Consumer groups urge lower ice cream prices… “In spite of the discovery of collusion, the hike is carried out in a short period of time”
Lotte Well Food and Binggrae “We haven’t considered price cuts yet”
Prices of ramen, snacks, and bread are cut one after another… Some ice cream price hikes in July ‘eyeball’
Up to 25% increase in ice cream prices… Convenience store food that is getting expensive one after another
(Seoul = Yonhap News) Reporter Seo Dae-yeon = The price of convenience store foods such as ice cream and coffee is rising again. According to the industry on the 25th, CU, GS25, 7-Eleven, and E-Mart 24 will increase the price of beverages, ice cream, snacks, and some canned goods by up to 25% on the 1st of next month. The product with the largest increase rate is ice cream, with Screw Bar, Jaws Bar, Okdong Java, Watermelon Bar, Wild Body, Pork Bar, and Amatna rising by 25% from 1,200 won to 1,500 won, respectively, and Papico at 1,500 won. to 1,800 won, a 20% increase. The photo shows ice cream on display at a convenience store in downtown Seoul that day. 2023.6.25 dwise@yna.co.kr
(Seoul = Yonhap News) Correspondent Park Sang-don = Recently, as prices of foods frequently sought by the common people, such as ramen, snacks, and bread, have been cut one after another, consumer groups urged that ice cream should also join in the price cut.
In particular, he emphasized that ice cream companies need to lower prices at least in order to return the profits they gained from price fixing to consumers.
However, ice cream makers are in a position that it is difficult to lower prices as they can no longer bear the cost burden due to rising prices of raw and subsidiary materials, labor costs, logistics costs, and electricity and gas rates.
According to the ice cream industry on the 3rd, Lotte Well Food[280360]has raised the supply price of ice cream products such as screw bars, pork bars, and watermelon bars at convenience stores by 25% since July.
Initially, it was decided to raise the price of ice cream supplied to convenience stores in April, but the schedule for the increase was postponed once due to the government’s price stabilization policy, and it was reflected this time.
This was notable because it was a price hike carried out at a time when ramen makers such as Nongshim, Samyang Foods, Ottogi, and Paldo, and confectionery and bakery makers such as Haitai Confectionery and SPC lowered their prices one after another.
Price adjustments for ramen, confectionery, and bakery products after the government’s recommendation
(Seoul = Yonhap News) Reporter Hyo-Rim Ryu = Nongshim has lowered the price of Shin Ramyun and Shrimp Crackers since the 1st, and Samyang Foods will also lower the prices of 12 products sequentially, including Samyang Ramen and Jjazzaroni. The photo shows a ramen stand at a large supermarket in downtown Seoul on the 2nd. 2023.7.2 ryousanta@yna.co.kr
Convenience stores even gave up a portion of their profits to take on the increased consumer burden from Lotte Well Food’s price hike, drawing more attention. Convenience stores G25, CU, 7-Eleven, and E-Mart 24 decided not to raise their retail prices.
An official from Lotte Well Food said, “We had to raise the supply price of convenience stores in April, but we delayed it in response to the government’s policy, and we joined late this time.”
Ice cream companies have raised the price of ice cream products one after another since February this year following last year.
Lotte Well Food raised the prices of Screw Bars and Jaws Bars in April of last year, and also raised the sales prices of Worldcon and Seolreim convenience stores. In February of this year, discount stores and general supermarkets raised prices for screw bars, pork bars, and watermelon bars.
Binggrae and Haitai Ice Cream, a subsidiary of Binggrae, also raised the prices of Together, Merona, Bungeo Samanco, Pbangtoa, Bravocon, and Polapo last year, and raised the prices again in February this year. Prior to Lotte Well Food, Binggrae and Haitai Ice Cream also raised their supply prices at convenience stores.
Spread of price cuts in the food industry
(Seoul = Yonhap News) Correspondent Kang Min-ji = Bread is displayed at a hypermarket in Seoul on the 28th, when the possibility of a bread price cut following ramen and snacks is expected. It is known that the industry is considering reducing the price of bread. 2023.6.28 mjkang@yna.co.kr
Ice cream companies are in the position that it is an inevitable choice because the increase in manufacturing costs has grown to a level that they can no longer afford, and management pressure is severe.
However, consumer groups urged food companies to participate in price stabilization because ice cream, like ramen, snacks, and bread, is a food that consumers can purchase without burden and feel small happiness in their daily lives.
Furthermore, he insisted that it be necessary to examine whether it was an inevitable choice to the extent that it could not handle the increase in raw material prices, or whether it was a price increase to create more profits.
An official from the Korea Council of Consumers’ Organizations said, “Even after price fixing for about four years last year was discovered, ice cream companies do not reflect, but rather continue to raise prices in short cycles and show an attitude of disapproval.” We need to lower the price at any rate,” he said.
Previously, in February of last year, the Fair Trade Commission issued a corrective order and a fine of 1,000 on charges of collusion in which ice cream companies such as Lotte Well Food and Binggrae agreed on ice cream sale and delivery prices and division of retail stores from February 2016 to October 2019. It announced that it would impose 35.045 billion won.
FTC imposes fines on ice cream companies that fix ice cream prices and distribution
(Sejong = Yonhap News) Reporter Kim Joo-hyeong = Fair Trade Commission Cartel Investigation Director Cho Hong-seon met with five ice cream manufacturers and sellers who agreed on ice cream sales and delivery prices and division of ice cream retailers at the Sejong City Government Complex Sejong on the morning of the 17th. We are briefing on the imposition of a total of 135 billion won in fines on each distribution business. 2022.2.17 kjhpress@yna.co.kr
Afterwards, the prosecution prosecuted without detention four executives from four companies, including Binggrae, Lotte Food, Lotte Confectionery, and Haitai Confectionery, on charges of violating the Fair Trade Act, and the Binggrae corporation was brought to trial as well.
However, the official position of the ice cream companies is that they are not considering a price cut for ice cream yet. However, due to the price cuts of ramen, snacks, and bread, public opinion is closely watched.
An official from Lotte Well Food said, “The operating profit margin in the first quarter of this year is only 1.9%, and the second quarter performance is also expected to be poor.”
An official from Binggrae also said, “The official position is that we are not reviewing price cuts yet.” It has to be big,” he said.
kaka@yna.co.kr
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