bhc Chicken "Switching Brazilian Chicken to Domestic Chicken"

Switch to Domestic Refrigerated Meat When Imported Stock Runs Out
Currently, Boneless Chicken Like Bburinkle and Machoking Is Brazilian
Consumers Say "Skimflation," BHC Cites "Supply Issues"

bhc Chicken, embroiled in controversy over 'Brazilian chicken,' will start making boneless chicken with domestic chicken from May this year.

On the 19th, a bhc Chicken official told Asia Economy in a phone interview, "We plan to switch the chicken for boneless chicken from frozen Brazilian chicken to domestic refrigerated chicken by May." He added, "It would be better to switch to domestic chicken sooner, but we have to use up the previously contracted Brazilian import volume first."

Last May, bhc Chicken changed the chicken in seven boneless chicken menu items?Magic Cl, Double Pop, Gold King, Curry Queen, Red King, Mat Choking, Ppurinkle, and Basak Cl?from domestic to Brazilian chicken. bhc Chicken explained that the switch to imported chicken was to ensure a stable supply amid unstable domestic chicken supply.

However, controversy arose as Brazilian chicken continued to be used even after the domestic chicken supply stabilized. Brazilian chicken, imported in frozen form, is cheaper per kilogram than domestic chicken but is considered inferior in taste and quality. Some consumers criticized bhc Chicken's practice as 'skimpflation,' accusing the company of using cheap ingredients to cut costs.

bhc Chicken refuted these claims. A bhc Chicken official said, "The main reason for switching to Brazilian chicken last year was not price but stable supply," adding, "The headquarters had an obligation to supply franchisees smoothly." Regarding the delay in switching back to domestic chicken, he explained, "The scale and end dates of supply contracts vary by company, and the consumption rate differs," emphasizing, "We are not trying to maintain imported chicken."

Despite these explanations, the controversy does not seem to subside easily. In particular, bhc Chicken raised prices on 85 menu items by 500 to 3,000 won in December last year, citing increases in raw material costs, labor, and rent, which fueled the controversy further as prices for boneless chicken menus using Brazilian chicken also increased. For example, the price of Ppurinkle boneless chicken rose from 20,000 won to 23,000 won. The price of Brazilian chicken is about 2,000 to 3,000 won per kilogram, roughly half that of domestic chicken, meaning the boneless chicken saw the maximum price increase.

Meanwhile, bhc Chicken's operating profit margin in 2022 was 27.95%, higher than its peers in the industry. During the same period, BBQ recorded 15.31%. Among the three major chicken companies, Kyochon Chicken, the only one to disclose last year's performance, recorded 5.6%.