KFC Korea rebels against price pressure

Despite rival chicken franchises lowering prices amid pressure from the government, KFC Korea is bucking the trend and standing firm with its menu pricing.

With the recent establishment the Fair Trade Commission headed by newly appointed former professor of trade Kim Sang-Jo, the chicken industry has seen many South Korean franchises such as BBQ and KyoChon retract plans to increase prices, in fear of criticism and more regulation, reports Korea Bizwire

BHC Chicken, the second largest franchise in the South Korean fried chicken industry, also announced plans to sell its items at reduced prices until July 15, in light of the newly established Fair Trade Commission.

But US-headquartered fried chicken chain KFC is refusing to back down after it raised prices this month.

From June, the price of KFC’s Zinger Burger meal went up by 7.3 per cent, to 5900 won (US$5.16), while the price of a Tower Burger meal went from 6300 won to 6900 won.

The price of a hot crispy chicken bucket also increased by 5 per cent, from 17,500 won to 18,400 won.

Korea Bizwire reports that critics accuse KFC of being sly with price increases, as they argue industry rivals such as BBQ and KyoChon made their price changes clear to the public by promoting the changes through the media.

However, KFC disputes the claim, with one official saying: “We are in a different situation compared to other chicken franchises as we implemented discounts of up to 18 per cent last July. Considering the fact that our prices have been stable for a long time despite a number of factors, we have no plan to lower the prices of our products.”

Currently, there are over 210 KFC Korea stores, all run directly by KG Group in partnership with KFC.

Some industry experts say that certain brands from powerful countries including the US and the EU are not as afraid of regulations as other South Korean rivals, due to the political and diplomatic leverage of their native country they can bank on.

When asked about the retraction of price increases by chicken franchises, however, the newly appointed leader of the Fair Trade Commission, Kim Sang-Jo, clarified the authority of the government branch on Monday, saying: “The Fair Trade Commission doesn’t have the right to intervene in price determination if there is no sign of market abuse or collusion.”

 

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