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A pair of Levi's jeans that costs W150,000 in Korea retails for around W130,000 in France, around W100,000 in Hong Kong and a mere W40,000 in the United States (US$1=W1,153). That's according to a survey by Consumers Korea of the average prices of 52 commodities in 28 countries.
Consumers Korea said prices of Korean beef, wine, jeans, imported baby formula, mobile phones and imported pork all made the top five most expensive list in the world. The 52 commodities surveyed were among consumer products the Lee Myung-bak administration has picked for price control and which were comparable on an international level.
The 28 countries surveyed included the United States, Japan, Germany, China, Vietnam and Hong Kong, and 17 of them were members of the OECD.
¡ß Beef, wine, jeans, baby formula, phones, pork
Prices of the popular Chilean wine Montes Alpha Cabernet Sauvignon 2007 were the second highest in the world in Korea after Russia, at W35,900 a bottle. That was at least W10,000 to W20,000 more expensive per bottle than in the U.S. (W23,568) and Japan (W14,864). In the case of beef, 1 kg of domestic beef tenderloin was the most expensive in Japan (W95,130) followed by Korea (W86,600). Imported beef in Korea cost W52,600 per kg, making Korea the sixth most expensive country in terms of that commodity following Germany and Spain.
Imported pork was the fourth most expensive in Korea among the surveyed countries, costing W11,000 per kg. Levi¡¯s jeans sold in Korea were the third most expensive in the world. Mobile phones were the fourth most expensive after Turkey, France and Poland, costing W657,000.
¡ß Tax, sales commission blamed
Consumers Korea cited taxes and the distribution structure as the main reason behind the price differences. Taxes such as tariffs, liquor and education taxes, accounted for 55 percent of the total cost of imported wine. Korea also had more expensive sales commissions charged by distributors than other countries. In Korea, wine was classified as sundry/luxury goods and came with a 15 to 30 percent commission charge. In advanced countries, the commission was less than 15 percent, with wine being classified as a food product.
In the case of foreign-made jeans and baby formula, a monopolistic structure where one importer dominates distribution and a high-price marketing strategy by those companies fanned overpricing.
For imported pork, small importers were engaged in overheated competition overseas, contributing heavily to the markup, Consumers Korea said. High unit production costs, including labor costs, were the main reason behind expensive domestic beef prices in Korea, the group said.
In contrast, subway (16th), bus (16th), tap water (16th), gas (20th), electricity (20th), cable (23rd) and other public utility charges were relatively cheap in Korea.
Consumers Korea secretary-general Kim Ja-hye said Korea¡¯s economy ranked 10th among the 28 countries surveyed, but seven products ranked in the top five in terms of price, showing that consumer prices were generally expensive compared to the size of the country¡¯s economy. Kim urged the government to manage consumer prices and keep them at adequate levels.
(englishnews@chosun.com )
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