The Right Price of Fried Chicken

The Right Price of Fried Chicken

As the price of South Korea's beloved fried chicken creeps toward the 20,000-won mark, questions are being raised about how much it should really cost.

Se-Woong Koo
Se-Woong Koo

Kimchi is a Korean staple, but fried chicken may be South Korea's most revered snack, with some calling it "Chineunim" (치느님)—a combination of "chicken" with the Korean word for God (Haneunim 하느님).

In 2015 the country boasted some 36,000 fried chicken businesses, according to media estimates based on data from Korea Statistics, a government agency. A study by the Korea Research Institute for Human Settlement (KRIHS), a state-funded think tank, sees the figure as being much higher: it says that since 2005 the number of fried chicken outlets has remained fairly constant, at 85,000 over more, with only slight fluctuation from year to year.

If we believe the true number is somewhere in the middle, that's still about 60,000, equating to one fried chicken place for every 867 people in a country of some 52 million.

What it doesn't mean is that fried chicken is dirt-cheap because of its ubiquity. While some less expensive options do exist, a box (the equivalent of a single chicken) likely costs between 16,000 and 20,000 won (13.20 to 16.50 dollars) after price hikes a few months ago reflected the steep rate of inflation.

If ordering on a delivery app as is common, one must tack on the fees, which differ at each restaurant and depend on availability of delivery workers in a given moment.

Why Food Delivery Apps Thrive in Korea
If you have a craving for, well, just about anything edible, Baemin, Yogiyo or their numerous competitors are at your disposal.

Just at the end of last year South Korean media were collectively bemoaning this new "age of 20,000-won fried chicken". So when the chairman of the fried chicken franchise behemoth BBQ said in an interview last week that "the price of a fried chicken should be more like 30,000 won to be reasonable", it sent the public into something of a mini tailspin.

"Think of pork belly [which Koreans love to grill]. 150 gram costs 15,000 won, so one kilogram would be 100,000 to 100,500 won", argued BBQ chairman Yoon Hong-geun. "And a fried chicken weighs about one kilogram," meaning it's grossly underpriced in his view.

Chicken, though, has long been seen as a cheaper source of protein, and the online reaction was negative to put it mildly.

"Even in Paris with its high cost of living, a rotisserie chicken costs 8 euros (about 10,000 won). It might even be 6 or 7 euros at a normal street vendor. A fried chicken for 30,000 won? Does that even make sense? That bastard is crazy!!" went one much liked comment on a news article about Yoon's opinion.

That's a bit of an unfair comparison: frying a chicken in pieces requires more work than roasting it whole in an oven, and in Paris rotisserie chicken is generally sold by butchers, who do other business at the premises to bring in an income. Fried chicken vendors in South Korea meanwhile tend to sell only their specialty (plus some side dishes and drinks) and nothing else.

But the anger reflected the popular perception of fried chicken. If you are among readers living in countries with even higher costs of living, less than 20 dollars for a special delicacy may not sound like much. In South Korea fried chicken is considered an affordable snack that should be within reach of the middle and working classes.

Female protagonists in K-dramas often come from families that run chicken businesses, like here in the currently airing Business Proposal. It speaks to the strong association between the middle and working classes and chicken (and to the common practice for big chicken franchises to pay for product placement on TV shows).

Many households feel that 20,000-won price tag for an order of fried chicken is a burden. The idea that 30,000 won is more appropriate had every potential to anger them.

It's a fascinating turn for a cuisine that was embraced by the public only in the last few decades.

Cultural critic Kim Hwa-young notes that the country's first-ever fried chicken franchise—Lim's Chicken—set up shop in 1977 in the upmarket food hall of the Shinsegye Department Store. A real turning point was only in the 1980s, however, under foreign influence: the US firm Kentucky Fried Chicken granted licensing rights to a local company, allowing the first of its dozens-to-be South Korean outlets to open, in 1984.

