Egg distributors have pushed back against the "Good Eggs" program led by the Small Enterprise and Market Service. They argue the program's name has cast existing distributors as profiteers. Pictured is a smart-farm egg facility. [Ganong Bio]
Egg distributors have pushed back against the "Good Eggs" program led by the Small Enterprise and Market Service. They argue the program's name has cast existing distributors as profiteers. Pictured is a smart-farm egg facility. [Ganong Bio]

'Good Eggs' program sparks backlash from distributors: 'We're being treated like thieves'

120,000 trays to reach 4,000 neighborhood stores nationwide — worth around 600 million won

SEMAS: one-time supply only, no follow-up plans; farm-to-consumer direct sales fuel anxiety

"Consumers get to buy eggs cheaply — that's fine. Neighborhood stores get to draw in customers — that's fine too. But what about the people who were already supplying eggs to those stores? We distributors have all been turned into thieves."

Kang Jong-seong, chairman of the Korea Egg Industry Association, made the remarks in a phone interview about the "Good Eggs" program launched by the Small Enterprise and Market Service (SEMAS), Hana Financial Group and the Korea Federation of SMEs and Startups. While he said he had no objection to the program's stated goal of helping consumers and neighborhood stores, he argued that from the perspective of egg distributors — who count supermarkets as their primary clients — the initiative amounts to government agencies and a financial company flooding their existing market with subsidized, below-market products.

The Korea Egg Industry Association represents more than 3,100 egg collectors and dealers nationwide. Its members primarily handle the distribution chain between producers and consumers — receiving eggs from laying-hen farms and supplying them to sorting and packaging facilities, supermarkets and food-service wholesalers.

"Our purchase price per tray is 6,500 won, and we sell at around 7,000 won — a margin of about 500 won," Kang said. "Yet we're being perceived as middlemen raking in excessive profits. That's what we find so unfair." He also said the name "Good Eggs" itself was a problem, as it implicitly casts existing distributors as the bad actors.

The program was designed ahead of the Chuseok holiday to ease household spending burdens and boost the competitiveness of small neighborhood stores. SEMAS, Hana Financial Group and the Korea Federation of SMEs and Startups plan to supply 120,000 trays of eggs to more than 4,000 neighborhood stores across the country. Consumers can purchase two trays — 60 eggs — for 9,990 won. According to the Korea Institute for Animal Products Quality Evaluation, the average retail price for a 30-egg tray in August was 7,332 won, meaning two trays would normally cost 14,664 won. The "Good Eggs" price of 9,990 won for two trays is more than 30 percent below the average retail price.

The program can offer eggs at such a low price because of outside support. SEMAS said it selected 20 poultry farms to cut distribution margins, while Hana Financial covers the costs of egg washing, candling and grading, as well as nationwide logistics. SEMAS handles price labeling and fair-trade operating guidelines, while the Korea Federation of SMEs and Startups manages placement and sales support through its small supermarket distribution network.

For consumers and store owners, the appeal is clear. Neighborhood stores, which struggle to compete on price against hypermarkets and food-service wholesalers, can use the discounted eggs as a loss leader ahead of Chuseok to draw shoppers through the door. For consumers facing high prices, being able to buy 60 eggs for under 10,000 won is a direct benefit. "Good Eggs is essentially a loss-leader product," a SEMAS official said.

Shoppers browse egg displays at a store. [Lotte Mart]
Shoppers browse egg displays at a store. [Lotte Mart]

The concern centers on the distributors who have long supplied eggs to those same supermarkets. "Supermarkets are our main clients," Kang said. "When a separately subsidized supply linked directly to producers enters those clients at a lower price, it becomes very hard for existing distributors to compete at normal prices. We end up looking like the ones who have been overcharging all along."

Structural shifts in the egg supply chain have deepened the industry's anxiety. Data from the Korea Institute for Animal Products Quality Evaluation show that in 2016, 95.6 percent of eggs were sorted, packaged and distributed through licensed egg-collection dealers. By 2024, the share of eggs shipped from farms through the wholesale stage had fallen to 81.7 percent. Over the same period, the share shipped directly from farms to the retail stage rose from around 5 percent to roughly 18 percent — meaning the proportion bypassing wholesalers entirely more than quadrupled in eight years.

Discount competition from food-service wholesalers has also been a long-running source of tension for egg distributors. The association has argued that some food-service wholesalers have used eggs as loss leaders to attract customers, pressuring suppliers to deliver below cost.

"Even when food-service wholesalers sold eggs cheaply, the burden ultimately fell on the supplying distributors," Kang said. "Now discounted eggs are going into the very supermarkets we supply. Distributors selling at normal prices end up looking like they're gouging consumers."

SEMAS maintains that the program is not a standing policy intended to replace the existing egg distribution market. The agency describes it as a one-time cooperative initiative developed with private partners to simultaneously ease consumers' cost-of-living burden and reduce the financial strain on small store owners ahead of Chuseok. "This program is limited to a single run supplying 120,000 trays," a SEMAS official said. "At this point, there are no plans to continue it."

Sustaining the "Good Eggs" price over the long term would also be structurally difficult. The two-tray price of 9,990 won is premised on Hana Financial's support covering washing, candling, grading and logistics costs. Without that support, how production, sorting, logistics and retail stages would share the cost burden would become an open question.


hong@heraldcorp.com