Consumers Even Turning Away From Domestic Beef

Mad cow disease is sending shock waves through the domestic beef market.

Two of the largest wholesale meat markets, the Majang-dong and Garak-dong markets, were stagnant on Saturday.

Wholesalers have moved imported beef off their shelves. Merchants selling domestic beef worry about plunging supply and skyrocketing prices.

Usually, Christmas and the New Year holidays are big selling days, along with the Chuseok holiday, but this year is an exception. Merchants worry about an overstock of beef, and there is a bigger concern that the shock will last much longer than expected.

Markets have been hit hardest before the big shopping season. At 11 a.m. Saturday, a wholesale meat market in Majang-dong, where more than 4,000 businesses stand, is usually very busy, but this time there were only worried-looking merchants talking to each other.

Jo Seong-hyo, 45, who sells imported meat, piled up meat boxes from the U.S. and Australia, as did other merchants. He said, “Business in imported meat has stopped since the outbreak of mad cow disease. We are hit hardest since the New Year holiday is the biggest sale season with Chuseok.”

“Advanced sales have been canceled, leaving us plenty of beef in stock. The case of mad cow disease broke out in the U.S., but people think that all imported beef is infected. It is just a matter of time before people think that domestic beef is not safe,” said Sin In-gyeong, 50, a wholesaler for 24 years.

At the Domestic Livestock Cooperative`s Joint Market in Garak-dong transactions were sluggish because of the high price and short supply. Under ordinary circumstances, the market is very active with many wholesalers participating in auctions, but now, they have long faces.

Dealers said, “Livestock farmers are delaying sales as the price of beef goes up. It is hard to control supply and demand.”

Mr. Sin, a wholesaler who deals with high quality cows to supply well-known stores, said, “Domestic castrated cows are in short supply, so I was able to buy only three. The price per kilogram increased by 700 to 1,000 won in a day.”

An auction dealer, Yun Byeong-in, said, “The price of domestic beef is increasing since the outbreak of mad cow disease. We even saw the price jump by 1,500 won per kilogram in some cases.”

Dealers said that the supply of imported beef would plunge since imports from the U.S. are banned. If the ban is imposed for a long period of time, dealers may have no choice but to sell imported beef as if it were domestic. U.S. beef accounts for 44 percent of the Korean beef market.

“If U.S. beef imports, which account for nearly half of the domestic supply, are not distributed, and the price of domestic beef keeps rising, meat sellers will have no choice but to cheat buyers. Eventually, consumers may stop buying and eating beef,” said meat broker Mr. Yang. “The Government should come up with strong measures to relieve consumer anxiety before things get out of control.”

jarrett@donga.com tesomiom@donga.com