[Asia Economy Reporter Seungjin Lee] Seoul Milk Cooperative announced that it will raise the price of milk on October 1 by reflecting a 21 won increase in raw milk prices, and Maeil Dairies and Namyang Dairy Products have also entered the countdown for price hikes. This milk price increase is expected to have a significant impact on self-employed business owners running small bakeries and cafes.
Seoul Milk announced on the 23rd that it will raise the price of its white milk products by 5.4% per liter starting October 1. This price increase is the first in three years since 2018. With this price hike, the price of Seoul Milk white milk sold at large supermarkets is expected to rise from the mid-2,500 won range to around 2,700 won per liter.
With the price increase by Seoul Milk, the industry leader, a domino effect of price hikes by dairy companies such as Maeil Dairies and Namyang Dairy Products is expected to become a reality. An industry insider stated, "We are currently coordinating the specific amount and timing of the increase," indicating that price hikes will occur soon.
This price increase comes as the Dairy Promotion Board raised the raw milk price by 21 won to 947 won per liter. Since August, the dairy industry has been supplied with raw milk at 947 won per liter, up 21 won (2.3%) from the previous 926 won, according to the 'Milk Price Table.' Although the raw milk price has risen, the selling price of milk has not been increased, causing the dairy industry to suffer losses amounting to tens of billions of won over about two months.
The increase in milk prices is expected to have a ripple effect, leading to price hikes in other products containing dairy ingredients such as bread and various snacks. In particular, voices of distress are emerging mainly from self-employed business owners operating small related establishments.
A, who runs a cafe in Dongdaemun-gu, Seoul, said, "A cafe latte, which mostly consists of milk, is sold for 3,000 won, but if the milk price rises like this, the margin will be close to zero," adding, "There are large franchise stores nearby, so if I raise prices, customers will stop coming, leaving me stuck with no way out. I have no confidence in enduring this any longer."
The situation is equally difficult for bakeries. B, who runs a bakery in Seoul, said, "With egg prices rising sharply due to the avian influenza (AI) outbreak, the increase in milk prices inevitably leads to product price hikes," adding, "If milk prices go up, the price of fresh cream also rises, so we have no choice but to raise prices."
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