South Korea Probes Chicken Pricing After Poultry Costs Fall 26%
South Korea’s Fair Trade Commission has inspected major fried-chicken franchise operators over possible price coordination as wholesale poultry prices retreat. Chicken used by restaurants was 26.1% cheaper than its March level, but leading menu prices remained in the low-to-mid 20,000-won range.
Competition authority examines franchise pricing
South Korea’s Fair Trade Commission has opened scrutiny of the country’s fried-chicken franchise sector after a sharp decline in poultry prices failed to produce lower prices for leading restaurant menus. According to Maeil Business Newspaper, the authority conducted on-site inspections at the headquarters of bhc, BBQ and Kyochon Chicken on October 6 as part of an examination of possible price coordination.
The commission is reportedly reviewing how individual companies set prices, whether changes in raw-material costs are reflected in menu prices, and how expenses are divided between franchise headquarters and restaurant operators. The inquiry follows growing consumer criticism that lower chicken costs should translate into cheaper meals.
President Lee Jae-myung had drawn attention to the issue on September 30, when he shared an article about stable restaurant prices despite falling poultry costs and wrote on social media platform X that he would look into the matter.
Poultry benchmark falls before partial rebound
Data from the Korea Broiler Council cited by Maeil Business Newspaper show that prices for size 9-10 chickens, commonly used by fried-chicken restaurants, fell 37.7% over six months. The benchmark dropped from 5,308 won per kilogram on March 23 to 3,308 won on September 23, a decline of 2,000 won per kilogram.
The market subsequently rebounded to 3,923 won per kilogram on October 7. Even after that recovery, the price remained 26.1% below its March 23 level. Poultry and egg prices had risen after highly pathogenic avian influenza led to the culling of broilers and laying hens during the previous winter, but supply conditions later stabilized.
Major franchises have generally kept their flagship menu prices unchanged following their latest increases. Kyochon raised prices in April 2023, bhc followed in December 2023, and BBQ implemented an increase in June 2024. Representative menu items at major chains currently cost in the low-to-mid 20,000-won range. For consumers using delivery services, the total bill can approach 30,000 won after delivery charges.
Operators point to costs beyond raw chicken
Restaurant companies argue that wholesale poultry is only one component of the final price. They cite higher labor and logistics expenses, as well as costs for cooking oil, packaging and delivery-platform commissions. The industry also says franchise headquarters previously absorbed part of rising input costs and delayed menu-price increases when chicken became more expensive.
The council’s published poultry benchmark may also differ from the prices franchises actually pay. Chicken supplied through franchise systems undergoes slaughtering, processing, seasoning and transportation. Long-term supply agreements can create a delay before movements in spot-market prices reach contracted delivery prices.
Some operators have adjusted other parts of their offers instead of cutting headline prices. Goobne Chicken reduced the weight of several boneless thigh, wing and whole-leg products from June 1. For its boneless menu, the uncooked weight declined from 800 grams to 700 grams. The company attributed the adjustment to supply pressure caused by avian-influenza-related culling. From July 1, it also raised prices for selected side dishes, including spicy chicken feet, spaghetti and french fries, by between 200 and 2,000 won.
Franchise structure complicates the inquiry
The investigation must also account for the legal relationship between franchisors and individual outlets. South Korean competition law prohibits companies from forcing trading partners to adopt a specified resale price without legitimate grounds. Industry participants say headquarters provide recommended prices, while franchisees formally decide what customers pay.
Several brands, including bhc, BBQ, Kyochon Chicken and Puradak Chicken, apply different prices for in-store and delivery orders. The commission’s review of price-setting and cost allocation could therefore affect not only corporate headquarters but also franchisees operating with different labor, rent and platform expenses. Producers such as Harim are also exposed to the debate because changing broiler prices influence the supply environment for processed chicken sold into franchise networks.
