[Exclusive] Ice Cream, Ramen, Cola, and Hamburger Prices All Increased at the Start of the New Year (Comprehensive)

Haagen-Dazs Raises Ice Cream Prices by 14% Since Early Year
Nongshim, Lotteria, Burger King, Coca-Cola Follow with Price Hikes
Price Increases Expected to Surge Until March This Year... Breakthrough for Profit Decline

[Asia Economy Reporter Lee Seon-ae] Food prices have been rising one after another since the beginning of the new year. Food companies cite rising labor costs and raw material expenses as reasons for the price hikes. Although there is criticism that price increases are a habitual practice repeated every year at the end and beginning of the year, companies argue that it is unavoidable to recover the sharply decreased profit margins from last year. Moreover, this year, price increases are expected to surge even more than last year, which will likely increase the burden of grocery prices that consumers directly feel.

According to the industry on the 2nd, H?agen-Dazs raised the prices of ice cream sold at stores, convenience stores, and large supermarkets starting from the 1st. The price of H?agen-Dazs mini increased by 14.3%, from 4,200 won to 4,800 won, and the pint rose by 14.2%, from 11,300 won to 12,900 won. H?agen-Dazs cited the rise in the main ingredients of ice cream and domestic and international inflation leading to increased packaging and transportation costs as the reasons for the price hike. Nongshim raised the ex-factory prices of Dongji Naengmyeon and Saengsaeng Udon by 12.1% and 9.9%, respectively, starting from the 27th of last month. Retail prices increased by about 200 won. A Nongshim official explained, "Due to the continuous rise in manufacturing costs and selling and administrative expenses, the price increase was inevitable."

On the same day, Coca-Cola Beverage also raised the ex-factory prices of 11 items by an average of 5.8%. The price increase rates for major items were 4.8% for the 250ml can and 500ml PET bottle of Coca-Cola, 5.0% for the 1.5L product, and 5.2% for Canada Dry. Hamburger prices also rose simultaneously. Lotteria raised prices by 100 to 500 won for 13 types of burgers, 6 types of desserts, 2 types of drinks, and 5 types of chicken starting from the 19th of last month. Burger King increased prices by 100 to 300 won for 20 types of burgers including Whoppers, 6 side menus, and 1 drink, and KFC raised prices of major products by 100 to 200 won each.

Companies unanimously agree that price increases are inevitable because at the turn of the year, factors such as raw materials and the minimum wage rise increase the reasons for price hikes. This year’s minimum wage is 8,590 won, up 2.9% from last year. Although this is lower than the 16.4% increase in 2018 and 10.9% in 2019, it still poses a burden for companies. However, criticism of the 'habitual' nature of price hikes is strong because price increases are concentrated every year at the end and beginning of the year when consumption rises and attention shifts elsewhere. In fact, at the end and beginning of last year, most food and beverage companies such as Nongshim, Angel-in-us, Lotteria, Seoul Milk, Namyang Dairy Products, and Lotte Confectionery implemented price increases.

Housewife Lee Ji-seon (35) said, "The phenomenon of prices rising all at once when consumption is active at the end and beginning of the year is a sneaky price hike," adding, "Considering that this year’s minimum wage increase rate is 2.9%, the lowest since 2.8% in 2010, the explanation for price hikes exceeding 10% is insufficient."

This year, the outlook is that food price increases will be more rampant than last year. This is based on the judgment that major food companies’ performance deteriorated last year, making profitability improvement through price hikes inevitable. A food industry official said, "Although criticized every year for sneaky price hikes, it is relatively less burdensome to raise prices at the end and beginning of the year than throughout the year," adding, "If leading companies raise prices, competitors follow suit, and this trend is expected to continue until March this year."

This content was produced with the assistance of AI translation services.