By Kim Jae-heun

Binggrae Chairman Kim Ho-youn

Ice cream lovers here are disappointed by Binggrae's move to raise prices of its flagship ice cream products, breaking an earlier promise not to do so, according to consumers and company officials Wednesday.

Binggrae acquired rival Haitai Ice Cream in 2020 and argued at the time that the Fair Trade Commission (FTC) should approve its acquisition because it will prevent Lotte Confectionery from monopolizing the market and jacking up the prices of frozen snacks.

But instead of holding Lotte in check, Binggrae also decided to increase ice cream prices. Binggrae said it will raise the prices of its steady-sellers like "Together" and "Melona" by 25 percent starting Feb. 3. Lotte Confectionery will also increase the prices of its best-sellers like "World Cone" and "Snow Ice" by the same margin.

Melona ice cream / Courtesy of Binggrae

"Most of Korean's favorite popsicles are made by Lotte or Binggrae. When they raise the prices of their best and steady-sellers, people have no option but to take it," a 34-year-old consumer surnamed Park said.

After taking over Haitai Ice Cream, Binggrae's market share increased to 40.7 percent. Lotte Group accounts for 44.1 percent. The FTC expressed concern over the two companies accounting for 85 percent of the market and thereby limiting customers' right of choice.

Binggrae said the increase in the cost of subsidiary materials for manufacturing ice cream is the reason behind the price hike.

"Due to the recent rise of domestic crude oil prices and other subsidiary materials like petrochemicals and paper pulp imported from abroad, we could not control the manufacturing price of our products," a Binggrae official said. "The pressure to improve the company's profitability is intensifying."

Binggrae saw sales rise 19.6 percent year-on-year in 2021 to 1.14 trillion won ($949 million), thanks to its business expansion together with Haitai Ice Cream. It was the first time that the company's revenue surpassed 1 trillion won since its establishment in 1967.

However, operating profit plunged 34.1 percent to 26.2 billion won during the same period. Haitai Ice Cream's cumulative loss was added to Binggrae's profit and the increased crude oil prices played a part.