16 out of 20 food companies see cost ratio decrease in 1st quarter

While food companies have been raising prices this year due to rising raw material costs, many have found that their cost of sales burden has decreased.

The Dong-A Ilbo examined the cost-of-sales ratio of 20 major food companies closely related to consumers in the first quarter of this year through electronic disclosure by the Financial Supervisory Service. It found that the cost-of-sales ratio of 16 of them was lower than the same period a year ago. The lower the cost-of-sales ratio, which refers to the proportion of sales costs, such as raw material and labor costs, in sales, the lower the cost burden required for a company to produce a product.

Although the cost-of-sales ratio was lower than a year ago, some companies raised product prices. Among the 20 food companies, 16, excluding Lotte Chilsung Beverage, Genesis BBQ (BBQ), bhc, and G&Food (Goobne Chicken), saw their operating profits increase compared to the same period a year ago.

Many companies that have improved profitability by raising product prices are criticized for not lowering product prices after the cost burden has decreased. “The operating profit of major food companies increased in the first quarter, and the cost-of-sales ratio fell,” the Korea Consumer Organization Council said on Thursday. “If there is a reduction in costs, companies must quickly apply it to consumer prices and lower prices, just as they do when costs increase.”


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