Driving discounts: Major South Korea retailers urged to cooperate with government to stabilise food prices

By Pearly Neo contact

- Last updated on GMT

Five of South Korea’s biggest retail chains have been urged to cooperate with the government in efforts to stabilise local food prices. ©Getty Images
Five of South Korea’s biggest retail chains have been urged to cooperate with the government in efforts to stabilise local food prices. ©Getty Images

Related tags: South korea, Retailers, Food prices

Five of South Korea’s biggest retail chains have been urged to cooperate with the government in efforts to stabilise local food prices, with the nation’s biggest festival Chuseok around the corner.

Chuseok takes place on the 15th​ day of August in the lunar calendar, which for 2022 falls on September 10, and is a harvest festival often referred to as the Korean Thanksgiving, and widely considered to be the biggest festival in the country.

The significance of Chuseok has often led to food price instabilities in past years as many families tend to purchase even more food than usual to cook up large-scale family banquets as well as to prepare for many businesses being closed for at least three days, so the government has roped in major South Korean retailers to help with price stabilisation efforts this year.

According to government data, five major retail chains have been included in this discussion including E-Mart, Lotte Mart, Hanaro Mart, Home Plus and GS Retail.

“Price stability is of paramount importance ahead of the Chuseok holiday, and the government is preparing measures [to ensure that the] supply and demand of various items demanded by consumers during Chuseok holiday [remain affordable and available] this month],”​ Ministry of Agriculture, Food and Rural Affairs (MAFRA) Food Industry Policy Office Head Kwon Jae-han said during the meeting.

“As such, this office is prepared to cooperate so that large retailers can take a proactive response [to making food products] affordable for consumers.”

Kwon also elaborated on the various initiatives already in place to help with food prices, such as business discount coupons on livestock, quota tariffs, and value-added tax (VAT) exemption for basic processed food products.

“All retailers are urged to actively promote your respective discount events as well so that these will actually make a difference for consumers,”​ he added.

“We expect price reductions [on the industry end] to be reflected effectively in prices reaching consumers as well, [especially for meat and processed foods] as the tariff quotas and exemptions have been put in place. The cooperation of all retailers is strongly urged.”

That said, it does appear that the retailers have some demands of their own, with a sector spokesperson having requested for the government to both expand its support with regards to providing discounts for agricultural and livestock related products.

“This move will allow us to further reduce the burden on consumers when it comes to product pricing,”​ he said.

“It is also important for us to have more information regarding the supply and demand status of major agricultural and livestock products [to better gauge the situation], and we request the government to provide more transparency on this.”

Imported product management

MAFRA also recently announced that it would be implementing a digitally-driven management system to monitor the distribution history of selected imported agricultural products starting August 2022.

This management system obligates distributors to report the transaction details of specific imported agricultural items with the aim of preventing illegal trade and distribution, particularly concerning geographical adulteration of the products’ country of origin.

The system currently monitors 18 items: Frozen red peppers, dried red peppers, kimchi, red beans, soybeans, sesame powder, peanut, bellflower, wild celery, rehmannia, astragalus , peony, frozen garlic, onion and as of August 2022 four new items include garlic, ginger, jujubes, and shiitake mushrooms.

“There has been a recent increase in food imports, and we have designated four additional new items that pose high risk of harming fair trade due to a high probability of illegal distribution, e.g. adulteration of country of origin,”​ said MAFRA.

“This management system and the reporting is expected to strengthen consumer safety management, including agri-food fair trade as well as the prompt traceability and recovery of any necessary samples in the event of a food safety incident.”

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