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Big retailers blamed for high beef prices in Korea

Beef Central, 20/01/2012

Excessive profits by department stores and supermarket chains have been cited as the main reason why hanwoo meat remains expensive in South Korea despite a plunge in homebred cattle prices.

A survey by the Consumer Union of Korea found that department stores and large discount chains increased the prices of the top grade 1++ hanwoo by up to 12 percent last year, while the wholesale price dropped 23 percent during the same period, the Korea Herald reports today.

The consumer group, with the support of the Fair Trade Commission, surveyed hanwoo prices at 511 distributors and 130 restaurants in 11 cities in recent weeks.

Its report said major retailers were charging almost double the prices of smaller vendors.

Lotte Department Store, the nation’s No. 1 retailer, sold hanwoo at the highest prices at 11,058 on average, followed by Shinsegae with 10,058 won and Hyundai with 9,657 won.

Of the total 130 barbeque restaurants surveyed, only 12, or 9.2 percent, lowered the price of galbi and sirloin items over the past six months, while nine increased the price and others maintained the same.

The report said some retailers and restaurants attributed the pricing discrepancies to differences in the quality and nutrition of beef even among the same grade hanwoo.

However the consumer group said there should be no quality difference in the same grade hanwoo, as it is all graded in the butchering process.

“Even considering additional charges, we cannot understand that their prices at major retailers more than double those of other vendors,” said Kang Jung-wha, the head of the consumer union.

“If the grade is same, there is no quality difference regardless where they are sold,” she said.

Beef cattle prices have fallen sharply in Korea in the past year, with the Government attributing the decline to an oversupply of locally produced Hanwoo cattle. Korean farmers have taken to the streets to protest the low prices they are receiving, with rising beef imports a target of their anger. 

The ministries of agriculture, home affairs and the nation’s antitrust watchdog are reviewing ways to simplify the five-stage distribution system to three stages to benefit both cattle breeders and consumers.
 

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