Chicken Industry Woes... Price Increases Are Not Easy
Franchise Owners Say "Nothing Left After Labor Costs"
With the price of live chickens reaching its highest level in 36 years, restaurants that use chicken as their main ingredient are facing a crisis. The chicken industry is under intense pressure to raise prices, causing difficulties for small business owners. As the peak summer season begins, significant increases in the price of Samgyetang (ginseng chicken soup) are also expected, leading to considerable ripple effects.
According to the Korea Broiler Association's live broiler price on the 15th, the average nationwide price of live broilers the previous day was 3,190 KRW per kg for large and medium sizes, and 3,090 KRW for small sizes. Since the 7th of this month, prices for all sizes have risen above 3,000 KRW and have remained steady at that level.
The price of live broilers has reached its highest point in 36 years since the association was established in 1987. The ongoing rise in chicken prices is largely due to the sharp increase in feed costs that began last year. Additionally, heating costs for operating heating equipment such as blowers have also increased, causing overall production costs to surge significantly.
Given this situation, the chicken industry is facing an urgent crisis. Especially as most expenses such as delivery fees, labor costs, and gas bills have risen sharply, the soaring price of chicken?the main ingredient?is deepening the worries of chicken restaurant owners. In most franchise chicken restaurants, processing costs such as live chicken salting and cutting, as well as costs for oil, sauces, and other ingredients, plus distribution expenses, have steadily increased since last year. With chicken prices now reaching record highs, many claim that it is impossible to maintain any profit margin.
Kim Young-cheon (37, pseudonym), who runs a franchise chicken restaurant in Yeonsu-gu, Incheon, said, "Last year, the prices of oil and flour rose significantly, and gas bills surged, but now the price of chicken has also increased, which is very worrying." He added, "I run the business alone without employees, but even then, I can barely cover labor costs."
Some speculate that chicken prices might surpass 20,000 KRW and even reach the 30,000 KRW range. In fact, in self-employed communities, there has been frequent debate recently among chicken restaurant operators about whether to raise prices.
An industry insider said, "With raw material prices at an all-time high and ongoing government pressure, raising prices is not an easy decision. Ultimately, prices will have to go up, but consumer backlash is also significant."
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