Government Pressure Pushes CJ to Cut Flour Prices Again... Bread Prices Also Fall Across the Board (Comprehensive)

The government's pressure to stabilize prices is spreading from the sugar and flour milling industries to the bakery industry. As CJ CheilJedang has decided to further cut flour prices, bakery franchises have also begun lowering bread prices. It is drawing attention as the first case in which cuts in raw material prices are being passed on to final consumer prices.

On the 26th, CJ CheilJedang announced that it would implement an additional average 5% reduction in the prices of its flour products. This follows its move early last month to cut prices of products for business use by an average of 4%, and early this month to reduce prices of products for consumers by 5.5%. With prices lowered twice in the span of a month, the industry is calling the move "unusual."

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A company representative said, "Although business conditions are difficult, we decided to do this to actively support the government's policy stance on price stability," adding, "We will strive to ease the burden on our clients and consumers."

This additional price cut came after strong remarks from the Korea Fair Trade Commission. On the 23rd, Joo Byungki, a commissioner at the Fair Trade Commission, stressed during a report to the National Assembly's National Policy Committee that, regarding the milling industry's 5% price cut, "Prices should be lowered by at least around 10%." He indicated that the scale of the reduction was not sufficient, given that consumers had suffered damage due to price collusion. He also added that the possibility of issuing a price redetermination order would be "actively reviewed."

Previously, sugar and flour companies such as CJ CheilJedang, Samyang Corporation, Daehan Flour Mills, and Sajo DongA One cut sugar and flour prices by around 5% following a collusion investigation. Within the industry, there are projections that rival companies are also highly likely to move toward additional price cuts.

Bread is displayed at a Paris Baguette store in Seoul. Kang Jinhyeong, Reporter

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The government's drive for price stability has now spread from sugar and flour milling to the bakery sector. Paris Baguette and Tous Les Jours both announced bread price cuts on the same day. This came just two days after President Lee Jaemyung stated that the benefits of sugar and flour price reductions should be passed on to consumers.

Paris Baguette will lower prices on 11 types of bread and cakes starting March 13. Six types of bread will be reduced by between 100 won and up to 1,000 won based on the recommended retail price of finished products. Red bean bread, streusel bread, and cream puff bread will each be reduced from 1,600 won to 1,500 won, a cut of 100 won (6.2%). Whole Grain Oat Bread will go from 4,200 won to 3,990 won, down 210 won (5.0%), and the three-piece Castella will be adjusted from 3,500 won to 2,990 won, a reduction of 410 won (14.6%). French Bousse will drop from 2,500 won to 1,500 won, a cut of 1,000 won (40%), marking the largest reduction.

Prices for five popular character cakes will also be lowered. The Huntrix Golden Cake will be reduced from 39,000 won to 29,000 won, a cut of 10,000 won (25.6%), and the Soda Pop Cake will be reduced from 33,000 won to 25,000 won, a cut of 8,000 won (24.2%). The company explained that by sharply lowering prices in the high-priced product range, it aims to increase consumers' sense of real savings. In addition, it plans to launch a "value-for-money croissant" priced at 1,000 won sometime in March.

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Tous Les Jours will reduce the supply prices of 17 types of bread and cakes by an average of 8.2%. Starting March 12, the recommended retail prices of 16 items, including red bean bread, Magu Magu Chestnut Bread, and Fresh Fresh Cream Bread, will be cut by between 100 won and 1,100 won. The popular character cake "Latso Very Good Day" will be reduced by 10,000 won.

A Paris Baguette representative said, "Despite difficulties caused by ongoing cost increases, we decided to lower prices to ease the burden on consumers and to participate in stabilizing prices."

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