Controversy Over the Effectiveness of the 'Dining Price Disclosure System'... "Price Adjustment Should Be Left to the Market"

The scene of the restaurant district in Myeongdong, Seoul, on the 6th of last month. Photo by Yonhap News

[Asia Economy Reporters Moon Hyewon, Jeon Jinyoung] The restaurant industry is strongly opposing the government's 'Restaurant Price Disclosure System,' complaining that the government is shifting the responsibility for rising prices onto the industry. Experts also argue that prices should be left to the market, stating that government intervention is excessive.

Kim Sang-sik, Head of Policy and Business at the Korea Franchise Association, said on the 1st, "Price increases are inevitable due to rising delivery fees, minimum wage hikes, and soaring raw material costs," adding, "The government's disclosure could unintentionally create a perception among consumers that brands raising prices are bad. The industry may feel this is not 'cooperation' but 'coercion.'"

Experts also point out that the government has overstepped. Oh Se-jo, Professor Emeritus of Business Administration at Yonsei University, said, "Price increases or decreases are corporate strategies and should be left to market competition," emphasizing, "Forcing companies to disclose price hikes is an excessive measure that undermines corporate autonomy."

Seo Yong-gu, Professor of Business Administration at Sookmyung Women's University, also raised his voice, saying, "Price adjustments should be made by the market, but the government has intervened excessively." Professor Seo questioned, "Why should only the restaurant franchise industry be regulated? They should not be targeted just because they are operated by companies." He added, "Ultimately, this decision fails to consider the restaurant industry's environment, which faces supply chain issues like logistics crises and rising food material prices," criticizing the government for overreaching.

However, some consumers view the policy positively. Kwak Geum-ju, Professor of Psychology at Seoul National University, said, "From a consumer's perspective, if the price suddenly rises at a favorite restaurant, it can cause feelings of 'betrayal' or 'resentment.' Especially in tough economic times like now, when incomes are already low, repeated price increases make consumers more sensitive, leading to feelings of disappointment or anger." She added, "In such cases, when the government introduces such policies, consumers may initially feel relieved and experience a kind of catharsis."

Meanwhile, since the 23rd of last month, the government has been implementing the 'Restaurant Price Disclosure System,' which publicly announces weekly the prices and rate changes of 12 restaurant franchise items, including porridge, gimbap, hamburgers, chicken, tteokbokki, pizza, coffee, and jajangmyeon. The system selects the top 10 brands by number of stores handling these items and discloses the prices of their main menu items.

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