KCA News & Media
Press Release
Press Release
| Survey of 7 item prices between Korea and other countries | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Date | 2008-06-04 | Hit | 5028 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Green fees for golf courses and imported canned beer
in Korea, higher than overseas average
-Survey of 7 item prices between Korea and other countries-
Green fees for golf courses and imported canned beer in Korea are much more costly than G7 countries (U.S.A., Japan etc.) as well as major Asian countries (Singapore, China etc.).
Based on average exchange rate, golf green fees are 41.8% more expensive than other countries and imported canned beer, 20.2% more. By Purchasing Power Parity (PPP), green fees are 127.9% higher and imported canned beer, 83.8% higher.
To enhance the market competition and consumer welfare by providing updated information, the Korea Consumer Agency (President: Myung-Hee Park) released the results of a price comparison of seven items--imported canned beer, golf green fees, coffee, cosmetics, original books, bottled orange juice and snacks between Seoul and 11 other cities in G7 nations and major Asian countries.
In comparison with major Asian countries such as China, Taiwan and Singapore, the prices in Korea are higher on average for 5 out of 7 items based on the average exchange rate. Green fees for golf courses are 43.1% higher, imported canned beer 43.0% higher, snacks 37.0% higher and cosmetics 10.0% higher respectively than other Asian countries. (Please refer to the following table).
Prices in Korea are higher than those in the United States for 6 out of 7 products surveyed. Among them, imported canned beer are 68.6% more expensive, snacks 37.4%, cosmetics 19.8% and green fees for golf courses 10.6% more respectively.
By Purchasing Power Parity, green fees for golf courses in Korea are 127.9% more costly than the G7 average. The consumers in Korea pay 83.8% more for imported canned beer than the consumers of G7 nations, 55.6% more for Starbucks coffee and 54.8% more for cosmetics each. Thus, the prices of those items turned out to be more costly, compared with overall price level in Korea.
This survey aimed at providing international comparative price information of the items which are commonly available. In addition to the 7 items surveyed, another 10 more item prices will be released in June.
The price differences between Korea and other countries reflect various factors, such as currency fluctuations, government policies, tax systems, logistics expenses, labor productivity, and prices of raw materials.
The Ministry of Strategy and Finance recently expressed its intention to reduce the excessive taxes (10 kinds of taxes such as special consumption tax, education tax, property tax, etc) on the green fees for golfing. In addition, the excess demand and the premium marketing strategy taken by many of the golf courses caused much higher golf green fees in Korea.
The higher Starbucks coffee prices are the result of a high cost structure such as expensive shop rental, a 5% royalty, and the consumer preference for popular branded coffee shops.
A tax bearing rate on imported canned beer is 53%, compared with U.S.A. (14%), Germany (15%) and France (18%). The higher prices of cosmetics reflect the restrictions on parallel imports and excessive profit margin compared with import cost.
However, an in-depth analysis is needed to find out the reasons for price differences between Korea and other nations.
The KCA will ask the Korea Fair Trade Commission and other relevant government agencies to monitor unfair trade practices for surveyed items that cost much more in Korea, and to reform the unreasonable systems such as high taxes and bans on parallel imports.
Price Comparison by Items & Countries
■ Cart fees for golf courses, highest among 11 nations
A non-golf-club-member’s average green fees for a round of 18 holes are KRW 193,850, and Korea ranks 2nd among 11 nations.
For weekdays, U.K. is most expensive at KRW 176,190, followed by Korea at KRW 173,340, Japan at KRW 157,140, U.S.A. at KRW 154,470, Hong Kong at KRW 146,750 and Singapore at KRW 127,860.
For weekends, Japan is most expensive at KRW 262,710, followed by Korea at KRW 214,350, U.S.A. at KRW 196,600, Singapore at KRW 195,150, and Hong Kong at KRW 167,990.
For a cart fee(for 5 persons), Korea is most expensive at KRW 77,170, followed by U.K. at KRW 58,560, Italy at KRW 58,550, France at KRW 53,080, Canada at KRW 42,490 and Germany at KRW 32,160.
Green Fees for Golf Courses and Cart Fee by Nations
(Unit: Korean Won)
Based on market average exchange rate during the survey period
The high taxes on golf courses and an excess demand caused expensive golf green fees in Korea. Thereby, the Ministry of Strategy and Finance recently expressed its intention to reduce the high taxes on golf courses.
■ Korea ranks 4th in the price of Starbucks coffee
among 10 nations
Based on the average exchange rate, Korea ranks 4th in 8 kinds of Starbuck coffee prices among 10 nations. However, Seoul is the most expensive city, not considering European cities where prices have risen due to the recently increasing strength of the Euro currency.
A cup of Caffe Americano (Tall/350㎖) sells for KRW3,300 at Starbucks in Seoul, KRW4,060 in France and KRW3,740 in Germany while the same drink sells for KRW2,280 in U.S.A. and Canada. It means that Koreans pay KRW1,020 more (44.7%) than Americans and Canadians.
A cup of Coffee Frappuccino(Tall/350㎖) sells for KRW4,300 at Starbucks in Seoul, KRW7,180 in France and KRW5,300 in Germany while the same drink sells for KRW3,130 in Taiwan. It means that Koreans pay KRW1,170 more (37.3%) than the Taiwanese.
By PPP, Starbucks coffee prices in Seoul were found to be most expensive among the 11 surveyed cities. It means that coffee is more expensive compared with the overall price level in Korea. Expensive Starbucks coffee prices resulted from the high cost structure such as expensive shop rental, a 5% royalty, and the consumer preference for popular branded coffee shops.
Price Comparison of Starbucks Coffee by Countries
(Unit: Korean Won)
■ Imported canned beer prices, Korea ranks 5th
among 11 nations
Among 11 nations, Korea ranks 5th in the price of imported canned beer, but highest based on Purchasing Power Parity(PPP).
Based on the average exchange rate, if the price of imported canned beer in Korea is 100, its price in UK and China is 116.3 and 42.7 respectively.
The price of imported Budweiser (355㎖) is highest in the U.K. at KRW2,130. The beer sells for KRW800 in China, compared to costing KRW1,500 in Korea. Therefore it costs 87.5% more in Korea.
Budwiser Price Comparison by Countries
(Unit: Korean Won)
The high price of imported canned beer in Korea is determined by various factors including liquor tax, education tax, etc.
■ Cosmetics and Snacks
In imported cosmetics, Korea ranks 8th (KRW 32,700) and 6th (KRW 106,660) in the prices of lipstick and nourishing cream respectively based on the average exchange rate, but highest based on Purchasing Power Parity.
Korea ranks 7th in the price of snacks (5kinds of Pringles) based on the average exchange rate, but the price is relatively higher than in other major Asian countries.
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