S. Korea Begins Full Probe Into Beef Pricing

SOUTH KOREA - South Korea has launched a full-scale investigation into its complicated beef distribution system that's under fire for leading to unusually expensive meat despite plunging cattle prices, the farm minister said Monday.
calendar icon 16 January 2012
clock icon 2 minute read

The investigation is being carried out jointly by the farm ministry, the public administration ministry and the Fair Trade Commission (FTC), Farm Minister Suh Kyu-yong said during an interview with news Y, Yonhap News Agency's all-news cable TV channel.

"We are working with the public administration ministry, which monitors restaurants for their price setting. In particular, the FTC is looking into any problems with the distribution process and possible price distortion," Mr Suh said.

Along with the ongoing investigation, he said that the government has now prepared diverse measures to stabilise beef prices.

The government, in particular, is seeking to create a large-scale meat processing and distribution company consisting of producers in order to shorten the overall delivery structure for beef from the current five steps to three, he added.

The move comes as prices of cows sold by livestock farmers have been plummeting but beef prices remain quite high, drawing speculation both from producers and consumers for possible price distortion in the overall distribution system.

The average price of cows plunged more than 20 per cent 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.

Mr Suh said that the cattle price plunge is in part due to an increase in the number of cows being raised in livestock farms over the past few years. He emphasized that the government will reduce the number to stabilise prices.

As for worries about rising feed costs, which pose yet another challenge for farmers, Mr Suh said that the government will keep import tariffs and other taxes low on such products, while doubling the size of land to grow grass to be used as feed by 2014.

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