Food firms complain about gov't warnings against price hikes

The Korea Times

The Korea Times

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Mon, October 2, 2023 | 10:58

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Food firms complain about gov't warnings against price hikes

Posted : 2022-09-28 07:27

Updated : 2022-09-28 17:55

Ottogi mayonnaise is displayed at a large retail store in Seoul, June 28. Newsis

By Kim Jae-heun

Food companies here are expressing frustrations over the government's growing pressure on them to refrain from raising prices on their products amid soaring inflation, according to company officials Tuesday.

CJ CheilJedang, Ottogi, Samyang Foods, Lotte Chilsung Beverage, Crown Confectionery and other food firms say that they can hold off on hiking prices for a short period of time, but they will eventually have to charge consumers more at some point in the future.

"The government is trying to implement a policy that ignores the principles of the market economy. We don't know if it is the right decision to prevent only food firms from raising prices when all the businesses here are equally affected by increased interest loans, logistics and raw material costs," a food firm official said.

The Ministry of Agriculture, Food and Rural Affairs held a meeting on Monday with major companies here to request their cooperation concerning the country's food price stabilization.

"Despite the recent stabilization of gas and grain prices around the world, processed food prices here have been rising high from 7 percent to 8 percent. Some companies have already raised their product prices recently and it can lead to other companies following suit, which will put a strain on people's livelihoods," the ministry official said.

"Local food firms, in general, saw increases in their sales and operating profits in the last few months and we need their cooperation as we expect international food material costs to drop after the fourth quarter of this year."

Nonetheless, companies are complaining about the government's unfair policy, as other food firms have already increased their product prices two to three times.

"The government has to create an environment where private companies can make their own decisions whether or not to increase prices. It should also offer support measures for companies directly affected by rising living costs before telling them to freeze their product prices. This way, they will not choose to increase product prices instantly next time they face inflation," another food firm official said.

jhkim@koreatimes.co.kr