1. More US Beef than Local Beef Consumed at Blue House
2. Milk exports Soar due to Scandal
3. Traditional Liquor Industry to Benefit from Relaxed Regulations
4. KFDA Designated as Good Regulatory Reform Agency
5. Korea, India Agree to Eliminate or Cut Tariffs Over Next 10 Years
6. KCS Increased Fine for Violation of COOL
7. Locally Grown Ingredients Market Heats Up
8. The ROKG will Provide 30% Discount to Rice Processors
9. Aussie beef outstrips U.S.
10. Food Price Hikes Weigh on Consumers
11. Korea Turns to GCC for Next FTA
12. Logistics Service Industry Shows 20% Growth in the First Quarter
13. FTC: Beverage Firms Fixed Prices
14. Sales of Rice Wilting as Families Turn to Toast
15. Government Launches Food Safety Information Website
16. Maeil Dairy Co. Launches Voluntary Food Safety Standard
17. KFDA Test Found Most Juices to be ‘High Calorie Low Nutrition Food’
18. Korea Postpones Full Implementation of Meat Traceability System
19. Sluggish Economy Likes it Hot
20. Korea Imports 2.3 Times More Wine than Scotch
21. Thanksgiving Gift Sets Prices Up 5 – 15 Percent
1. More U.S. Beef than Local Beef Consumed at Blue House: In the first half of the year, more U.S. beef (1,156kg) was consumed at the Blue House than local beef (311kg). Australian beef (1,614kg) topped both the US and local beef. The Blue House said that it purchased beef based upon price and availability. That said, despite three times higher prices of local beef compared to imported beef, Korean housewives are demanding Hanwoo due to lingering food safety concerns. The market share of domestic beef accounted for 50% in June, the highest level in nine years. MIFAFF attributes the growth in local beef demand to the COOL and new traceability system. MIFAFF is targeting a 60% market share for local beef and will tighten the surveillance program for COOL in restaurants.
2. Milk exports Soar due to Scandal: Thanks to buying by China, Korea’s milk exports rose by a factor of 17 in the first half of the year. Growing food safety awareness in China in the wake of a melamine-tainted milk powder scandal played a crucial role. According to a release by the Korea Agro-Fisheries Trade Corporation, local dairy farmers exported 744 tons of raw milk worth $926,000 in the January-June period, up from just 20 tons worth $55,000 in the same period a year earlier.
3. Traditional Liquor Industry to Benefit from Relaxed Regulations: Various Korean government ministries are developing a package of policy measures intended to help the expansion of small-scale producers of traditional liquors. The ‘traditional liquor development law’ will remove or mitigate existing regulations that restrict the growth of the traditional liquor industry. Expected changes include deregulation on processing facility requirements, allowing sales through internet shopping malls and establishment of traditional liquor research institute for technical support.
4. KFDA Designated as Good Regulatory Reform Agency: KFDA has been designated by the Prime Minister’s Office as a good regulatory reform agency. In 2008, KFDA eliminated 85 excessive regulations. This year, KFDA is working to eliminate another 70 excessive requirements.
5. Korea , India Agree to Eliminate or Cut Tariffs Over Next 10 yrs: Korea and India agreed to eliminate or cut tariffs on goods over the next 10 years and will open their service and investment sectors to boost economic cooperation, Seoul's trade ministry reported. Wrapping up three years of negotiations, the two countries will sign a so-called Comprehensive Economic Partnership Agreement (CEPA), committing to drastically lower import tariffs on cars and other manufactured goods. But both sides agreed to exclude fisheries and some agricultural products -- including dairy, beef and pork -- from tariff concessions.
6. KCS Increased Fine for Violation of COOL: KCS announced that it would increase the surveillance program for violation of country of origin labeling in both wholesale and retail marketing channels. For violation, it will impose fines up to 300 million won and order a recall of mislabeled products. Meanwhile, MIFAFF announced that the names of companies and restaurants which violate the country of origin labeling law will be posted on its website or on provincial government websites.
7. Locally Grown Ingredients Market Heats Up: Leading food companies are putting additional efforts to launch new products made from locally grown ingredients such as rice and wheat as the demand is on a rapid increase. Products that have reported successful sales so far include noodles, bread, cookies, ice cream and tea. Although prices of these “local ingredient” products are higher than products made of imported ingredients, consumers are willing to pay the premium as they are concerned about the safety of imported ingredients, says an industry analyst.
8. The ROKG will Provide 30% Discount to Rice Processors: The MIFAFF will provide government rice (2005 crop) for processing at a 30 % discount in order to increase use in rice products including “rice ramen, rice biscuit, etc.” President Lee Myung-bak called for measures to reduce the country's rice stockpile, saying falling demand for rice could cut into farmers' income and destabilize the farming industry. “The government spends more than 600 billion won a year on keeping surplus rice. We can reduce the stockpile by providing rice at cheaper prices to firms and encouraging them to develop more food products made from rice,'' Lee said during a meeting with economic policymakers.
