Subscribe
E-Paper
 |
| A photo of a box of fried chicken sold by bhc Korea Times file |
 |
| Minister of Agriculture, Food and Rural Affairs Chung Hwang-keun Korea Times file |
Major local fried chicken franchises are coming under pressure to freeze prices, as recommended by the food ministry seeking to curb inflation, according to market watchers, Monday.
Advancing the guidance are soaring expenses needed to dine out in the broader context of a spike in the overall cost of living over the past few months, led by sellers of fried chicken and beverages.
Statistics Korea data showed the consumer price index (CPI) reached 110.56 in March, up 4.2 percent year-on-year. The 13-year high was driven by a 28.4 percent year-on-year increase in utilities including electricity, gas and water as well as a 7.4 percent jump in the cost of dining out. On a yearly basis the cost of dining out hit a 30-year high of 7.7 percent, the steepest rise since 10.3 percent in 1992.
Whether the government would go as far as commissioning an audit of the franchises remains to be seen. Under the former Lee Myung-bak administration, many local fried chicken franchises withdrew plans to increase prices, spooked by the food ministry's threat of an audit into their financials to see if any undue gains in profit were made at the expense of taxpayers.
The Ministry of Agriculture, Food and Rural Affairs held a meeting with the food and beverage franchise industry on April 21.
Among those in attendance were officials of Kyochon, bhc, Genesis BBQ, Mom's Touch and Starbucks Korea.
The government recommended against further increases in prices of the popular food items.
"Fried chicken prices are not in line with those of key ingredients showing signs of moderation, including meat and palm oils," a ministry official said. "The franchises should cooperate with the government efforts to stabilize prices."
The recommendation followed a price increase of up to 3,000 won ($2.25) for a bucket of fried chicken.
Kyochon raised the price of its flagship original fried chicken menu item to 19,000 won, up from 16,000 won. The price of its Honey Combo menu item jumped to 23,000 won, up from 20,000 won. Adding the delivery fee of between 3,000 won and 5,000 won, the cost is approaching 30,000 won.
BBQ, operated by Genesis BBQ, and bhc have yet to follow, because it has been only a few months since they raised the price by 1,000 won last year.
Burger King, McDonald's and Lotteria raised menu item prices by as much as 5.4 percent in February.
"We do not have plans to raise prices," a bhc official said.
"We have no plans to increase the prices for the time being," a Kyochon official said.
"We are not considering price hikes, regardless of government recommendations," a BBQ official said.
