Due to Bottled Water Price Increase... June Inflation Rate Highest in 11 Years

Bottled Water Consumer Price Index Up 10.8% Year-on-Year
Highest Since 11.6% in June 2012
Price Hikes on Some Products Put on Hold

Last month, the price of bottled water recorded a double-digit growth rate, rising to the highest level in 11 years.

A large supermarket water bottle display in Seoul
[Image source=Yonhap News]

According to the National Statistical Portal of Statistics Korea on the 10th, the consumer price index for bottled water last month was 112.09, up 10.8% compared to the same period last year. This is the highest growth rate in 11 years since June 2012, when it was 11.6%. The price increase rate of bottled water jumped from 0.4% in January to 7.3% in February, then rose along an upward curve to 10.1% in March and 10.2% in April, slightly slowing to 9.3% in May, but rebounded again last month.

The record-high price increase rate of bottled water is due to the price hikes of major bottled water products. Lotte Chilsung Beverage raised the ex-factory prices of bottled water and beverage products, including Icis, by an average of 8.4% starting from December last year. Icis is the second largest bottled water product in market share after Jeju Samdasoo.

The timing of price increases varied by distribution channel. Convenience store prices were applied from March, with the price of the 500ml product rising from 950 won to 1,100 won, a 15.8% increase, and the 2L product rising from 1,700 won to 1,950 won, a 14.7% increase. In February this year, Jeju Special Self-Governing Province Development Corporation raised the ex-factory price of Jeju Samdasoo, the market share leader in bottled water, by an average of 9.8%. This was the first price adjustment in five years since 2018. A representative from Jeju Development Corporation explained, "The price of PET bottles has increased more than threefold compared to three years ago, and logistics costs have also risen due to fuel prices for transporting products by ship, leading to a price increase after five years."

Haitai htb also raised the price of Gangwon Pyeongchang Water products starting in February, and Dongwon F&B increased the price of Dongwon Spring Water by 4% in April only for agency channels. Additionally, some convenience stores raised the prices of private brand bottled water by 100 to 200 won starting in April, and imported bottled water prices also increased. Since processed food prices usually show an impact on consumer prices about three to four months after ex-factory price hikes due to the time it takes to sell existing inventory, the price increase of bottled water may grow even larger after July.

Some companies have not raised bottled water prices amid the government's price stabilization policies. Initially, Pulmuone planned to raise the ex-factory price of Pulmuone Spring Water by 5% starting in March but withdrew the plan. Nongshim has not raised the price since increasing the ex-factory price of Baeksansu by an average of 7.8% in January 2018. A Nongshim official said, "We are still bearing the burden," and added, "There are no plans to raise Baeksansu prices for the time being."