Korean liquor giants to slash soju prices in 2024

Korea's major liquor players, including Hitejinro and Lotte Chilsung Beverage, are set to reduce wholesale prices for their soju brands starting next year, following the government's plans to lower taxes for domestically produced alcoholic beverages.

Bottles of soju are displayed at a large discount store in downtown Seoul on Monday. [NEWS1]

Korea's major liquor players, including Hitejinro and Lotte Chilsung Beverage, are set to reduce wholesale prices for their soju brands starting next year, following the government's announcement of plans to lower taxes for domestically produced alcoholic beverages.

Hitejinro, the country's largest liquor company, announced a 10.6 percent reduction in wholesale prices for soju brands such as Chamisul and Jinro on Monday, effective Jan. 1. Fruit-flavored liquors are also expected to see a 10.1 percent price cut.

The decision by Hitejinro is tied to the government's introduction of the standard sales ratio, a form of tax discount, with the National Tax Service setting the ratio for soju at 22 percent and domestically produced whiskey at 23.9 percent.

Last month, Hitejinro increased wholesale prices of soju, with the cost of a Chamisul bottle rising from 1,166 won ($0.90) to 1,247 won. The upcoming price reduction will bring this down by a modest 51 won, with the expected new wholesale price of 1,115 won starting next year.

Lotte Chilsung Beverage, the country's second-biggest soju maker known for the Chum-Churum brand, will also implement lower wholesale prices of soju products starting next year."

Consumers can expect a 4.5 percent reduction in the price of the 360-milliliter bottle of Chum-Churum and a 2.7 percent price decrease for its sugar-free soju Chum-Churum Saero. Although Lotte Chilsung initially raised the prices by 6.8 percent and 8.9 percent, respectively, the company said the actual prices would decrease after reflecting the application of the government's standard sales ratio.

The cut in wholesale prices is likely to impact retail prices, with reductions expected in liquor products sold in hypermarket chains and convenience stores. However, price reductions in products sold in restaurants or bars appear less certain, given the struggling restaurant industry's reliance on liquor sales to offset losses incurred in the food and snacks sector.

BY SEO JI-EUN [seo.jieun1@joongang.co.kr]