"Why Pay More?"... As Tariffs Disappear, Consumers Turn to This Milk

Tariffs on US and EU Milk Reduced and Abolished in Succession
Rising Demand Driven by Room Temperature Storage and Low Prices

As tariffs on milk from the United States and Europe have effectively disappeared, imported sterilized milk is rapidly taking over the domestic market. There are concerns that the competitive landscape could become even more unfavorable if exchange rate conditions improve, as imported sterilized milk is already priced significantly lower than domestic refrigerated milk and offers greater convenience in storage.

A citizen choosing milk at a mart. Photo by Yonhap News

According to the Korea Customs Service on January 21, starting this year, tariffs on milk from the United States have been reduced from the previous 2.4% to 0%. Tariffs on European milk have also been lowered from 4.8-2.5% to 2.5-0%, and will be completely eliminated starting in July. At one point, the average tariff barrier for dairy products reached 36%, but now it has effectively disappeared.

In terms of price, imported sterilized milk already holds the advantage. Polish sterilized milk "Mlekovita 3.5% (1L)" is sold for around 1,900 won at major supermarket online malls. In comparison, the same volume of domestic refrigerated milk is priced at around 3,000 won, making the imported product about 35% cheaper. Industry insiders believe that once tariffs are fully eliminated, the price of European milk could drop by an additional 40 won per liter.

Sterilized milk can be stored at room temperature and has a longer shelf life, reducing the burden of distribution and inventory management. Its nutritional content is also considered to be similar to that of refrigerated milk. Both refrigerated white milk and sterilized milk undergo the ultra-high temperature (UHT) process, and while some vitamins may be reduced during production, the basic nutritional structure remains similar, according to industry explanations.

Opinions are divided regarding taste differences, but many say it is hard to notice when used as an ingredient for coffee or baking. For this reason, the use of imported sterilized milk is rapidly increasing, especially among independent cafes and bakeries facing high cost pressures.

The increase in import volume is also steep. According to Korea Customs Service statistics, imports of sterilized milk rose from 1,214 tons in 2016 to 48,671 tons in 2024, an approximately 40-fold increase in eight years. In the third quarter of last year, imports also reached a record quarterly high of 17,424 tons.

However, for now, a high exchange rate is slowing the pace of price declines. The rising won-dollar exchange rate and logistics costs are partially offsetting the effects of tariff reductions, leading some in the distribution sector to say that price changes have not been significant. Nevertheless, most expect that if the exchange rate stabilizes, the price competitiveness of imported sterilized milk will inevitably increase further.

The domestic dairy industry faces dual pressures from structural cost burdens and declining consumption. Last year, the price of raw milk in Korea was 1,246 won per liter, about twice the price in the United States. As milk consumption decreases due to low birth rates and an aging population, consumers are also turning to alternatives such as soy milk and plant-based beverages. While the industry is responding with premium and functional products, there is considerable analysis suggesting that consumers may shift to cheaper options.