Seoul Dairy to raise the price of regular milk by 3%, “Expect prices to be slightly under 3,000 won”

On August 29, the Seoul Dairy Cooperative’s Na 100% Milk products are on display at a major retailer in Seoul. Yonhap News

The price of milk will rise following the rise in raw milk prices. However, the consumer price of a liter of regular milk is not expected to exceed 3,000 won yet.

The Seoul Dairy Cooperative announced on August 29 that it would raise the factory price of Na 100% Milk (1ℓ), regular milk, for large retailers by 3% this coming October.

The latest decision comes after an earlier decision by the Korea Dairy Committee to raise the price of raw drinking milk by 88 won (8.8%) per liter in October. At the end of July, the Dairy Committee decided to raise the price of raw drinking milk (1ℓ) by 88 won to 1,084 won and the price of raw milk for processed dairy products (1ℓ), such as cheese, by 87 won to 887 won.

A representative of the Seoul Dairy Cooperative said, “Despite the challenging situation with the higher standard price of raw milk and the deteriorating domestic and overseas business environment, we decided to minimize the increase temporarily to help stabilize consumer prices.” He further said, “The consumer price is expected to reach close to 3,000 won.”

Immediately after the decision to raise the price of raw milk, experts predicted the price of a liter of regular milk in large supermarkets, currently around 2,800-2,900 won, to exceed 3,000 won. But the government met with dairy companies and asked them to refrain from an excessive price hike. Thus, it appears the Seoul Dairy Cooperative raised the factory price to a level that would not push consumer prices over 3,000 won.

Other dairy companies, such as Maeil Dairies and Namyang Dairy Products, are also contemplating higher prices. A representative of Maeil Dairies said, “We are discussing a minimum increase after considering the burden on consumers.”

Retailers also plan to minimize any increase in the price of regular milk. Nonghyup announced that it would sell a carton (900㎖ or 1ℓ) of regular milk for a price of 2,980 won or lower in its Hanaro Mart stores nationwide beginning October to steady consumer prices and to encourage the consumption of milk.

Wu Seong-tae, CEO of the Nonghyup Agribusiness Group, explained, “Nonghyup Hanaro Mart is a major distributor with over 11% of the total retail market share in milk,” and said, “We will limit the increase in the price of regular milk to minimize the burden on households and encourage the consumption of milk and play the proper role of an agricultural cooperative.”

Eyes are now on the impact the latest milk price hike might have on “milkflation,” where the rising price of milk leads to higher prices of products that use milk as an ingredient, such as bakeries and cookies.