Beer sees steepest price hikes since 1998 financial crisis

Beer products are displayed at a local discount store in Seoul, Jan. 17. (Yonhap)

Beer prices at restaurants saw the steepest price hikes last year since the 1998 financial crisis, according to the Korean Statistical Information Service on Tuesday.

The consumer price index for beer products at restaurants increased to 114.66 points last year, up 6.9 percent from a year ago. The growth rate was the highest since the 1998 financial crisis when the CPI for beer soared by 9.7 percent.

In the meantime, the prices of beer products sold at discount or convenience stores saw 2.9 percent growth on the CPI.

Soju, the nation’s popular distilled liquor, also showed steeper price hikes at restaurants (7.3 percent) compared to those sold at retailers (2.6 percent).

Its CPI growth rate was the highest figure after 11.7 percent growth in 2016.

When it comes to soju, retail prices have fallen by about 10 percent from this year as the government mulls easing taxes for domestically produced alcoholic beverages.

Starting on Jan. 1, HiteJinro, the nation’s largest soju maker, cut factory prices of soju products by 10.6 percent. Now its Chamisul and Jinro, the two bestselling soju brands, are supplied to wholesale retailers at 1,115 won per bottle ($0.84), down from 1,247 won.

It remains to be seen whether soju prices at restaurants and bars could be lowered for now.

“Restaurants tend to maintain their liquor prices even if liquor companies cut their prices. It seems difficult for them to cut prices because they have to handle growing expenses amid prolonged inflation,” said an industry source who wished to remain anonymous.

By Shim Woo-hyun(ws@heraldcorp.com)