"I'd Rather Buy Bread at the Supermarket"... Prices Jump 38% as Fair Trade Commission Remains Silent [The Secret of Bread Prices]

① Korean Bread Prices Jump 38% in Five Years
Fair Trade Commission Delays Release of Investigation Results
Major Corporations Like Paris Baguette and Tous Les Jours Drive Up Prices
Rising Popularity of Premium Independent Bakeries Makes Bread Even More Expensive
Increase in Raw Material Costs Such as Flour and Sugar Also a Factor

Inside the Tous Les Jours store located in Yongsan-gu, Seoul. Photo by Asia Economy DB

Editor's NoteAccording to the consumer price trends released by Statistics Korea, in May, the price of processed foods rose by 4.1% (compared to the same period last year), while bread prices surged by as much as 6.4%. The consumer price index for bread stood at 138.48, which means it has risen by 38.48% over five years compared to the base year of 2020 (100). This increase is steeper than that of tteokbokki and fried chicken, both of which are beloved snacks among Koreans. Bread was once a snack enjoyed by everyone, but now its price has reached a point where it is difficult to choose it without hesitation. How did bread prices in Korea end up rising so sharply?

"We will closely analyze the current status of the domestic bakery market, transaction structure, and factors driving price increases to come up with measures to improve the distribution structure." (April 2024)

It has been over a year since the Korea Fair Trade Commission (hereafter referred to as the Fair Trade Commission) announced that it would establish regulatory and distribution structure improvement measures through a "Bakery Industry Status Survey" research project. However, the commission has yet to properly identify the causes or present effective measures. The Fair Trade Commission proceeded with the research project as planned to investigate the causes of rising bread prices. The results and countermeasures, which were originally scheduled to be released around October last year, were postponed to the end of the year, and as of June 2025?over a year later?remain undisclosed. An official from the Fair Trade Commission stated, "The results of the research project are available but cannot be made public," adding, "We are currently in discussions with the relevant ministries."

Despite recognizing the problem of rising bread prices and launching a fact-finding investigation, the Fair Trade Commission has delayed the disclosure of specific causes and the announcement of countermeasures. Meanwhile, Korea’s notoriously high bread prices continue to rise day after day, increasing the burden on consumers. The situation has even given rise to a new term: "Breadflation" (bread + inflation).

According to the National Statistical Portal (KOSIS) of Statistics Korea on the 14th, last month’s consumer price index for bread was recorded at 138.48. Compared to the base year of 2020 (100), this means that bread prices have soared by 38.48% over five years. During the same period, the price increases for other items were as follows: ▲Tteokbokki (34.69%) ▲Coffee (34.66%) ▲Fried chicken (28.21%) ▲Ramen (24.64%) ▲Tteok (24.18%) ▲Snack confectionery (18.60%), all of which were lower than the increase for bread.

The upward trend in bread prices is also evident in the price hikes at franchise bakeries. In February, SPC Group’s Paris Baguette raised the prices of 96 types of bread and 25 types of cake by an average of 5.9%. CJ Foodville’s Tous Les Jours increased the prices of about 110 types of bread and cake by an average of 5% starting March 1. Both companies explained, "This was an unavoidable decision due to rising costs of key raw materials and various other expenses."

The most commonly cited reason by the baking industry for raising bread prices is the increase in the cost of key raw materials such as flour and sugar, which are heavily dependent on imports. For example, about 99% of flour is imported, so when international wheat prices rise, domestic bread prices are directly affected. This situation is different from countries like France, where the wheat self-sufficiency rate is high.

However, even when raw material prices fall, bread prices do not return to previous levels. This suggests that the rise in bread prices cannot be attributed solely to increases in the cost of flour, sugar, and other major raw materials. For instance, the international wheat futures price, which soared to $419 per ton in May 2022 due to the impact of the war in Ukraine, has since declined, dropping to $199 per ton as of June 1.

This is why there are growing concerns that the oligopolistic market dominated by large companies and the complex distribution structure are also contributing to the increase in bread prices. In the domestic bakery market, large corporations have led price-setting and market share. Because bread passes through multiple stages?from raw material importers to wholesale and retail suppliers?margins accumulate at each step, inevitably driving up the final consumer price.

As government authorities have failed to respond quickly to the rapidly rising bread prices, the burden of these price hikes has fallen squarely on consumers. Lim Sojeong, a 30-year-old office worker, said, "I used to buy bread frequently at local bakeries, but as prices have risen significantly over the past few years, it has become burdensome to buy bread as often. Instead, I mainly buy bread at supermarkets. Especially if I go during the discount period before closing, I can get it at a lower price, so I find myself going to supermarkets more often."