FAS/Seoul Monitoring of Media Reporting on Agricultural Issues 

Today's Date: Friday,  October 6,  2023

For Coverage:  September  22 ~  October 4, 2023

Domestic Beer Prices are Increasing... OB Beer's Cass and Hanmac Increase 6.9%
https://n.news.naver.com/mnews/article/469/0000763416?sid=103
Summary:  OB Beer, a prominent beer company known for its Korean domestic brands such as Cass and Hanmac, has announced its first price increase in 19 months.  They plan to raise prices by an average of 6.9 percent.  However, they intend to maintain the prices of canned products typically consumed at home in order to ease the financial burden on consumers.  The decision to raise prices is attributed to several factors, including fluctuating currency rates, which have made it challenging to import beer ingredients.  Additionally, the rising international oil prices have led to increased supply chain costs for OB Beer.  OB Beer emphasized that they made every effort to keep prices stable during the COVID-19 pandemic when consumer pressures were high.  However, they had to increase prices 19 months ago, and despite their continued efforts, they find it necessary to adjust prices today due to various global factors.  There is also anticipation that other domestic beer companies may follow suit with price increases.  HiteJinro, another major player in the industry, mentioned that they currently have no plans to raise beer prices.  Nevertheless, it's worth noting that they also increased prices 19 months ago, coinciding with OB Beer's last price hike.

Seoul Food Prices, 34% Higher than Tokyo 

https://n.news.naver.com/mnews/article/021/0002597178?sid=101

Summary:  Following the extended Chuseok holiday week, which is the Korean Thanksgiving Day, there are growing concerns about a potential increase in consumer prices.  Notably, consumer prices in groceries, dining out, and clothing in Korea are now higher than those in Japan, even though Japan's economy is roughly twice the size of Korea's.  This shift has made Korea the country with the highest daily life expenditure in Asia due to the continuous rise in prices.  This is prompting calls for action by many people.  A research study by Numbeo compared actual consumer prices between Seoul (Korea) and Tokyo (Japan) and found that items like bread, beef, eggs, and lettuce were twice as expensive in Seoul compared to Tokyo.  Additionally, rice was 21 percent more costly in Seoul than in Tokyo.  Moreover, when it came to food services, including diverse styles such as full-service restaurants and McDonald's, Tokyo was found to be average 21 percent cheaper than Korea.  Starting from this month, it is expected that the prices of dairy products and other food items will increase in Korea.  OB Beer has already announced a price hike, and it appears that other food products may follow suit in price increase.

Starbucks Korea Large Size 'Trenta' Becomes an Official Menu Size Since Its Sales Volume is 1.5 Million Cups
https://n.news.naver.com/mnews/article/469/0000763271?sid=103
Summary:  Starbucks Korea introduced the Trenta, a larger 887 ml size cup, originally as a seasonal offering for the summer.  However, Starbucks Korea has now announced that the Trenta size will be available year-round.  It's worth noting that there are only three beverage options available in the Trenta size: Cold Brew, Iced Grapefruit Honey Black Tea, and Strawberry Lemonade.  This size is 1.5 times larger than the Venti size.  Initially, the Trenta size was set to be available until September.  However, it garnered significant attention and sales, with over 1.5 million beverages sold in Trenta size just in two months.  Due to this increasing interest, Starbucks Korea has decided to continue offering the Trenta size to customers.  It appears that consumers in Korea are leaning toward larger-sized beverages, as sales for Grande and Venti sizes are on the rise compared to Short or Tall sizes.  Starbucks Korea sees Trenta as a new experience that caters to customer preferences and states that it plans to extend the availability of Trenta size due to its popularity among consumers.

"Milk Prices Go Up From Today"… Bread, Ice Cream, etc. Prices are Anticipated to Rise
https://n.news.naver.com/mnews/article/277/0005321090?sid=103
Summary:  Starting from October, both the retail market and convenience stores are planning to raise the prices of milk products.  This decision stems from the Korea Dairy Committee's choice to increase the cost of raw (unprocessed) milk.  In response to this, several major milk companies are adjusting their prices.  Seoul Milk, for example, is raising its prices by 3 percent in large retail stores, while Maeil Milk has increased its milk prices by 4 to 6 percent.  An associate of Maeil Milk has noted that not only has the cost of raw milk has gone up, but there have also been increases in supply chain costs, packaging expenses, and other ingredient costs.  Despite consumer concerns, Maeil Milk is making efforts to minimize the impact of these price hikes.  Moreover, Namyang Milk is also increasing its white milk prices by 4.6 percent and an average of 7 percent for other dairy products, following a similar pattern to Dongwon F&B.  The increase in the price of raw milk is having a significant impact on the overall pricing of milk and dairy products in the industry.  According to the Korea Dairy Committee, the price of raw milk has risen by 8.8 percent for drinking milk and 10.9 percent for processed milk.  As milk prices continue to rise, it is expected that products using milk, such as bread, ice cream, and coffee, will also see price hikes, potentially leading to a phenomenon known as "Milkflation" (Milk + Inflation).  This projection is based on the industry's response to a 10 percent increase in raw milk prices in 2022, which resulted in a 6 percent increase in bread prices and a 10 percent increase in ice cream prices.

