Hamburger franchises are raising prices even as key ingredient costs for flour and sugar continue to decline, creating a stark contrast in the food industry.
While the government pressures companies to stabilize prices and the effects of lower raw material costs flow through to bakery products, burger chains are maintaining price increases, citing high exchange rates and rising labor costs. Industry players attribute this to differences in cost structures and component ratios, but critics note a significant gap with consumer price perceptions.
According to food industry sources on the 28th, CJ CheilJedang announced on the 26th an additional average 5% reduction in flour prices for both commercial (B2B) and consumer (B2C) products. This follows previous cuts averaging 4% for commercial flour and 5.5% for consumer flour. CJ CheilJedang's flour prices have now declined in stages since the beginning of the year. Samyang Corporation, Sajo Dongaone, and Daehan Flour Mills have also reduced flour prices by an average of 4-6%.
The moves are seen as a response to the Fair Trade Commission's recent investigation into alleged price-fixing among flour, sugar, and starch syrup producers. FTC Chairman Joo Byung-ki said at the National Assembly on the 23rd that "a reduction of at least 10% seems reasonable" for flour prices amid the collusion allegations. CJ CheilJedang is under FTC investigation for alleged flour price-fixing along with Daehan Flour Mills and Samyang Corporation.
Price reductions have also spread to the starch syrup market. Daesang lowered prices on major products including oligosaccharides and corn syrup by an average of 3-5%, while Sajo CPK cut prices on starch, corn syrup, and fructose by 3-5%. The reductions apply across all distribution channels including end users, distributors, and both commercial and consumer segments. The FTC is also reportedly examining collusion allegations against major starch syrup market players including Daesang, Samyang, Sajo CPK, and CJ CheilJedang.
As raw material prices fell successively, bakery franchises have also adjusted prices. Paris Baguette will reduce prices on 11 items including bread and cakes starting June 13. Red bean bread, streusel bread, and cream puffs will drop from 1,600 won to 1,500 won, while whole grain oat bread will fall from 4,200 won to 3,990 won. Three-slice castella will decrease from 3,500 won to 2,990 won, and French busset from 2,500 won to 1,500 won. Tous Les Jours will also cut supply prices on 17 bread and cake items by an average of 8.2%. Recommended retail prices for 16 items including red bean bread, chestnut bread, and fresh cream bread will drop by 100-1,100 won, while the character cake "Lasso Berry Good Day" will be reduced by 10,000 won. This marks the first time major bakery franchises have lowered prices following the flour price cuts.
Analysts say these measures are closely linked to the government's strong pressure for price stabilization. President Lee Jae-myung recently emphasized that the benefits of lower raw material costs for items like sugar should be passed on to consumers. The FTC has also indicated it will actively consider enforcement measures including price re-determination orders.
In contrast, hamburger chains continue raising prices. Mom's Touch will increase prices on 43 items (single items) by an average of 2.8% starting June 1. The Cyburger single will rise from 4,900 won to 5,200 won, and the Fried Big Cy Boneless Chicken from 11,900 won to 12,900 won. Cajun rice cake snacks and carbonated beverages will also increase by 100-300 won each. McDonald's Korea raised prices on hamburgers, beverages, and side menus by 100-400 won starting May 20. The Big Mac single increased by 200 won to 5,700 won, while the Bulgogi Burger rose from 3,600 won to 3,800 won. Burger King also raised single burger prices by approximately 200 won and side menus including snacks and desserts by about 100 won each.
The hamburger industry cites rising costs for imported beef patties, buns, and vegetables, along with high exchange rates, cooking oil prices, and fixed costs such as labor and rent. Deteriorating profitability among franchisees is also cited as a factor driving price adjustments.
However, consumer burden is growing as burger prices rise while flour and sugar costs decline. According to the Korean Statistical Information Service, hamburger price inflation has exceeded 35% since 2020, significantly outpacing overall dining-out inflation of approximately 25%. Critics note that while raw material price cuts have been partially reflected in bakery products, they have not been sufficiently passed through to hamburgers, a staple of the dining-out sector.
"It's true that flour prices have come down somewhat, but they represent a limited portion of burger costs," said an industry official. "Considering the complex cost structure including imported meat, exchange rates, and labor costs, it's difficult to lower prices in the short term."