FAS/Seoul Monitoring of Media Reporting on Agricultural Issues 

Today's Date: Friday, August  30,  2024

For Coverage:  August  17 ~ 30, 2024

Korean Government Bets on New Alcoholic Drinks to Counter Dropping Rice Needs
https://www.koreatimes.co.kr/www/tech/2024/08/129_381450.html
Summary:  Minister of Agriculture, Food and Rural Affairs Song, Mi Ryeong said in a press conference that the Korean government will encourage private brewers and distillers to develop new beverages using domestic rice to boost rice consumption, which has been declining for years.  Citing rice-based alcoholic beverages as one of the most effective ways to boost rice demand, Minister Song pointed to the ongoing trend of younger people increasingly drinking makgeolli (unrefined rice wine) and other traditional rice-based alcoholic beverages.  Referencing Japanese rice wines including sake, the minister mentioned their diversity across different regions as a model for the ministry’s initiative.  The minister also mentioned the recently revised Liquor Tax Act in which variations of rice-based alcoholic beverages fall under the country’s takju category, which includes traditional cloudy alcoholic beverages like makgeolli, and are entitled for a greater tax deduction benefit than non-takju drinks.  The country has been experiencing reduced market demand for domestic rice, largely because of changes in dietary habits that have moved away from rice.  Given that Korea’s rice stockpile amounted to 95,000 tons by the end of last year and this year’s rice yield is expected to be 3.7 million tons, the minister emphasized that it would be beneficial for local farms to scale back production and focus on growing higher-quality rice while the country seeks ways to increase and accelerate rice consumption to avoid excess stock.

Korea Government to Provide Record Amount of Foodstuffs and Discount for Chuseok Holiday
https://www.koreatimes.co.kr/www/biz/2024/08/488_381366.html
Summary:  The government plans to supply a record amount of 170,000 tons of high-demand foodstuffs and provide a discount worth 70 billion won ($52.6 million) for the upcoming Chuseok holiday.  Key holiday-related foodstuffs the government supply include cabbages, apples and pears.  Besides, demand for vegetables, eggs and other foodstuffs usually rises in Korea ahead of the holiday as people prepare holiday meals for family gatherings.  The government will extend the tariff-rate quota scheme for 10 kinds of imported fruits, such as bananas, mangos and pineapples, by the end of the year to lower tariffs and stabilize their prices.  A record amount of 70 billion won will be earmarked to support a discount of major agricultural and fisheries products for Chuseok.  The finance ministry said that prices have largely been stabilized and the economy is on a recovery track led by exports, but prices of farm produce and other Chuseok items are high due to the recent heat wave, and domestic demand remains weak.  For these reasons, it added that policy priority will be on stabilizing prices and improving the economic situation for the people.

Rising Costs of Food Ingredients, Processed Foods, and Dining Burden Consumers
https://www.fnnews.com/news/202408251830490358 
Summary:  With soaring prices for food ingredients due to recent abnormal weather, both processed food products and dining costs are rising.  As Chuseok (Korean Thanksgiving holiday) approaches, consumers are on high alert.  Due to the increasing cost of food ingredients, many are turning to alternatives like Home Meal Replacements (HMR) for their Chuseok foods.  SSG.com, an e-commerce platform, reported a 163% increase in sales of HMR Jeon (Korean pancakes) products during the New Year's holiday this year compared to the same period last year.  Currently, HMR Jeon products are priced at around 8,000 KRW, which is similar to the price of a pack of 30 eggs (6,990 KRW).  However, it’s likely that prices for processed products, including HMRs, will increase further.  An industry insider commented that the food industry has been trying their best to meet the government’s efforts in stabilizing overall food prices for years.  However, it’s no longer possible to maintain price levels as before.  The dining industry is experiencing price increases as well.  Along with the increased food ingredient prices, increased platform fees and labor costs drive the rising dining costs.

Korean Coffee Franchises Accelerate Global Expansion
https://www.koreatimes.co.kr/www/tech/2024/08/419_380968.html
Summary:  Korean coffee franchise companies are accelerating their global expansion as the domestic market becomes increasingly saturated.  Hollys F&B opened its first overseas store in Japan in May.  Ediya Coffee is also expanding its presence in overseas markets, especially in the United States and Malaysia.  Paik’s Coffee and Mega MGC Coffee currently operate their shops in Philippines and Singapore, and Ulaanbaatar, respectively.  The coffee shop market in Korea has been steadily growing for years, surpassing 100,000 shops in total by the end of 2022, more than doubling the number from 2016.  An industry official said that coffee and desserts are generally easier to market to local consumers worldwide due to their simpler recipes and limited varieties, compared to other foods.

Agricultural and Fishery Exports Amounted to $7.37 Billion as of July This Year
http://www.foodnews.co.kr/news/articleView.html?idxno=109494
Summary:  As of July this year, Korea’s exports of agricultural and fishery products reached $7.37 billion, a 7.1% increase from the same period last year.  According to the Korea Agro-Fisheries and Food Tade Corporation, by product, rice processed foods, dried laver, and ramen led the rise with high growth rates.  Rice processed food exports amounted to $170 million, increased by 45.6% compared to the same period last year, with the popularity of frozen gimbap and tteokbokki.  Dried laver exports to the U.S., Japan, and Thailand grew significantly, reaching $640 million, up 34.8% from the same period last year, while ramen exports increased 34% to $690 million due to the spicy ramen craze and increasing entry to large-scale distribution stores.  By country, the United States led the export increase with $1.17 billion, up 21% from the same period last year by expanding the K-food sales network such as opening a Korean food hall on Amazon and bringing Korean food to HEB, a large-scale distributor in the southern United States.  Exports to the EU, by the end of July, increased 31% to $540 million from the same period last year, as a result of introducing various K-foods to Europeans, such as operating a K-food promotion center at the Paris Olympics and hosting a Lyon K-food fair.

Soju’s Global Sales Soar As Domestic Consumption Declines
https://www.koreatimes.co.kr/www/tech/2024/08/419_380822.html
Summary:  According to the Korea Customs Service (KCS), overseas sales of soju, a popular Korean distilled alcoholic beverage, are on the rise, even as its popularity decreases domestically.  The global popularity of Korean online streaming series and movies is considered as a key factor in drawing consumers’ attention to soju, while, in Korea, rising market prices and shifting trends away from soju are believed to be contributing to its declining consumption.  Soju exports last year exceeded $114 million, and for the first half of this year it recorded 66.7 billion won ($48.3 million), a 4.7% increase from the same period last year.  The growing exports derive from robust corporate performances.  The oversea soju sales of HiteJinro grew to 189 billion won last year, more than tripling from 57.1 billion won in 2017.  Lotte Chilsung’s subsidiary in the Philippines, Pepsi-Cola Products Philippines (PCPPI), showed that its earnings from liquor products jumped by 35.8% in the first half of this year.  According to market experts, these performances have benefited from their widening presence in the global market with less reliance on the domestic market.  In addition, the companies have begun investing overseas for their soju brands, such as HiteJinro’s first manufacturing plant in Vietnam and Lotte Chilsung’s partnership with California-based E&J Gallo Winery.