Since the beginning of the year, food prices have been rising. There has been a continuous overall increase in food items, including snacks, beverages, and bread. This is due to the rising prices of imported raw materials and the sustained high exchange rate of the won against the dollar.
According to the industry on the 9th, Dong-A Otsuka raised the prices of major products, including Pocari Sweat and Demisoda, by 100 won as of the 1st of last month. Daesang also raised prices of sauces, including mayonnaise, pepper, and dressings, by an average of 19.1% on the 16th of last month.
The franchise industry has also joined the price increase movement. Burger King announced on the 24th of last month, just before the Lunar New Year holiday, that it would raise the prices of some items, including its signature Whopper, by 100 won each. Starbucks Korea raised the prices of 22 types of tall-sized beverages by 200 to 300 won starting on the 24th of last month, and Hollis also increased the prices of some products by 200 to 300 won starting on the same day. Paul Bassett raised the prices of major products by 200 to 400 won from the 23rd of last month.
The march of price increases is continuing this month as well. Vips, a family restaurant operated by CJ Foodville, increased the salad bar price by 1,800 won based on adult usage fees on the 3rd. SPC Paris Baguette will raise the prices of 96 types of bread and 25 types of cakes by an average of 5.9% starting on the 10th. LOTTE Wellfood will increase the price of chocolate Pepero from the previous 1,800 won to 2,000 won beginning on the 17th, among an average increase of 9.5% across 26 types.
The low-cost coffee brand Compose Coffee will increase the prices of its iced Americano and decaffeinated iced Americano by 300 won each starting on the 13th, selling them for 1,800 won and 2,800 won, respectively. Binggrae plans to raise prices of some ice cream and coffee beverages, including Summer Hunting and Bungeoppang, by 200 to 300 won next month.
The widespread price increases in the food industry are due to cost burdens. According to the Korea Agro-Fisheries & Food Trade Corporation (aT), the price of Arabica beans hit a record high of $8,905 (12.88 million won) per ton on the 6th. Consequently, the price of Arabica coffee rose by 8% in just a week and by 27% compared to a month ago.
The price of cocoa, used as a chocolate ingredient, has not fallen below $10,000 since it broke a record high of $12,565 (18.19 million won) per ton on December 18 of last year. Additionally, the exchange rate of the won against the dollar has been fluctuating around 1,450 won, further increasing the cost burden on food companies.
The concerning issue is that price increases in the food industry may continue for the time being. The import prices of agricultural, livestock, and marine products at large discount stores have risen by 10 to 15%, leading to predictions that the prices on tables will rise when this inventory is released in May and June.
The government will hold an emergency meeting with the food industry this week to prepare countermeasures. Minister Song Mi-ryeong of the Ministry of Agriculture, Food and Rural Affairs is expected to meet with the food industry on the 11th to request restraint on price increases.