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[Alpha Biz=(Chicago) Reporter Kim Jisun] As CJ CheilJedang decided to lower the price of flour supplied to Nongshim, attention is focused on whether the price of ramen will fall. Food companies that use wheat as raw materials such as milling and ramen are under pressure from the government to cut prices as international prices of wheat have recently fallen.
According to the food industry on the 26th, CJ CheilJedang decided to lower the price of wheat nuts supplied to Nongshim by 5-10% starting next month in the form of increasing sales incentives. Sales incentives are a kind of commission paid by suppliers to large retailers that purchase a lot of flour. A rise in sales incentives has the effect of lowering the price of flour supplied.
As a result, ramen companies also have room to consider cutting prices. A Nongshim official said, "If the prices of flour supplied fall, we may consider lowering ramen prices. The ramen industry's No. 1 Nongshim's cut in prices will also affect the price policies of other companies such as Ottogi and Samyang Foods. The ramen industry has lowered ramen prices by 20 to 50 won in line with the drop in wheat prices in 2010.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
