"Seoul Milk Raises Convenience Store Price Despite Promise Not to Exceed 3,000 Won for White Milk"

3% Increase for Large Discount Stores, 4.9%↑ for Small Shops
Controversy Over Differential Supply Prices by Distribution Channel 'Trick'
"Considering Sales Volume, Number of Products, and Other Costs"

Seoul Milk Cooperative has decided to raise the price of its 1ℓ white milk product supplied to convenience stores by 4.9% starting next month, sparking controversy over alleged loopholes. While large discount stores set their price increase rates at around 3% in response to the government's price stabilization request, smaller distribution channels have been assigned higher increases. Although Seoul Milk appears to be cooperating with the government's request, criticism arises that it is shifting the burden by applying different increase rates depending on the supply channel. The dairy industry argues that it is difficult to set a uniform increase rate considering sales volume and delivery costs for each distribution channel.

A customer is selecting a product at the milk section of a large supermarket in Seoul.

Convenience Store Supply Price Increased by up to 28%

According to industry sources on the 12th, Seoul Milk recently sent official letters to convenience stores announcing a price increase for its dairy products starting from the 1st of next month. The price increase rates for major products range from approximately 5% to 28%.

Specifically, the price of the 1ℓ white milk product "Na100% Milk" will rise from 3,050 won to 3,200 won, a 4.9% increase. The price increases for other sizes of white milk products supplied to convenience stores are much higher. The 200㎖ product price will increase from 1,100 won to 1,200 won, a 9.1% rise, and the 1.8ℓ product price will go up from 5,550 won to 6,200 won, an 11.7% increase. For processed milk, the 300㎖ product price will increase from 1,800 won to 2,000 won, an 11.1% rise, and the yogurt "Biyotte" will increase from 1,800 won to 2,300 won, a 27.8% increase.

The most controversial part of the price increase proposal is the rise in the 1ℓ white milk product, which consumers purchase the most. Earlier, Seoul Milk announced on the 29th of last month that it would raise the supply price of the 1ℓ Na100% Milk supplied to large discount stores by about 3%. The current product price, which is in the high 2,800 won range, was minimally increased to 2,980 won to keep it below 3,000 won. In contrast, the supply price to smaller stores such as convenience stores is about 2 percentage points higher in increase rate.

A Seoul Milk official stated, "We specified that the price increase rate for the 1ℓ white milk supply price was set at around 3% based on large discount stores, but it seems to have been perceived as applying uniformly to all distribution channels. Large discount stores operate on a structure that allows for low margin and high volume sales, whereas smaller stores have fewer products and volumes and higher logistics, labor, and cost considerations, so we have no choice but to set higher prices." Other dairy companies echoed this, saying, "It is an inevitable structure to set different supply prices for each distribution channel."

Competitors Also Deliberating on Price Increase Rates

Seoul Milk also needs to set supply prices for corporate supermarkets (SSMs), which fall between large marts and small stores. Additionally, other dairy companies such as Maeil Dairies and Namyang Dairy Products must determine their supply prices to be applied from the 1st of next month. These companies said, "We are currently reviewing the supply price increase rates internally" and "We will reach a conclusion soon."

Dairy companies are struggling due to the increase in raw milk prices, which form the basis of milk product prices, and the government's repeated drive to curb food industry price hikes. Earlier, the dairy and dairy processing industries finalized the "Basic Raw Milk Price Increase by Usage" in July. The basic raw milk price for drinking milk was set at 1,084 won per liter, up 88 won (8.8%), and the basic raw milk price for processed milk was set at 887 won per liter, up 87 won (10.9%).

An industry official said, "The government's strong determination to minimize price burdens means that for products with high consumption, we are continuing to review setting supply prices at levels lower than the raw milk price increase." Accordingly, other competitors are expected to set prices by distribution channel within a similar range of increase rates as those set by Seoul Milk, based on white milk.

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