Food firms hold off on price hikes as gov't wrangles with inflation

The Korea Times

The Korea Times

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Tue, September 26, 2023 | 06:58

Companies

Food firms hold off on price hikes as gov't wrangles with inflation

Posted : 2023-03-03 08:28

Updated : 2023-03-05 14:58

A customer selects a sauce product at a store in Seoul, on Feb. 23. Newsis

By Kim Jae-heun

A growing number of local food firms are calling off plans to raise the prices of their products, despite soaring raw material costs and rising wages, as the government increases pressure on them to join its fight against inflation, according to industry officials Thursday.

Minister of Agriculture, Food and Rural Affairs Chung Hwang-keun met with the CEOs of 13 local food giants on Tuesday and asked them to refrain from increasing food prices ― at least during the first half of this year.

The country's largest food firm, CJ CheilJedang, took the lead to put its price hike plan on hold.

"Although the company still faces pressure to cope with the rising cost of raw materials and other production expenses, we decided not to increase food prices to ease the burden felt by consumers," a CJ CheilJedang official said.

The food giant originally planned to increase the price of its processed foods, including "Katsuo udon" and "Spicy udon," by an average of 9.5 percent from March 1, but decided to hold off. It also planned to raise the prices of six seasoning and sauce items by up to 11.6 percent in the same period, but withdrew it.

Minister of Agriculture, Food and Rural Affairs Chung Hwang-keun speaks during a meeting with the CEOs of 13 food firms at the Korea Food Industry Association in Bangbae-dong, Seoul, on Feb. 28. Courtesy of Ministry of Agriculture, Food and Rural Affairs

Another food firm, Pulmuone, froze its price for mineral water products a day before it met with the minister.

"We were going to raise the store price of bottled water by 5 percent from March 1, but pulled it back as consumers are suffering from food inflation," Pulmuone official said.

Nongshim, Dongwon F&B and SPC have all followed CJ CheilJedang and Pulmuone to cooperate with the government.

"We have already increased our product prices last year. We will not raise prices in the first half of this year," a Nongshim official said.

Dongwon F&B also said it is not discussing any plan to increase food prices, at least within the first half of this year.

"The government is really trying to fight inflation and we want to cooperate. To my understanding, we won't increase our bakery product prices within this year," an SPC official said.

jhkim@koreatimes.co.kr