The price of bread has been on the rise for six months. As the increase in bread prices reaches three times the overall consumer price inflation rate, a recent sale of '990 won bread' by the famous YouTuber 'Schuka World' is intensifying the debate over reasonable pricing.
According to the Korean Statistical Information Service on the 3rd, the bread price index in August was 138.61 (2020=100), marking a 6.5% increase from the same month last year. This is more than three times the overall consumer price inflation rate (1.7%) for the same period.
The significant rise in bread prices is the first since July 2023 (8.6%) and has been ongoing for two years and one month. Since March of this year, bread prices have recorded a 6% increase for six consecutive months.
The main reason for the rise in bread prices is due to the high cost of materials and supplies such as flour and eggs, which have been maintained at elevated levels due to the prolonging of the Russia-Ukraine war and related supply chain instability. Flour prices soared by 45.5% in September 2022 compared to the same month last year before returning to a downward trend the following year, but they remain high. Egg prices have also steadily risen, increasing by 8.0% in August of this year compared to the same period last year.
According to a report commissioned by the Fair Trade Commission from Chungnam National University's Industry-Academia Cooperation Group, as of 2023, Korea's consumer price index for bread stands at 129, exceeding that of the United States (125), Japan (120), and France (118). The average price of bread per 100g in Korea is 703 won, higher than France (609 won) and the United States (588 won).
The domestic bakery market grew by 25.7% from 6.24 trillion won in 2020 to 7.57 trillion won in 2022. Operating profit surged by 75.3%, increasing from 270 billion won to 470 billion won. The commercial bread market also achieved an average annual growth of 8.7%, reaching a scale of 3.9589 trillion won.
However, the report raises concerns about monopoly, noting that SPC Samlip holds a 79.8% market share in the retail sector for commercial bread. The Fair Trade Commission is currently investigating major food companies like Nongshim, ORION, and LOTTE Wellfood for possible collusion on the pricing of bread and snacks, and is also looking into allegations of price manipulation by the Korea Egg Producers Association.