"Milk Prices Rise Again"... Consumers Turning to PB Products

Seoul Milk Price Increase on Next Month 1st
Three Major Supermarkets' PB Products
About 1000 Won Cheaper per 1ℓ than Regular Pasteurized White Milk

Produced by Konkuk Dairy and Yonsei Dairy, etc.
No Significant Difference in Taste and Nutrition
Imported UHT Milk is Cheaper but Consumers Prefer Refrigerated Milk

Housewife Jang Ji-hyun (38, pseudonym) recently switched the milk she always buys at the store to ‘Simple Plus 1st Grade’ sold at Homeplus. She often gives her 5-year-old daughter cereal for breakfast, but with rising grocery prices and milk costs, she turned her attention to the relatively cheaper private brand (PB) products of large discount stores. Jang said, "The price is cheap, so I bought it thinking I’d try it once, and I felt there was no big difference in taste or nutrition." She added, "I easily spend 100,000 won each time I shop, so I’m looking for ways to reduce costs as much as possible. I plan to continue choosing PB milk at the mart."

Customers are selecting milk products at the milk section of a large supermarket in Seoul. Photo by Yoon Dong-ju doos7@

As milk prices are expected to rise again due to milkflation (milk + inflation), more consumers are expected to seek out relatively inexpensive mart PB milk. PB milk refers to milk products that marts commission dairy manufacturers to produce and then sell under their own exclusive brand names.

According to the industry on the 19th, the three major discount stores?Lotte Mart, E-Mart, and Homeplus?are selling PB milk under their own brands. Lotte Mart offers ‘Oneul Joeun 1st Grade Milk,’ E-Mart sells ‘No Brand Good Milk,’ and Homeplus markets ‘Homeplus Signature 1A Milk’ and ‘Simple Plus 1st Grade Milk.’ These products are priced around 2,000 won for 900?1000 ml, about 1,000 won cheaper than regular pasteurized white milk like Seoul Milk, which costs nearly 3,000 won. With Seoul Milk planning to raise pasteurized milk prices starting next month on the 1st, the price gap with PB milk is expected to widen further.

Large discount stores explain that PB milk is not qualitatively inferior to regular pasteurized milk like Seoul Milk. The manufacturers of PB milk products for the three major marts are Konkuk Dairy, Busan Milk Cooperative, and Yonsei Dairy. The milk they produce is of the highest grade 1 quality based on bacterial count standards, making it qualitatively similar to regular pasteurized milk. Despite this, the reason for the lower price is that milk is a fresh product that must be consumed quickly. If it is not sold within the expiration date, it must be turned into powdered milk or discarded. From the dairy manufacturers’ perspective, producing PB milk helps regulate supply and demand. An industry insider said, "Milk must be consumed within about ten days of production, or it must be discarded," adding, "From the dairy manufacturers’ point of view, PB products are used to adjust volume."

As milkflation accelerates, the number of consumers seeking PB milk is also increasing. Lotte Mart’s Oneul Joeun 1st Grade Milk showed about a 20% sales growth compared to the same period last year as of last month, and E-Mart’s No Brand Good Milk also saw about a 10% increase in sales during the same period. Homeplus Simple Plus 1st Grade Milk sales increased by 63%.

Demand for imported sterilized milk with similar price ranges is also rising due to milkflation. However, since most domestic milk consumers still prefer ‘fresh products,’ the growth trend of PB milk is expected to continue. Sterilized milk has a shelf life of about one year from the manufacturing date and can be stored at room temperature, which is an advantage over regular pasteurized milk, but it is considered relatively inferior in terms of freshness.

An industry official said, "Although imported sterilized milk is currently growing due to its low price and storage convenience, consumers still prefer refrigerated milk, so pasteurized milk holds a dominant market share that cannot yet be compared." He added, "Even if PB milk prices rise due to increased raw milk costs, the price increase will be smaller compared to regular pasteurized milk, so the number of consumers seeking PB milk is expected to grow."

Meanwhile, Seoul Milk, the leader in the dairy industry, will raise prices for milk and dairy products starting October 1. The price of Seoul Milk’s 1-liter product sold at large discount stores is expected to be in the high 2,900 won range. Seoul Milk stated that the decision was made due to an 88 won (8.8%) increase per liter in raw milk prices starting in October, along with rising labor costs, electricity fees, and material prices.