By the late 80s so-called "fast food" became something of a norm and a symbol of the burgeoning middle-class lifestyle. "It's easy to see office workers going home in the evening with a box of pizza or a bag of fried chicken," observed the daily Maeil Business Newspaper on Dec. 14, 1989. Later that month, the left-leaning Hankyoreh criticized the unstoppable popularity of Western fast food including fried chicken as a sign of "excessive consumerism". In other words, this new dish was certain luxury rather than an everyday staple.

But in the 1990s that fried chicken, especially in combination with beer, went mainstream, acquiring a reputation as an essential accompaniment to sports-viewing experiences, to be enjoyed at baseball stadiums, for instance.

The 2013 K-drama My Love From the Star made the Korean practice of combining fried chicken with beer well-known abroad. 

Jeong Eun-jeong, the author of perhaps the most authoritative book on the subjectThe Tale of Chicken in the Republic of Korea (Daehan Minguk chikin jeon 대한민국 치킨전)—says the availability of fried chicken "exploded after the 1997 Asian financial crisis" because laid-off workers with "limited capital couldn't afford to rent big spaces for business."

A news article from Apr. 15, 1998—not long after the Asian Financial Crisis—recommended selling fried chicken as a "promising entrepreneurial field in the age of the IMF" (Koreans often refer to the financial meltdown of the late 1990s as the "IMF crisis" or the "IMF age" because of the massive bailout the country received from the International Monetary Fund. 

Around that time many companies went bankrupt or carried out extensive restructuring, laying off hundreds of thousands of employees. Middle-aged or older office workers with no career prospect used their severance packages to start selling fried chicken, for which special skills were unnecessary.

The KRIHS study corroborates that the peak of the boom was between 2000 and 2004, with about 50,000 fried chicken eateries opening just in this five-year period.

With all that competition, the profit margin is thin, and the work is grueling: in a common scenario, wives spend evenings and nights frying the chicken in hot oil and husbands deliver the product on motorcycles (at least until delivery apps took off), with children contributing free labor as needed. Few get rich off selling fried chicken unless they own the large franchises dominating the market, like BBQ's chairman Yoon.

He was found in 2017 to have transferred company shares worth hundreds of millions of dollars to his son while paying only some 400 dollars (500,000 won) in taxes for it. Naturally, his opinion last week that the basic ingredients of fried chicken—the meat itself, the coating powder and oil—alone cost more than 10,000 won didn't win him much sympathy.

Because included in that base price of 10,000 won is the high margin charged by the franchises like Yoon's, reportedly around 30 to 35 percent, while an individual licensee earns about 10 percent of the final retail price. Each consumer paying 20,000 won amounts only to 2,000 won in income for the shop owner.

The news early March that the Korea Fair Trade Commission, which regulates unethical business practices, fined 16 poultry producers for price-fixing hasn't helped the mood. They were found to have colluded over a period of 12 years to inflate the price of chicken, which South Koreans are consuming more than ever—18.2 percent more than in 2014, at nearly 16 kilogram per adult per year as of 2020.

Everyone is taking a cut of the business, and it's the consumers who have to pay big money for their beloved fried snack. It would suggest that if the market is reformed, prices would come down, but should they?

The handwringing over fried chicken prices is about more than just, well, fried chicken. It telegraphs anxiety about the seeming collapse of the middle class and growing inequality. If ordinary people cannot afford to eat fried chicken, then surely something is wrong with this country!

That belief overlooks just where cheap chicken comes from under the current business model: almost entirely absent from the domestic discussion on how much fried chicken should cost is the grim reality of animal welfare.

The industry caused a shock in 2017 after a banned insecticide harmful to human health was found on many chickens. Factory-farming was blamed for encouraging the spread of mites that thrive in damp conditions, and instead of addressing the root cause, some producers had turned to the quick solution of spraying chemicals directly on the animals.

"When you raise chicken like chicken ought to be, then they are of course healthy," told the writer and expert Jeong Eun-jeong the left-leaning daily Kyunghyang Shinmun. "What most saddens small farms that strive to raise chicken in a healthy way is consumers complaining about the price."

Maybe what needs to be rethought isn't the price or the market structure alone; it's the very idea that fried chicken—once a rarity—should be cheap and commonplace.

Cover: Ahn Kiyong via flickr (CC BY-NC-ND 2.0)

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