Lotte hanwoo prices highest among department stores

Excessive profits by department stores and supermarket chains were cited as the main reason why hanwoo meat remains expensive despite a plunge in homebred cattle prices, a survey found Thursday.

According to the Consumer Union of Korea, department stores and large discount chains increased the prices of the top grade 1++ hanwoo by up to 12 percent last year, while the wholesale price dropped 23 percent during the same period.

The beef prices at major retailers almost doubled the prices of smaller vendors, said the consumer advocacy group that surveyed hanwoo prices at 511 distributors and 130 restaurants in 11 cities in recent weeks, sponsored by the Fair Trade Commission.

The prices of the top hanwoo meat graded 1++, 1+ and 1 dropped 20.4 to 22.7 percent in January, compared to October 2010 when the outbreak of foot-and-mouth disease hit local farms hard.

During the same period, however, the consumer prices of the premium beef decreased 6 to 15.6 percent.

In case of the best 1++ hanwoo, the wholesale price per 100 grams dropped 22.7 percent from 2,079 won to 1,607 won ($1.83-1.41), while the consumer price saw only a six percent decrease from 9,074 to 8,526.

“The top three grade hanwoo that is favored by consumers showed a smaller decrease in prices,” said the group.

Lotte Department Store, the nation’s No. 1 retailer, sold hanwoo at the highest prices at 11,058 on average, followed by Shinsegae with 10,058 won and Hyundai with 9,657 won.

Among large discount stores, Homeplus, the second-largest chain store owned by U.K.’s Tesco, sold the most expensive hanwoo at 9,167 won while the price was 6,971 won at E-Mart and 7,923 won at Lotte Mart.

Of the total 130 barbeque restaurants surveyed, only 12, or 9.2 percent, lowered the price of galbi and sirloin items over the past six months, while nine increased the price and others maintained the same.

Some retailers and restaurants complained that the quality and nutrition of beef could be different even among the same grade hanwoo.

The consumer group, however, made it clear that there should be no quality difference in the same grade hanwoo as all the hanwoo traded here is graded in the butchering process.

“Even considering additional charges, we cannot understand that their prices at major retailers more than double those of other vendors,” said Kang Jung-wha, the head of the consumer union.

“If the grade is same, there is no quality difference regardless where they are sold,” she said.

Beef cattle prices have fallen sharply as a result of an oversupply of cows raised here over the past two years, weighing heavily on cattle breeders.

The ministries of agriculture, home affairs and the nation’s antitrust watchdog are reviewing ways to simplify the five-stage distribution system to three stages to benefit both cattle breeders and consumers. (2012-01-19)