May 20, 2008

Retail mark-up cause of high beef prices in South Korea

Middlemen and retailers are chiefly responsible for the rise in beef prices in South Korea, according to a recent report by the Korean Agro-Fisheries Trade Corp., a semi-government organization.

A report in the Korea Times says that beef cattle that is sold for 5 million won or US$5,000, could rise by 3 million won to 8 million won when it is broken down into cuts and processed.

The Korea Times says the Korean Agro-Fisheries Trade Corp report cites a rancher in Hoengseong, Gangwon Province, the area famed for the best Korean beef, who sells his 'subprime' 650kg cow for 5.26 million won.

The collectors sell it to meatpackers, adding 340,000 won to the bill as fees for slaughtering, transportation and refrigeration plus margins.

Retailers, however, add 1 million won for rent and personnel expenses and add another 1.67 million won for profit margins.

By the time Korean consumers buy the beef in the supermarket, the final cost of the cow has risen to 8 million won.

The newspaper said.