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.

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 80^th 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 80^th 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.