Amid Growing Government Pressure... Food and Beverage Industry Successively Announces "No Price Increase"

Government Takes Serious Steps to Curb Price Increases
Food and Beverage Industry 'On Edge'
Withdraw Price Hikes... "Let's Pretend It Never Happened"

As the government begins to actively curb price increases following a survey of the alcoholic beverage industry, the food and beverage sector is also closely monitoring the situation. There have been consecutive cases of companies withdrawing their price increase plans or proactively announcing that they have no plans to raise prices. The competition among companies planning or intending to implement price hikes is expected to intensify.

According to the industry on the 1st, the Ministry of Agriculture, Food and Rural Affairs held a meeting for price stabilization at the Korea Food Industry Association in Seocho-gu, Seoul, the day before, meeting with major food and beverage companies. Executives from the food and beverage industry attended, including Kim Sang-ik, Head of Food Korea Business at CJ CheilJedang; Lee Byung-hak, CEO of Nongshim; Hwang Seong-man, CEO of Ottogi; Kim Seong-yong, CEO of Dongwon F&B; Lee Seung-jun, CEO of Orion; and Hwang Jong-hyun, CEO of SPC Samlip. At this meeting, requests to refrain from raising prices for price stabilization were reiterated. Since last year, the government has continuously urged companies to hold off on price increases. Meetings related to price stabilization measures have also been held about once a month. This meeting was held about a month after the one in early last month.

Recently, direct pressure has also continued. When signs of price increases in alcoholic beverages were detected this year, the government announced it would launch a comprehensive survey of the alcoholic beverage industry. Although the intention is to closely examine the overall structure of the alcoholic beverage industry, it is perceived as effectively wielding a pressure card.

In fact, Hite Jinro, the number one soju company, officially declared it would not raise soju prices just one day after the government’s survey of alcoholic beverage companies became known. OB Beer also firmly stated that it has no plans to increase product prices for the time being. Pulmuone Samul unusually withdrew its plans to raise prices on bottled water products altogether. In this situation, other companies considering price hikes are also hesitant to take action easily.

There are also some concerning views. Critics argue that the government is directly intervening in the market. There are growing voices questioning whether this contradicts the government’s policy, which has emphasized free market competition.