January 12, 2012

Amid suspicions that meat's prices remain unusually high due to the industry's distorted distribution structure, South Korea's antitrust watchdog will announce its investigation results into the overall distribution system for beef next week, it said Wednesday (Jan 11).

The investigation is currently under way and its results will include prices and profit margins at each stage of the distribution system from slaughtering to retail sale, according to the Fair Trade Commission (FTC).

The move comes as prices of cows sold by livestock farmers have been plummeting but beef prices remain quite high, spawning speculation that middlemen are taking excessive profits in the process of bringing the meat to consumers.

The average price of cows plunged more than 20% at the end of last year from a year earlier, industry data showed.

The farmers are blaming what they call the country's "abnormal" distribution system where too many middlemen make too much profit, keeping consumer prices up despite such a plunge in cattle prices.

There are currently about 2.95 million head of cattle in the country.

The agriculture ministry earlier said that the proper number of cattle for South Korea is about 2.5 million.

The FTC said that it will work hard to provide necessary information to consumers for encouraging "reasonable" transactions and consumption of products in the market.

"We will continue to induce reasonable transactions and consumption by offering necessary information to consumers in the areas where distribution system remains distorted or other illegalities are taking place such as cartel activity and inappropriate product display and advertisement," FTC Chairman Kim Dong-soo told reporters.