NEWS
S. KOREA: SHINSEGAE & LOTTE SUSPENDED WHISKY DISTILLERY PLANS AMID PLUMMETING DEMAND
By Siulan Law Mathews DipWSET
4-3-2024
Credit: Carl Folscher/Unsplash
South Korean retail giants Shinsegae and Lotte have reportedly halted their plans to build whisky distilleries in the country as local demand for whisky slowed substantially after having soared for nearly three years.
South Korean media reported that Shinsegae L&B, the retail giant’s alcoholic beverage arm, has temporarily halted its plan to build a distillery in Jeju Island.
The company is said to be moving to expand the import and sales of non-whisky products such as sparkling wine, gin, rum and vodka instead.
Lotte Chilsung Beverage, Lotte’s wine and spirits arms, was also said to have suspended its on-going preparation for a whisky distillery, citing the high costs of building a distillery and the long maturation time of the product.
In January this year, South Korea imported 2,031 tons of whisky, representing a decline of 27.4 percent on the same month last year.
The decline is in stark contrast to the strong growth seen in 2020 to 2022. South Korean whisky import value increased from USD132.46 million in 2020 to USD175.34m in 2021 and USD266.84m in 2022.
The trade started to lose steam last year as import value declined to USD259.57m. While by volume the import has hit a record high of 35,886 tons, but it has since slowed and continued to plummet in the first two months of this year.
South Korean media reported that high-priced whisky released for lunar new year—Dalmore 45YOld by 7-Eleven convenience store priced at WON48m and the Glenfiddich 60 YO by Hyundai Department Store priced at WON80m—did not sell a single bottle.
It contrasts starkly with last year, when Glenlivet Gordon & MacPhail Generations 80YO sold well despite being priced over WON200m.
The Shinsegae Group was reportedly planning to use the facilities of Jeju Soju, a soju distillery purchased by the company earlier, for the production of whiskies. The group was said to have registered 14 trademarks for whiskies to prepare for the new business.
Meanwhile, the Lotte Group last year revealed that it has got permission from Jeju authorities to convert a parcel of land it owns into a whiskey distillery. The company was said also to be actively recruiting whisky experts from Scotland and beyond to help set up whisky distilleries at home.
As market momentum turns, both of these plans have now been put on hold.
(the writer can be contacted at: info@thewinechronicle.com)
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