Egg distributors call for benchmark pricing system amid supply uncertainty

South Korea's egg distribution industry has called for regulatory reform to address pricing confusion stemming from changes to the farm-level benchmark price system, supply instability caused by highly pathogenic avian influenza (AI), and the expansion of online retail channels. Establishing a transaction benchmark price and introducing a standard contract were among the key priorities raised.

The Korea Egg Industry Association held a two-day forum beginning Friday at the Korea Culture Training Center in Gongju, South Chungcheong Province, with about 100 egg distributors and association members from across the country in attendance. The association announced the event Monday.

The forum centered on the changed trading environment following a probe and sanctions by the Korea Fair Trade Commission over egg pricing. In May, the Fair Trade Commission ruled that the Korea Laying Hen Association had set farm-level benchmark prices without objective calculation criteria, thereby influencing market prices, and ordered a corrective measure along with a penalty surcharge.

The Ministry of Agriculture, Food and Rural Affairs said in June that the official prices the laying hen association had been publishing were not actual transaction prices but rather the producer group's desired prices, and that they had closely tracked real farm-level prices.

Industry participants said the shift in the existing pricing system had created transaction confusion, and called for rational trading standards to be established between producers and distributors. Discussions also covered how existing distributors could maintain competitiveness amid hypermarket-focused egg discount support policies and the growing online retail market.

Korea Egg Industry Association President Kang Jong-seong said in his opening remarks that egg distributors' efforts had helped domestic egg production reach 2.8 trillion won ($2.09 billion) and per-capita egg consumption reach 292 eggs in 2024, placing South Korea fifth in the world.

He added that the business environment facing more than 3,200 licensed egg collectors and sellers nationwide was "more difficult than ever," and said he hoped the forum would "bring together the experience and wisdom of our members to overcome this crisis and chart a new vision and direction for the egg distribution industry."

At the event, Jeon Ik-seong, a director at the Ministry of Agriculture, Food and Rural Affairs, presented on improving the livestock distribution structure, while Seol Chan-gu, an official at the Ministry of Food and Drug Safety, spoke on egg safety management. Kim Jong-ho, a researcher at Age Innovation, outlined strategies for setting a future vision and securing competitiveness in the egg distribution industry.

A general discussion moderated by Korea Egg Industry Association adviser Choe Hong-geun focused on policy priorities including a pilot introduction of vaccines to prevent highly pathogenic AI, the establishment of a benchmark egg price, stronger egg grading standards, and the adoption of a standard contract.

Egg supply conditions are sensitive to outbreaks of highly pathogenic AI, which can trigger mass culling of laying hens and alter farming conditions. Because changes in output affect not only farm-level prices but also wholesale and retail prices, stable supply management and improvements to the distribution structure are considered key challenges for the industry.

The association also adopted a resolution on behalf of the more than 3,200 licensed egg collectors and sellers nationwide, affirming members' commitment to a collective response and pledging to pursue regulatory reform for sustainable industry development.

A Korea Egg Industry Association official said the group would "pursue regulatory improvements to create a rational distribution environment, strengthen industry competitiveness, and protect members' rights, based on the on-the-ground opinions and policy priorities gathered at the forum."