Following price cuts in the bakery sector triggered by lower flour and sugar costs, attention is turning to whether similar reductions will spread to instant noodles and snacks.
Paris Baguette and Tous Les Jours, Korea's two largest bakery franchises, announced on March 26 they would lower prices on select breads and cakes. This marks the first time major franchises have cut prices since sugar and flour manufacturers reduced their prices by approximately 5% following a collusion investigation. The move drew market attention as it came after President Lee Jae-myung directly addressed inflation concerns.
Signs suggest this trend may extend to the instant noodle industry. An Ottogi official said, "A price increase for instant noodles has not been finalized," adding, "We are internally reviewing what level of price reduction might be possible." This marks the first time an individual noodle maker has publicly mentioned potential price cuts since the recent flour price reductions.
However, whether this will spread industry-wide remains uncertain. Industry leader Nongshim, along with Samyang Foods and Paldo, is maintaining a cautious stance. Nongshim stated, "There are many variables to consider, including price fluctuations by raw material category, international oil prices, and exchange rates." Paldo also said it "agrees with the government's price stabilization stance" while "considering ways to ease consumer burden."
Instant noodle makers explain that flour accounts for only a small portion of production costs even if prices fall. They also emphasize that other cost pressures, including palm oil prices and exchange rate increases, remain high. Nongshim, Ottogi, and Paldo all raised instant noodle prices in March last year.
There is precedent for government-pressured price cuts: instant noodle prices were lowered once in 2023. Then-Deputy Prime Minister and Finance Minister Choo Kyung-ho cited falling international wheat prices and called for reductions. Nongshim, Ottogi, Samyang Foods, and Paldo subsequently lowered their prices.
Instant noodle prices have been publicly mentioned under the current administration as well. After taking office in June last year, President Lee drew attention by asking, "I heard a single pack of instant noodles costs 2,000 won—is that true?" President Lee later pointed to the gap between raw material costs and consumer prices at senior staff meetings, noting that domestic bread prices are high due to flour and sugar costs. He also emphasized that the effects of lower sugar prices should be reflected in consumer prices.
The confectionery industry is also closely monitoring the situation. Orion and Lotte Wellfood have not issued official statements on potential price cuts. An official at one confectionery company said, "Flour and sugar do not account for an overwhelming share of costs," adding, "Considering profitability, price cuts are not easy."
The government continues dialogue with industry. The Ministry of Agriculture, Food and Rural Affairs plans to hold a meeting on price stabilization with cooking oil companies including CJ CheilJedang, Daesang, Ottogi, and Sajo Daerim on April 4.