South Korean restaurants struggle to survive as global oil prices eat into profits

A Korean barbecue restaurant.

Small business owners in South Korea are feeling the pinch from rising fuel prices.

Photo: Shutterstock Kim Bong-hwan, who runs a barbecue restaurant in Myeong-dong in central Seoul, is feeling the brunt of rising costs, with wholesale beef prices climbing from about 28,000 won (US$18) per kilogram to more than 40,000 won in recent weeks. “Everything’s going up – beef, pork, eggs, vegetables and even disposable materials like plastic bags and containers,” he said. “Prices have risen 20 to 30 per cent in just a few weeks.” Kim, who has operated the restaurant for more than 15 years, said raising menu prices was a last resort as he feared losing customers. “For now, I’m absorbing the hit to my margins,” he said. “But I’m worried this is only the beginning and the worst is yet to come.” Like Kim, many small business owners across South Korea are grappling with rising fuel, ingredient and packaging costs as higher global oil prices ripple through the economy amid tensions in the Middle East.

Global oil prices have surged amid the escalating conflict.

As a major energy importer, South Korea is particularly vulnerable to higher prices, which are pushing up costs across industries, including fertilisers, animal feed, farm fuel and transport.

Locals have dinner in a traditional open-air restaurant in Seoul.

Photo: Shutterstock The spike in packaging costs is linked to disruptions in naphtha supply, a key petrochemical feedstock derived from crude oil.

South Korea imports about 45 per cent of its naphtha, with 77 per cent coming from the Middle East.

Online communities for self-employed workers are flooded with complaints about soaring packaging costs, particularly for plastic bags and food containers widely used in the country’s delivery-driven market. “One of my suppliers raised prices of food containers by 100 per cent.

Unbelievable.

I might have to suspend my business for a while,” one user wrote.

Another user said an order that previously cost 70,000 won for 600 units of plastic containers now costs 90,000 won.

Several suppliers of plastic containers and packaging materials have posted notices on their websites warning of “unavoidable price hikes” due to rising raw material costs and supply instability.

Some said prices may be adjusted without prior notice once existing inventories are depleted.

Amid rising cost pressures, the Korea Federation of Micro Enterprises (KOFME), a coalition of self-employed workers, called

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