NEWS
S. KOREAN GOV'T ATTEMPTS TO SLOW LIQUOR PRICE HIKES AS PSYCHOLOGICAL LIMIT LOOMS
By Susan Lewis
9-3-2023
Credit: Samia Liamani/Unsplash
The South Korean government has attempted to convince liquor manufacturers to slow price hikes for Soju and beer, the two most popular alcoholic drinks in Korea, according to Korean news media.
With prices of beer products expected to go up following a tax hike in April, the local liquor industry is widely expected to raise the prices of Soju too.
Local media reported that the Finance Ministry has increased pressure on the liquor industry as it looks into their overall business practices from production to distribution.
“I ask for the cooperation of related industries when it comes to the (price hikes) of items that people are closely associated with, such as Soju,” Finance Minister Choo Kyung-ho said earlier at a parliamentary meeting.
“Authorities’ efforts and policies are important in stabilising product prices, but cooperation from all areas matters, too,” he added.
Korean media also said the country’s National Tax Service has held a closed-door meeting with liquor businesses to share their pricing plans and ask for support to manage liquor prices in a stable way.
While the Fair Trade Commission was said to be looking into possible antitrust issues regarding price hikes, as the liquor industry is dominated by only a few leading players.
The Korean government plans to raise liquor tax on beer by WON30.5 (USD0.023) to WON885.7 per litre in April, exceeding last year’s increase of WON20.8. Following the tax hike, the factory price of a 500-milliliter beer product will increase by WON15.25.
Despite that no tax hike is planned for Soju, officials are concerned that the rising costs of raw materials and logistics will lead to increased retail prices as well.
Soju, along with instant ramen, is considered a daily necessity by South Koreans, with the government closely monitoring its price changes.
Local media said average retail price of Soju will possibly break WON6,000 per bottle, 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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