Hanwoo beef prices at restaurants in Korea surge on higher labor, fuel costs
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The average prices of 150 grams of Hanwoo sirloin and tenderloin are 65,299 won ($50) and 66,904 won, respectively, according to a survey earlier this month by price research agency Korea Price Information of 15 major Hanwoo restaurants in Seoul commissioned by Maeil Business Newspaper. The price for a serving of Hanwoo sirloin was 58,511 won on average in the first quarter of last year. This is the first time that the sirloin price exceeded 60,000 won.
Prices of sirloin and tenderloin increased by an average of 28.6 percent and 34.8 percent, respectively, from three years ago. At some restaurants, such as Yukdeok Fillet and Samwon Garden in the affluent Gangnam District in southern Seoul, sirloin is priced at more than 80,000 won and tenderloin more than 90,000 won per 150 grams for one person.
Most of the restaurants surveyed use 150 grams for the weight per serving, and there were not a few places where the weight was 100 grams or 120 grams. For adult men, one serving is often not enough, so if they eat two servings, the price exceeds 100,000 won.
In contrast, wholesale prices of Hanwoo fell by 12 percent based on the 1++ grade and by 20 percent based on the 1+ grade from three years ago. Since Hanwoo wholesale is traded per head, it is not possible to know the wholesale prices for specific parts, such as sirloin and tenderloin. The price for a serving of Hanwoo sirloin at large supermarkets is around 20,000 won, about one-third of the average restaurant price of 60,000 won.
Restaurants say that their price hikes are inevitable due to rising labor, energy and food material costs. The recent drop in the wholesale prices, meanwhile, is due to a significant increase in supply. As the Korean government provided financial support to households in the wake of the Covid-19 breakout in 2020, Hanwoo consumption increased rapidly as did the number of cattle raised by livestock farmers. As of the end of last year, the number of Hanwoo raised at local farms increased to 3.55 million and the decline in wholesale prices is expected to continue for the time being as Hanwoo consumption is falling due to an economic downturn.
Hanwoo farmers and experts say that retail and restaurant selling prices for Hanwoo should be lowered to increase consumption, adding that the price hikes in some beef restaurants are excessive.
“If restaurants raise prices excessively and people stop visiting restaurants, more restaurants will be closed,” said Lee Eun-hee, a professor of consumer studies at Inha University. “It is necessary for restaurant owners to make consumers come to restaurants even if they make small profits.”
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