Spam, a Canned Ham Product, Well-Known Gift for Holidays

 https://n.news.naver.com/mnews/article/145/0000019617?sid=103
Summary:  Spam, a canned ham product, originated in the United States.  However, it is more popular among Koreans.  It has long been a traditional gift during the Korean holiday including Chuseok.  According to CJ Cheiljedang, the supplier of Spam in Korea, since its initial production in the country in 1987, it has consistently achieved sales of 19 trillion KRW collectively.  It is expected to reach 21 trillion won by the end of this year.  Spam is a versatile product used in various Korean dishes such as kimchi soup, kimbap, and it's a convenient food option for people living alone.  Originally created by Jay Homel, a butcher who recognized the need for processed meat during WWI, Spam was invented in 1926 and introduced to Korea during and after WWII.  Over the past three decades, it has held the top position as the most popular canned ham in Korea.  CJ Cheiljedang is actively working to diversify Spam's flavors to appeal to the tastes of the younger generation.  This includes offering spicy, cheesy, and low-calorie options, and they even created a product specifically tailored to complement kimbap, a popular Korean dish.

The Price of Rice, Which Had Plummeted, Exceeded 200,000 KRW in 18 Months… It is Projected to Maintain
https://n.news.naver.com/mnews/article/421/0007067160?sid=102
Summary:  The price of Korean rice experienced a significant decline last year, reaching its lowest point in 18 years.  However, it has rebounded to 200,000 KRW per 80 kg, marking a 28.5 percent increase from the previous year and reaching a price of 50,000 KRW per 20 kg.  This increase has affected both wholesale and retail prices, with wholesale prices rising by 13.8 percent and retail prices increasing 13.5 percent compared to the same period last September.  This trend is expected to persist due to a decrease in rice cultivation area, which has reached its lowest level ever.  This year's rice cultivation area is 2.6 percent smaller than the previous year, amounting to 708,041 hectares.  This decrease is estimated to result in a reduction of approximately 100,000 tons when considering that 10 acres account for 518 kg of rice.  Rice consumption in the past years decreased by 15.7 percent compared to 2013, as the Korean diet has been shifting towards greater meat consumption, leading to a decline in rice consumption.  However, it is projected that this year's rice consumption will not decrease significantly.  The rising cost of dining out has led to an increase in the consumption of HMR (home meal replacement) Korean food, which, in turn, has boosted rice consumption, as rice is a staple.  Therefore, it is anticipated that rice prices will remain stable, although the production of rice may be affected by upcoming rain during the harvest season.

"990 KRW Americano” The Strategy Worked… Two Million Coffees Sold in Two Weeks https://n.news.naver.com/mnews/article/003/0012106355?sid=101
Summary:  During a period of high consumer prices, Paris Baguette introduced a promotion offering discounted Americano coffee.  This initiative proved highly successful, resulting in the sale of 2 million cups of coffee within just two weeks.  Given the economic challenges in Korea and consumers' reluctance to spend, this pricing strategy was successful.  For Paris Baguette, this promotion generated twice the usual sales volume and concluded earlier than anticipated due to the surge in demand.  Experiencing a big success, the company is considering similar events to help ease the financial burden on consumers when it comes to dining expenses.

Seafood Inspection Strengthen in Everywhere Including Department Stores, Restaurants, and Schools
https://n.news.naver.com/mnews/article/020/0003522126?sid=102
Summary:  The Korean government is taking measures to assess the radiation levels in seafood, regardless of its origin.  This initiative starts in the Seoul district and aims to alleviate consumer concerns stemming from worries about radiation contamination from Fukushima's radioactive water.  The government's goal is to demonstrate and ensure the safety of seafood.  The results of every analysis will be made public on a website six days after the assessment.  In addition, Seoul is actively working to reduce consumer anxiety by implementing a program where they promptly check the radiation levels of seafood upon consumer request.  Seoul city takes the food within 24 hours and complete the test for the citizens.  Following this trend, schools located in Seoul have heightened their scrutiny of food ingredients.  They have introduced a four-step evaluation process to encourage students to consume safe foods.  Moreover, they have partnered with suppliers to allow schools and parents to monitor the food being provided to students. These efforts are expected to continue for some time.