April 9, 2026

 

Bird flu and increased feed costs impacting South Korea's fried chicken franchises

 

 

South Korea's fried chicken franchises are caught in a bind: poultry prices are surging due to avian influenza outbreaks and rising feed costs, but raising menu prices remains difficult under the government's push to rein in inflation.

 

Major poultry producers, including Maniker, Harim and Allpum, a chicken subsidiary of the Harim Group, have raised supply prices by 5-10%  for franchise chains, large retailers, and distributors, according to industry sources.

 

Harim attributed the increase to prolonged avian influenza outbreaks and rising feed costs linked to a weaker won.

 

"Bird flu has continued longer than last winter, leading to a larger-scale culling of breeder chickens, and feed prices have also risen due to the weaker won," the company said.

 

The impact has been particularly severe this year. From November of last year through early last month, about 440,000 breeder chickens were culled, up 3.5 times from 120,000 a year earlier. The figure accounts for roughly 5% of the total breeder chicken population, which stood at 8.2 million birds as of last November.

 

Retail and wholesale chicken prices have risen accordingly. According to livestock distribution platform Dabom, retail chicken prices reached ₩6,534 (US$4.35) per kilogramme as of March 28, the highest level in two years and nine months since June 2023.

 

The weekly average price also climbed to ₩6,612 (US$4.40) per kilogramme, up about 5% from the previous week. Wholesale prices rose 10.2 % to ₩4,240 (US$2.82) per kilogramme between March 1 and 27, compared to ₩3,846 (US$2.55) in February.

The industry, which relies heavily on domestically sourced chicken, is now grappling with both supply shortages and rising costs. While some companies use imported chicken for boneless menu items, bone-in chicken — a core product — is largely made with domestic poultry.

 

Franchise brands such as BHC, Goobne Chicken and Cheogajip use domestic chicken for all menu items, leaving them more exposed to price pressures.

 

Earlier and more severe avian influenza outbreaks are likely to weigh on demand, according to Korea Rural Economic Institute researcher Lim Hyo-bin.

 

"Last year, bird flu began in September, about a month earlier than usual," Lim said. "Rising chicken prices are expected to act as a constraint on consumption this year, leading to a decline in demand."

 

Despite mounting cost pressures, companies are hesitant to raise prices immediately.

 

"Profitability is likely to deteriorate as the outbreak continues, and we are closely communicating with franchise owners to manage supply conditions," a representative of a chicken franchise said.

 

"Although there are many factors pushing up costs, including packaging materials, raising prices is burdensome given the government's emphasis on price stability," another industry source said. "We will delay price hikes as long as possible and recover losses later when supply stabilises."

 

- Korea JoongAng Daily