Today's Date:      Tuesday, April 17, 2012

1. BILATERAL/MULTILATERAL ISSUES

One Month After Implementation of KORUS FTA … Except for Fruits & Wine, Retail Price of Imported American Products Shows No Decline [Korean, OSY]

http://news.donga.com/Economy/Market/3/0108/20120415/45546322/1

Summary: One month has passed since the implementation of KORUS FTA on March 15.  However, retail prices of imported American products in the market have shown little decline despite the reduction in import duties mainly because the distributors are stilling selling old inventories imported before March 15.  Only exceptions were fruits and wine.  For example, one fresh orange imported from the U.S. were selling at 980 in Lotte mart, down 27.4 percent compared to the pre-FTA price according to a price survey.  Carlo Rossi California wine was selling at 7,900 won a bottle, down 10.2 percent.

<4/16/2012>Consumers Start to Feel Impact of Korea-U.S. FTA [English, CSY]

http://english.chosun.com/site/data/html_dir/2012/04/16/2012041601004.html

Full text: The impact of the recently implemented Korea-U.S. free trade agreement is starting to be felt here, with prices of some imported products dropping courtesy of reduced or removed tariffs.  According to a survey by the Korea International Trade Association on Sunday of over 200 importers, some 75.9 percent said they have lowered their prices or plan to do so.  The association said that prices of U.S. imports have dropped 7 percent and 6.3 percent on average in the wholesale and retail markets, respectively, since the trade pact took effect on March 15.

Prices of wines and beers dropped 13 percent, followed by fruits and nuts (9.6 percent), meats and fisheries (7.7 percent), and juices and beverages (7 percent). This saw fruits such as oranges, lemons, and grapefruit become about W500 to W600 cheaper. In contrast, vitamin and health supplements saw a mere 2.7 percent fall in retail prices.  While consumers will have to wait another one or two weeks to enjoy the tariff cuts on a wider range of wines, many importers have already reduced prices of some products by 10 to 15 percent.  The association expects the impact of the FTA will be more strongly felt at the end of this month as more items with lowered tariffs hit the market.

Korea, China Likely to Start Official FTR Negotiation in May [Korean, OSY]

http://news.donga.com/Inter/New/3/02/20120416/45572345/1

Summary: Korean government has decided on April 16 that it will start an official talks with China on bilateral free trade agreement.  Jaewan Park, the head of the Korean Ministry of Planning & Finance, commented that the Korea-China FTA will be a tool for Korean companies to develop new business in China.  Commencing date of the official FTA talk is likely to surface in a government meeting in Beijing later this month.

2. MARKETING ISSUES

Diagio Korea Strengthens Premium Beer Business … Launches Smithwick’s Ale [Korean, OSY]

http://www.hankyung.com/news/app/newsview.php?aid=2012041550261&ltype=1&nid=000&sid=0001&page=1

Summary: Diagio Korea launched Smithwick’s in the Korean market on April 16.  Smithwick’s is a premium ale from Ireland.  In a press interview, Kim Jong Woo, the Korean branch president of the multi-national liquor supplier commented that Diagio is focusing on the premium imported beer market in Korea and will continue to launch additional products.  Diagio is currently selling Guinness beer in Korea.

Lotte Enters Contract Feeding Restaurant Business [Korean, OSY]

http://economy.donga.com/CEO/3/0104/20120417/45572491/3

Summary: Lotte, a leading food company in Korea, announced on April 16 that it had started a contract feeding restaurant business.  Industry analysts forecast that Lotte would gain 100 billion won of sales easily out of the existing demand from the companies under the umbrella of Lotte.

Gov’t to Allow Large-scale Corporations to Enter Aquaculture Business [Korean, OSY]

http://www.hankyung.com/news/app/newsview.php?aid=2012041674251&sid=01012014&nid=002&ltype=1

Summary: Ministry of Agriculture & Fishery released a draft revision to the ‘Fishery Industry Management Rules’ on April 16.  The core agenda of the revision proposal is to allow large corporations to enter the aquaculture business.  In addition, the draft proposes that current ceiling in the size of aquaculture farm, 60 ha, be abolished.  The Ministry commented that the revision should help local fishery industry find new momentum for growth.

3. OTHER MISCELLANEOUS ISSUES

Nonghyup Injects $3.81 Bn Into Agro-products Business Operations This Year[English, MGF]

http://news.mk.co.kr/newsRead.php?year=2012&no=232452

Summary: Nonghyup will earmark 4.34 trillion won in financial support for agricultural operations of member cooperatives as part of the federation-wide restructuring effort, the federation disclosed Monday. This is a 380 billion won increase from last year's allocation. More specifically, 2.04 trillion won will be allotted to stimulate distribution of farm produce to bolster Nonghyup sales, 1.3 trillion won will be spent on aiding rice purchases by regional cooperatives during the harvest period, and 1.0 trillion won will be set aside to ease the capital burden of farmers by offering financial support for purchases of farming equipments.