9. Aussie beef outstrips U.S: It might taste good, but American beef is losing out in the meat wars to the Land Down Under. Imports of Australian beef far outstrip its U.S. counterpart in terms of quantity. In the first six months of the year, Korea imported 60,289 tons of beef from Australia, compared to 23,970 tons from the United States, according to the Korea Customs Service.
10. Food Price Hikes Weigh on Consumers: Steep rises in the price of food and daily necessities are weighing on Korean consumers, who are already feeling the pinch from higher utility bills and transportation fares. Concerns about higher food prices have grown in earnest after CJ CheilJedang announced that it would raise its sugar products prices by an average of 8.9 percent due to hikes in international raw sugar prices. The elevated price of sugar is expected to push up prices of processed foods including bread, ham, milk, soft drinks and cookies, observers said.
11. Korea Turns to GCC for Next FTA: The Ministry of Foreign Affairs and Trade stated that it was looking into the possibility of beginning negotiations with the Gulf Cooperation Council (GCC) for establishing an FTA. If this plan is realized, it will be beneficial to Korea as most of the GCC member nations do not have a well developed manufacturing industry.
12. Logistics Service Industry Shows 20 Percent Growth in the First Quarter: Backed by the rapid growth of home shopping business in Korea through internet and TV home shopping, the business of leading logistics service companies have shown a sharp growth in the first quarter. Daehandtongwoon, CJ GLS, Hanjin and Hyundai, the four leading players in the industry, together delivered a total of 88 million boxes of product in the first quarter, up 18 percent from last year. The total cash register sales of the local logistics service industry is expected to reach 3 trillion won this year.
13. FTC: Beverage Firms Fixed Prices: The Fair Trade Commission reported that five beverage manufacturers colluded to raise the cost of various drinks in a price-fixing scheme. The agency slapped a total of 25.5 billion won ($20.6 million) in fines on Lotte Chilsung Beverage, Haitai Beverage and Woongjin Foods. Lotte got hit with the biggest penalty - 21.7 billion won - while Haitai and Woongjin must pay 2.3 billion won and 1.4 billion won, respectively. Coca-Cola and Donga-Otsuka, however, do not have to pay fines since they voluntarily informed the free trade agency of their participation in the price-fixing scheme. The commission also said it plans to seek criminal charges against the chief executives of Lotte Chilsung and Haitai Beverage.
14. Sales of Rice Wilting as Families Turn to Toast: The growth rate in rice sales at E-Mart, the nation’s largest discount store, fell 1.1 percent in the second quarter of this year compared with the same period last year. “Rice or rice products have long been the best-selling items at large discount stores,” said an official from E-Mart. “Recently, however, rice consumption has dropped, sometimes even lagging behind sales of coffee mixes,” the official continued.
16. Maeil Dairy Co. Launches Voluntary Food Safety Standard: To better address consumers’ elevated food safety concerns, Maeil Dairy Co, a leading food company in Korea, has recently launched ‘Fresh News Campaign’, a code of voluntary food safety standards that is much stricter than existing Korean government regulations. ‘Fresh News Campaign’ mandates all products made by Maeil Dairy Co. to be (1) free of coloring agents in dairy milk (2) 100% origin labeling for imported ingredients (3) free of artificial flavoring agents (4) testing on the designated 105 food safety risks, including GMO and microorganism contamination, in both ingredients and final products.
17. KFDA Test Found Most Juices to be ‘High Calorie Low Nutrition Food’: According to a KFDA internal report disclosed to congressman Young-Gil Song (Woori Party), 31 out of 32 juice beverages tested by KFDA fell under the ‘high calorie low nutrition food’ category which would be banned from sales in the school zone beginning January 2010. The number of banned products will increase as more products are tested by KFDA. However, Congressman Song pointed out that the KFDA standard for ‘high calorie fat food’ is not clearly defined and thus could be misleading.
18. Korea Postpones Full Implementation of Meat Traceability System: MIFAFF announced that it was not going to penalize businesses that violate the meat traceability regulation but continue to provide guidance on how to fulfill the requirement until October 5, 2009. After this date, businesses that violate the relevant regulation will be subject to strict penalties.
19. Sluggish Economy Likes it Hot: Restaurants and food processors continue to launch products with hot, spicy flavors reflecting strong consumer demand. Market analysts agree that consumers are looking for something that can stimulate their senses under the on-going sluggish economy. Good examples of the trend include “Angry Woffer” by Burger King, “Red Pepper Republic” spicy food restaurant by Sun@Food Co., and “Spicy Shrimp Fajita Pizza” by Papa Jones Pizza.
20. Korea Imports 2 Times More Wine Than Scotch: Korea imported 2.3 times more wine than scotch in the first seven months of 2009. Until 2005, scotch imports were greater than wine, but as wine became more popular, wine imports have exceeded scotch. Korea imported 12,547 MT of wine in the first seven months of 2009.
21. Thanksgiving Gift Set Prices Up 5 – 15 Percent: According to major department and hypermarket stores, prices of gift sets developed for the coming Chuseok holiday season are in general 5 to 15 percent higher than last year. In particular, gift sets of local Hanwoo beef will show the largest price increases from last year due to growing demand for locally produced foods. On the other hand, gift sets of local fruits will be 10 to 20 percent cheaper this year because of increased production.
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