The South Korean government vowed to initiate watch and crackdown on price hikes at casual dining chains as employers have begun to translate the increased labor cost from a double-digit jump in minimum wage in the new year onto menu prices.
“There are concerns about price rises and inflationary pressure following the minimum wage hike. We will study whether price gains were legitimate and take preemptive actions to prevent chain price increases,” vice finance ministry Ko Hyoung-kwon said in presiding the cabinet meeting.
In line with President Moon Jae-in’s campaign pledge to raise the hourly wage floor to 10,000 won within his five-year term, the minimum wage jumped 16.4 percent from last year to 7,530 won ($7.04) starting January.
The Fair Trade Commission will carry out crackdown on franchisees and take punitive actions upon discovering collusive behaviors. The Ministry of Agriculture, Food, and Rural Affairs will separately monitor food market for price changes.
By Yoon Won-sup and Cho Jeehyun
[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]