NEWS
DANISH BREWER CARLSBERG CAUGHT IN DISPUTE WITH SOUTH KOREAN DISTRIBUTOR
By Susan Lewis
14-7-2023
Source: Carlsberg Group
GoldenBlue, a South Korean whisky maker and distributor of imported liquor, said it has filed a complaint against its former partner Carlsberg Group for unilaterally ending their distribution contract.
The Korea Herald reported that GoldenBlue also argued that Carlsberg Group has engaged in unfair trade practices during their contract period in its complaint filed with the Korean Fair Trade Commission.
The two companies had been in partnership since May 2018, GoldenBlue said Carlsberg Group "unilaterally" terminated their contract for the distribution of Carlsberg beer in Korea in March this year.
The Korean distributor complained that the Danish brewer demanded GoldenBlue to achieve avery high sales target, leading to unsustainable marketing expenses.
GoldenBlue said its marketing expenses between 2018 and 2021 accounted for around 50 percent of net sales of Carlsberg beer products.
It added that the company made a significant investment to add some 50 new employees and set up a unit dedicated to increase sales of Carlsberg.
“Losses continued due to increased expenses (in marketing and investment) as Carlsberg Group pushed with excessively high sales goals. But, the company endured the losses in hopes that the company would be able to generate profits from a long-term perspective,” an official from GoldenBlue told The Korea Herald.
GoldenBlue said it boosted sales of Carlsberg beers significantly between 2018 and 2021, making Carlsberg one of the top 10 foreign beer brands in South Korea
“Yet, (Carlsberg Group) started to make preposterous propositions in 2021, when they were negotiating for a contract renewal,” the official complained.
From January 2022, after the original contract had expired, the Danish firm offered only short-term extensions of two to three months.
After October 2022, Carlsberg refused to renew its distribution contract with GoldenBlue.
The partnership breakdown as Carlsberg decided to directly distribute its products in South Korea. In October 2022, Carlsberg Group established its own sales office and started to distribute Carlsberg products through Carlsberg Korea.
“GoldenBlue is also considering taking (other) legal measures to settle the issue. The company will also discuss the issue with the Embassy of Denmark in South Korea,” the GoldenBlue official added.
Carlsberg Korea has not responded to our request for comments.
(the writer can be contacted at: info@thewinechronicle.com)
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