Dairy Companies Raise Milk Prices on 17th
Cream, Butter, Fermented Dairy Products Also Increased
Feared Milkflation Becomes Reality
Self-Employed Struggle... Menu Price Hikes Follow
[Asia Economy Reporter Song Seung-yoon] From the 17th, the price of white milk will rise simultaneously. Along with white milk, prices of dairy products such as cream will also increase. Following this, prices of other foods containing milk, such as bread, ice cream, and coffee, are expected to rise sequentially.
Major domestic dairy companies including Seoul Milk Cooperative, Maeil Dairies, and Namyang Dairy Products implemented price increases for white milk and other products starting on this day. Seoul Milk raised the prices of all milk products by an average of 6%. The price of the 1000㎖ white milk product increased by 6.6%, rising from 2,710 won to the high 2,800 won range at large supermarkets. Seoul Milk also decided to raise the price of its cafe-exclusive milk, ‘Milk Master,’ by about 6.3%. However, the timing of this increase requires negotiation by distribution channel, so it will take effect not on this day but from the 1st of next month.
On the same day, Maeil Dairies raised the price of the 900㎖ white milk product from 2,610 won to 2,860 won, a 9.6% increase, and also increased the wholesale prices of chocolate milk and strawberry milk by about 10%. Namyang Dairy Products raised the price of the 900㎖ white milk product from 2,650 won to the high 2,800 won range at large supermarkets, an increase of about 8%. Dongwon F&B also raised milk product prices by an average of 5% starting this day.
Prices of dairy products other than milk also increased. Seoul Milk raised the prices of Seoul Milk fresh cream and butter by 10% and 7%, respectively, and increased the wholesale price of the fermented milk product ‘Biyotte’ by around 5%. Last month, Seoul Milk had already raised the wholesale prices of some cheese products, such as cheddar cheese, by about 20%. Earlier, Maeil Dairies had already raised the prices of fermented milk products by 15-25% last month before the raw milk price was decided, and also increased the prices of sour cream and whipping cream by 6-7%.
Dongwon F&B also raised prices of dairy products such as Denmark drinking yogurt, Yogurmil, and Denmark Origin starting this day. Binggrae will raise the price of banana-flavored milk by about 13%, from 1,500 won to 1,700 won at convenience stores. Good Morning Milk sold through channels other than convenience stores will increase by 8%, and Yoplait Original will rise by 16%.
This price increase of milk and other dairy products stems from the rise in raw milk prices. The raw milk price increased by 49 won from 947 won per liter to 999 won, triggering a simultaneous rise in dairy product prices starting with white milk. This raw milk price increase is the first in 2 years and 3 months since the Dairy Promotion Board decided on a 21 won increase in August 2020.
Not only dairy products but also other foods using milk as an ingredient, such as bread, ice cream, and coffee, are expected to follow with domino price increases, creating an atmosphere where ‘milkflation’?a rise in product prices across the food industry?is becoming a reality. Companies have also begun carefully considering the timing of their price increases.
The concerns of self-employed operators running cafes and dessert specialty shops have deepened. As the supply prices of dairy products such as milk and cream have already risen or are expected to rise, cases of menu price increases are continuing. Ryu Jeong-hyun (34, pseudonym), who runs a cafe in Suwon, Gyeonggi Province, said, “Along with the increase in dairy product prices, we plan to raise menu prices by 500 to 1,000 won. Since the prices of other ingredients have also all risen, even with price increases, profit margins are actually worse than before.”
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
