before it was spun off on its own in 1993 and renamed CJ Group.

CJ Cheiljedang, the original flagship firm of CJ Group, built its fortune on processed sugar.
Now the group is engaged in a range of businesses, but CJ Cheiljedang still dominates the local sugar scene with 76 percent of the market in home-use sugar as of the first quarter of this year.
But the firm saw heavy losses last year when high international prices of raw sugar raised production costs.

¡°Value-added materials such as xylose sweeteners are the next frontier for food firms,¡± said Woo Won-sung, an analyst specializing in food and beverages industries at Kiwoom Securities.



 

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