NEWS
S. KOREAN GOV’T ALLOWS RETAILERS TO SELL ALCOHOL AT BELOW SUPPLY PRICE
By Siulan Law Mathews DipWSET
9-8-2023
Source: Unsplash
South Korean government allows retailers to sell alcoholic drinks at prices lower than supply price in a desperate attempt to alleviate soaring retail prices.
Selling alcohol below the supply price has long been prohibited in South Korea as a way to maintain market order.
Local media reported that the country’s tax authority recently informed alcohol retailers that they will be permitted to sell alcoholic drinks at discounted prices.
If a restaurant buys a bottle of beer at WON2,000 (USD1.54) from its distributor, they can now sell it at a lower price as a way to attract customers.
This sort of marketing practice was not allowed previously.
Though some in the industry expected prices to fall at restaurants and supermarkets, many are sceptical about the effectiveness of this move.
They cannot see why restaurants will be willing to give up their profits and drop prices to loss-making level.
Local media said that the government is very concerned about the retail prices of alcoholic drinks, Soju in particular as it is considered a daily necessity in South Korea.
Average retail price of Soju has topped WON6,000 per bottle recently, which is widely considered a psychological price limit in the country, and a level that the government wants to guard against.
According to data from Korea Customs Service, the average South Korean adult consumed 52.9 bottles of Soju and 82.9 bottles of beer in 2022.
(the writer can be contacted at: info@thewinechronicle.com)
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