Photo: Finance Minister Chu Gyeong-ho attacked the rise in instant ramen prices on a television interview. Credit: KBS News.
For a supposed economic libertarian who often cited Milton Friedman and Ludwig von Mises as his chief inspirations during his presidential campaign, Yoon Suk-yeol 윤석열 has not been shy about issuing decrees to the market. Yoon previously intervened over rising heating bills during the winter, as well as the appointment of new chief executive officers for banks. (See previous coverage, “Yoon’s Visible Hand in the Economy.”)
This time, the Yoon administration intervened in food prices with a heavy-handedness that Pyongyang 평양 would have approved of. In a June 18 interview, Minister of Strategy and Finance Chu Gyeong-ho 추경호 기획재정부 장관 called on makers of instant ramen - a key pantry item in any South Korean kitchen - to lower their prices to reflect a substantial decline in the price of wheat following a spike caused by uncertainties surrounding the war in Ukraine.
Flour-milling companies such as CJ CheilJedang CJ제일제당 and Daehan Flour Mills Co. 대한제분 objected that there is a four- to eight-month lag between a fall in grain prices and a resultant drop in their production costs. Meanwhile, the prices of other key manufacturing inputs, such as shipping and energy, have continued to rise. On June 26, the Ministry of Agriculture, Food and Rural Affairs 농림축산식품부 summoned representatives of South Korea’s seven largest flour mills and threatened an antitrust investigation if the price of flour did not fall.
After the flour mills acquiesced, the government used the lowered price of flour as leverage over ramen makers, who also bowed to the pressure. Nongshim 농심, maker of Shin Ramyun 신라면, South Korea’s best-selling instant ramen, said it would lower prices by 4.5% as of July 1, marking the first time since 2010 that South Korea’s ramen makers have lowered prices.