[Editorial Note] Will Price Stabilization Measures Be Different This Time?

Industry Anxiety Grows After President Lee's Press Conference
Focus Needed on Cost Structure Review, Not Corporate Pressure

"We will mobilize every possible measure to ease the burden of living expenses for the people."

While President Lee Jaemyung's remarks at the press conference marking his 30th day in office on July 3 are welcome, it is hard not to worry when considering what those "measures" might actually entail. This is because, in the past, the "measures" proposed by nearly every administration have often been market-distorting policies such as "pressuring companies."

Since the Game Incident, companies have raised prices on 53 processed food items including coffee, bread, frozen foods, and ramen, causing a crisis in "table prices." Many analysts believe that companies had refrained from raising prices as part of cooperating with the government's price stabilization measures but raised product prices massively during the government’s administrative gap. Photo shows the ramen sales stand at a large supermarket in Seoul on June 10, 2025. Photo by XXX

According to the June consumer price trends recently released by Statistics Korea, prices for processed foods rose by 4.6% compared to a year earlier. This is double the overall consumer price inflation rate of 2.2%. Out of 73 processed food items, prices increased for 62 of them year-on-year. In particular, the price hikes for items frequently purchased by ordinary citizens, such as ramen (6.9%) and coffee (12.4%), were especially notable.

The food industry is closely monitoring the government’s actions. Immediately after President Lee took office, he questioned in a meeting whether it was true that ramen now costs 2,000 won, prompting the government to quickly launch an "Emergency Economic Monitoring Task Force." In this context, following the July 3 press conference, anxiety is spreading in the food industry about what kind of "coercive" measures the government might introduce. The pervasive sense of tension in the industry, with companies feeling they could be "summoned" by the government at any time, reflects this atmosphere.

The situation was similar under previous administrations. During the presidency of former President Yoon Sukyeol in 2023, when Deputy Prime Minister and Minister of Economy and Finance Choo Kyungho publicly called for lower food prices, companies like Nongshim and Ottogi, singled out as main culprits of "price hikes," were left with no choice but to reluctantly reduce the shipping price of ramen by 50 won per unit.

The government’s intention to stabilize prices and protect the livelihoods of ordinary people is not the issue. However, the government has more tools for price stabilization than simply "pressuring companies," and it has the obligation and responsibility to devise measures that may take longer to show results but distort the market less. In reality, approaches that unilaterally place the burden of immediate price cuts on companies have clear limitations. There is some hope that this administration may be different, especially since Prime Minister nominee Kim Minseok has stated, "The era of suppressing sales prices is over."

The recent rise in processed food prices is due to increased cost burdens on food companies. Not only raw material prices, but also the costs of packaging materials, logistics, labor, and exchange rates are all putting pressure on companies. Although international grain prices have declined somewhat, there is a time lag before this is reflected in actual import prices, and in many cases, the weak won against the yen has even increased import costs. Forcing price cuts unrelated to actual costs ultimately leads to lower product quality and, in the long run, results in reduced production and diminished investment. In trying to protect prices for ordinary people, this could instead undermine food safety and the competitiveness of the industry.

The government may be tempted to tout "policy achievements" by pressuring companies to lower prices of ramen or coffee. This tendency is especially strong for newly inaugurated administrations. While it may sound obvious and may take time, it is necessary to once again emphasize the need for structural solutions. The government should review the cost structure of food products and ease corporate burdens such as logistics costs and taxes, so that price reductions can occur in a more market-driven manner.