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Koreans pay the highest price for imported bananas, imported perfumes, and public parking fee
- Attributable to higher marketing margins and limited competition
The Korea Consumer Agency (President: Kim, Young-Seen, www.kca.go.kr) compared consumer price of imported goods in Korea with local price in G7 member nations and major Asian nations based on Purchasing Power Parity (PPP) and found that Koreans are paying the highest price for imported items such as bananas, printer ink, wine, perfumes, and car tires. Among non-trade items, Koreans pay the highest price for public parking fee.
In the order of higher PPP, ‘imported car tires (3.3 times higher than foreign average)’ were followed by ‘beef sirloin (3.1 times more)’, ‘imported bananas (2 times more), ‘pork belly (1.9 times more)’, ‘imported wine (1.7 times more)’, ‘private parking fee (1.6 times more)’, ‘imported oranges (1.5 times more)’, ‘public parking fee (1.5 times more)’, ‘imported mountain bikes (1.4 times more)’, ‘imported perfumes (1.4 times more)’, and ‘imported facial lotion (1.4 times more)’.
Reasons behind the above price gap with other nations differ by items. However, for imported goods, the gap is chiefly attributable to marketing margins such as commission, sale structure with an exclusive importer, and vertical price control by local dealers.
The KCA found these results after having conducted a price survey on 20 items (industrial products, foods, and services) that are closely related to daily lives of people or have quite closed distribution structure of G7 member nations and major Asian nations (11 nations in total).
Based on these findings, the KCA plans to make a recommendation for improvement related to this time of survey results to related government departments including the Korean Fair Trade Commission.
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■ Conducting a price survey on 20 items for 11 cities of 11 nations
*The eleven cities include Seoul (Korea), New York (US), London (UK), Frankfurt (Germany), Paris (France), Tokyo (Japan), Milan (Italy), Toronto (Canada), Taipei (Taiwan), Hong Kong (China), and Singapore (Singapore).
The 20 surveyed items comprehend general industrial good s (4), personal items (1), liquor (1), cosmetics (2), baby products (1), foods (6), and service goods (5).
Consumer price comparison is based on PPP and foreign exchange rate.
■ Implications of the results
1. Imported goods market needs supervision and investigation for non-fair trade.
2. Improvement for the existing marketing margins (cost) is requisite.
3. Review on tax improvement is required for items that largely affect people’s daily lives.
4. Price cut should be led through diversified methods including information provision of price comparison.
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Supplementary coverage
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Baek, byoung-sung, Head of Consumer Transaction Research Team, Consumer Policy Research Bureau (☎ 02-3460-3301)
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Lee, Sang-sik, Research Fellow of Consumer Transaction Research Team, Consumer Policy Research Bureau (☎ 02-3460-3302)
Won, Hye-il, Head Researcher of Consumer Transaction Research Team, Consumer Policy Research Bureau (☎ 02-3460-3303)
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