Korea strong-arms retailers in war against inflation

By Korea Herald
  • Published : Mar 7, 2013 - 20:32
  • Updated : Mar 7, 2013 - 20:32
The government summoned executives from three major discount franchises on Thursday to discuss how to improve the distribution system and stabilize prices of manufactured goods.

Executives of E-mart, Homeplus and Lotte Mart met with officials at the Ministry of Knowledge Economy at a time when the public is voicing concerns over rising gasoline prices and public utility fees.

“We asked the retailers about the factors affecting the pricing of manufactured goods such as the distribution system and production costs, and requested them to refrain from raising prices,” said ministry spokesman Kwon Pyung-oh.

President Park Geun-hye last week emphasized her determination to stabilize prices of daily necessities including processed foods during her first meeting with top aides.

Related ministries then held a meeting last Thursday, and will continue to meet every week to monitor consumer prices. They announced an aim to keep yearly inflation in the 2 percent range like in advanced economies.

Last year, Korea’s consumer price index inched up 2.2 percent, but food prices surged 4 percent.

The government said it would try to keep prices of daily necessities under control by simplifying the distribution process for agricultural produce, increasing reserves and import volumes, and introducing more low-priced mobile handsets.

These measures, however, were tried under the Lee Myung-bak administration, which is widely believed to have failed in stabilizing daily living costs.

Nevertheless, retailers and even convenience stores are hurriedly following up on the government’s price-control initiative.

Confectionery company SPC, which had raised the prices of unprofitable products last month, reversed its decision in less than two weeks.

E-mart, which had 2,200 items on sale last week, put more than 1,600 fresh food items such as beef and vegetables on sale for up to 65 percent off, from Thursday through next Wednesday.

CJ CheilJedang lowered the factory prices of white sugar by up to 6 percent earlier this week.

BGF Retail’s convenience store chain CU said Monday it cut prices of several food items such as ramen and milk to discount store levels.

GS25 holds “buy one, get one free” monthly events for 300-400 select items. This month’s items include processed milk, ramen and snacks.

7-Eleven has put milk on sale for an average of 21.6 percent off.

By Kim So-hyun (