Leading processed food companies and franchises have upped their prices in the past week, adding to the already-high inflationary pressure.
The industry-wide increase arrived following an almost 10 percent price hike by sugar manufacturers in December. The industry’s No. 4 DongA One said it will raise wholesale prices of flour by 8.6 percent starting Tuesday.
Haiti Confectionary & Foods increased wholesale prices of 24 brands by 8 percent on average, including that of Oh-yes, Homerun Ball and French Pie.
McDonald Korea raised the prices of some of its lunch menu by up to 300 won starting Friday.
“The increase was inevitable because our lunch meals were offered at discounted prices already. So the increase came there to offset cost jumps on pork, chicken, milk and flour,” Rye Ji-eun, a spokeswoman at the franchise said.
Burger King Korea upped the price of coke by 100 won to 1,600 won per cup.
Price hikes started to appear due to high inflation despite Seoul’s pressure on the private sector to hold on.
The country’s inflation hit a 29-month high in March on record-high exports and import price jumps of raw materials.
The consumer price index advanced 4.7 percent from March 2010, continuing the steep rise from February’s 4.5 increase.
The government has been facing an uphill battle to tame inflation and last month the Bank of Korea raised the key benchmark interest rate for the second time this year to 3 percent.
Beer importer Miller Brewing Korea is in talks with major retailers to increase sales prices of its 10 products by 5 percent on average, sources said.
Retailers and restaurants expected to follow suit which would weigh heavily on low-income families.
“The food industry has been waiting for just one of its competitors to raise prices as it is increasingly under the pressure of soaring import costs,” an insider said.
“It is safe to assume more price increases on some processed foods.”
The nation’s leading producer of processed food CJ Group in December increased sugar prices by 9.7 percent after bad weather in major exporters such as Brazil and Australia sent raw sugar to a 30-year high in New York.
By Cynthia J. Kim (email@example.com