As plastic packaging prices surge due to tensions in the Middle East and a naphtha supply disruption, adding to the burden on the café industry, a roundtable was held on the 21st in Yeongdeungpo-gu, Seoul, among the Ministry of SMEs and Startups, the National Café Owners Cooperative, and the Korea Federation of Micro Enterprise (KFME). On site, desperate voices said they had reached the limit, while the government emphasized the possibility of supply-demand improvement, revealing a gap between the two sides.
On this day, Ko Jang-su, chair of the National Café Owners Cooperative, said, "The prices of sub-materials such as disposable cups, straws, and takeout containers have risen from 20% to as much as 50%," adding, "As it has become difficult to secure volume, more owners are making advance purchases for six months, or even up to a year, judging that 'buying now is the cheapest.'" With the naphtha supply disruption compounded by increases in coffee bean and logistics costs, it has reached the point where people say, "The more you sell, the more you lose."
Not only delivery containers but also labels attached to containers are facing unstable supply and demand, and some suppliers are reportedly limiting the purchase quantity per person.
The hardships of owners on the ground were more specific. A café owner in the eighth year of operation said, "What used to arrive the next day if ordered today now takes several days, and the quantities are fixed," adding, "With a lack of store space, we are stacking materials at home, in cars, and even at family members' homes."
The owner added, "When a customer asks for a few more straws, we should give them, but that is all an expense," and said, "We looked into alternatives such as paper cups, but those prices have also risen." There was also concern that the use of sub-materials will increase further ahead of the summer peak in demand for iced drinks.
Another café owner said, "As requests for small dessert packaging increase, the use of materials is rising in tandem," adding, "It's a situation where the tail wags the dog."
Lee Byeong-gweon, the Ministry of SMEs and Startups (MSS) second vice minister, said, "As a result of consultations with raw material companies, it will be somewhat difficult through May, but there was an explanation that the supply-demand situation will ease to some extent starting in June," adding, "We do not expect it to be prolonged." The official also said, "The government will do its utmost to smooth supply and demand," and "Please trust us and wait."
However, regarding the spread of advance purchases, the official said, "The very act of stockpiling in warehouses fuels price increases," adding, "In a national crisis, sharing economic hardship is the way to minimize everyone's pain." The point is that desperate survival efforts on the ground can act as a market-disrupting factor.
Industry representatives also proposed charging consumers an additional 100 to 200 won when packaging leftover food. Chair Ko said, "We also made a suggestion to the Ministry of Climate, Energy and Environment, and the response was positive." However, the Vice Minister, Lee, took a cautious stance, saying, "There are similar cases overseas, but in Korea we need to consider consumer perceptions."
On the ground, there were also concerns that while cafés are currently holding back on price hikes by absorbing the increase in expenses, if the situation drags on it could lead to higher beverage and delivery prices. Chair Ko emphasized, "Institutional support and stable supply-demand management are needed so that the café industry, the backbone of neighborhood commerce, does not collapse."
Meanwhile, the Ministry of SMEs and Startups (MSS) said it has reflected related support funding through a supplementary budget to support microbusiness owners facing management difficulties due to external variables such as the current instability in the Middle East. It allocated 170 billion won in microbusiness policy funds and 50 billion won in Korea Credit Guarantee Fund (KODIT) grants.
The Ministry of SMEs and Startups (MSS) said, "To increase added value by improving the products and services of microbusiness owners, we have also reflected 40 billion won for the lifestyle and culture innovation support project as a new program," adding, "This project is designed to support new menu development and service advancement."