Being seen by South Koreans as "national cuisine" chicken, the recent price boom and chicken inflation" word appeared on South Korean social platforms.
According to Yonhap News Agency, due to the continuous price increase, many fried chicken chain brands in South Korea have successively raised their prices. At present, the single take-out price of major fried chicken brands has approached 30,000 won (about RMB 150 yuan).
Take Tongque District, Seoul as an example. A honey fried chicken of the well-known brand school village fried chicken sells for about 25,000 won, and BBQ golden olive fried chicken sells for about 23,000 won; If the delivery fee of 2,000 to 5,000 won is added, the take-out price of a fried chicken can reach up to 30,000 won.
Shin Jiseon, a responsible researcher at the China Institute of Sungkyunkwan University, who studied PhD in Peking University for four years and returned to South Korea this year, was also "back-stabbed" by the price of fried chicken in his hometown.
In an interview with China News Agency, she said that she has lived in China and South Korea for many years and often orders takeout. After returning to South Korea, I intuitively felt that the price of take-out fried chicken was much higher than that of China. Especially nowadays, ordering fried chicken in South Korea does have a certain financial burden.
In her view, South Korea’s “burning chicken inflation” is not a mere rise in food prices, but a result of the overlap of raw materials, labor costs and the structural costs of the platform economy.
Food and catering enter structural inflation channel
In fact, it is not just fried chicken, but other basic foods in South Korea, such as bread, rice, and ham, have also experienced varying degrees of price increases.
According to South Korea's official data, due to the rising food prices before Thanksgiving and Mid-Autumn Festival, the consumer price index (CPI) in September rose by 2.1%, compared with 1.7% in the previous month.
In recent months, South Korea's headline inflation rate has largely remained near the central bank's medium-term inflation target of 2%. But in September, prices of industrial products, including petroleum products and processed foods, rose 2.2% year-on-year, up from the 1.7% increase in August. Among them, processed food prices soared 4.2%, raising the overall inflation rate by 0.36 percentage points.
The Bank of Korea also pointed out earlier that food prices in South Korea are much higher than those in major countries. Despite the slowdown in inflation, high basic commodity prices are cited as the main factor driving up perceived inflation.
In Shin Zhishan's view, South Korea's overall inflation rate seems to be stable, but in fact it has entered a structural inflation channel in the food and catering sector. As a typical export-oriented economy, South Korea is extremely sensitive to fluctuations in food raw material prices and exchange rates. Geopolitical conflicts and the instability of global supply chains continue to push up import costs, which in turn are transmitted to the prices of food, energy and daily necessities, directly amplifying consumers' "somatosensory inflation".
Rising service prices drive "fried chicken inflation"
In addition to food prices, fixed expenditures such as labor costs and rents in South Korea's service industry have remained high for a long time, which also makes prices lack flexibility for downward adjustment.
South Korea’s statistics department data showed that South Korea’s service prices increased by 2.2% in September, increasing the CPI by 1.21 percentage points in the same month, with public service prices increasing by 1.2% in September, and private service prices increased by 2.9% in August (3.1%).
In an interview with China's new community, North-East Asian research expert Guo Lu said that agricultural products that should have had a rich harvest season and falling prices in autumn and winter, but were "prone to fall" due to the long-standing agricultural mechanism problems in South Korea.
South Korea, like Japan, also has a strong agricultural cooperation system, and generally adheres to the consumption philosophy of "indigenous" and advocates the priority of eating local produced foodstuffs.This idea, while safeguarding local agricultural interests, also causes market rejection of imported agricultural products, weakens the market regulation capacity of prices and further aggravates supply-side tensions.
This structural "semi-open" state leads to the inefficiency of South Korea's food supply system and the difficulty of price reduction. Service industries such as catering and take-out are highly dependent on local agricultural products, and their costs are highly rigid. The rise in food prices eventually directly pushes up the overall price level of the service industry.
On September 30, South Korean President Li Keqiang criticized the continued rise in food prices at a cabinet meeting, noting that these external factors do not fully explain the current high domestic food prices in South Korea, despite the continued weakness of the currency against the dollar and the global cost of raw materials.
Lee said that South Korea’s food prices are now more than 1.5 times higher than the OECD average, and that the price of basic foods such as sugar, flour and bread has risen by more than 30%. He asked the departments to analyze the structural problems in the distribution system in depth and correct them through institutional reforms.
How to Stop Chicken Inflation?
Analysts pointed out that if South Korea wants to fundamentally alleviate the structural price fluctuation of "fried chicken inflation", it must carry out institutionalized reforms in improving the transparency of market competition, reducing circulation costs and strengthening the bargaining power of small and medium-sized operators. This is not only an economic policy issue, but also related to the long-term sustainable development of Korean service industry.
Chang Luowen pointed out that since the park chung-hee era, the problem of eating has been regarded as the top priority of South Korea. In the past, the solution was "earning foreign exchange + importing" to stabilize the domestic cost of living. Now Li Zaiming's government is facing the same problem, but it is constrained by the interest groups of agricultural associations: if imports are liberalized, it will impact farmers' ticket warehouses; If the protection policy is maintained, it will be difficult for prices to drop.
Currently, a viable solution is to adopt a parallel strategy of gradual import and market-oriented reforms: gradually release some of the imports of agricultural products under the premise of ensuring a reasonable income for local farmers, and establish multiple supply channels, while introducing price transparency mechanisms and cost disclosure systems, so that, governments and consumers can clearly understand the structure of prices, thereby safeguarding the livelihood of the people and reducing the cost pressure on the service and catering industries.
The role of the South Korean government is gradually shifting from the industry leader of the past "developing country" period to the "regulatory country" that achieves fair competition through institutionalization and regulation.
She bluntly said that the fried chicken industry, which used to be dominated by self-employment, has now been oligarchically controlled by large chain enterprises. Large-scale chain enterprises implement "hidden price increases" and high advertising fees and franchise fees by reducing portions or replacing low-priced raw materials, which further increases the burden on consumers. Therefore, it is necessary for the Fair Trade Commission to strengthen the supervision of unfair transactions and price collusion between the headquarters and franchise stores, and establish a transparent cost disclosure system.
Secondly, the reform of the fee structure of takeout platforms is urgent. Although the South Korean government has launched the public takeout platform "ddangyo" to reduce the cost pressure on small and medium-sized merchants, this platform only ranks fourth in the market and has limited influence. In the future, a fair competition mechanism among platforms should be established, the legalization of the fee cap system should be promoted, and public options should be expanded through public distribution networks at the local government level.
Source: Guoshi Express
Author: The Star