'Brewing democratization'

By Andrew Salmon

A Korea-related article in The Economist is currently sending sparks of excitement fizzing and crackling across the nation.

Heads have nodded in vigorous agreement. Tables have been thumped. Normally restrained men have startled colleagues by leaping up from up office chairs, bawling "Hear, hear!" And unconfirmed reports indicate that red headbands are being prepared.

Meanwhile I, and at least one other Seoul correspondent, have been kicking ourselves, cursing our laziness for not being the first to pen this important public-interest story, which deals with a subject often discussed when addled foreign journalists gather.

The article in question does not chastise the nuclear brinksmanship of Kim Jong-un; it does not expose the latest corruption scandal; it does not forecast the winner of the presidential election; by George, it does not even mention Psy.

The Economist's journalistic masterpiece covers, instead, a subject far more important than the above: Beer.

Subtitled "Fiery Food, Boring Beer" the story asks questions of central importance to Korea's national competitiveness: "Why the hell does a nation with such a muscular cuisine offer such weak-kneed beer? Beer which, moreover, flows exclusively from the taps of a duopoly of big brewers?"

Indeed. What explains South Korea's undistinguished and indistinguishable boy-scout lagers?

On the one hand, we have a corporate history of incremental innovation rather than blue ocean inventiveness. Early local brews were low-risk, bland lagers, perhaps explaining the same-same quality of Korean suds.

Then there is South Korea's pervasive American influence. As every thirsty traveler knows, those damned Yankees have ruined global beer by infiltrating their flavor-free but masterfully marketed lagers into bar after bar, in nation after nation. Thankfully, in recent years, an American revolution has struck back against the bland imperialism of the big brewers: U.S. home- and micro-brewers are now producing some of the world's best beers.

Alas, the revolution which rescued American ale from historic shame is not replicated in Korea. There are niche bars serving excellent local brews in places like Noksapyeong and Gapyeong but despite their popularity and the increasing spread of imported European beers, their market presence is minute. The two big brewers maintain their duopoly.

Why? The Economist notes that a government-set minimum ceiling on production makes it near impossible for entrepreneurial brewers to distribute, while heavy taxes on imported ingredients murder price competitiveness.

Yet Koreans can and do make tasty, mainstream beer. In this case, I must (with due respect to the National Security Law) bow before the Norks, for I retain fond memories of my first pint in the Koryo Hotel Lobby Bar, Pyongyang, in 2006.

For pub goers unfamiliar with this legendary boozer, it is the "Casablanca" of Northeast Asia: The place where expats, hacks, spooks and Norks gather to verbally joust and exchange guarded info. As I and my colleagues awaited a theatrical haranguing from our minder, a beer was served that proved equal to the occasion: A fine, reddish-brown ale, malty and full-bodied.

Perhaps it is Pyongyang's resistance to Washington's and Seoul's influence that has enabled such a corker of a beer. Whatever, it is the best advertisement I know for dictatorship.

Could there be a beer revolution here? Maybe.

A current campaign slogan is "economic democratization." Big business has been Korea's growth locomotive since the days of Park Chung-hee, but there is growing recognition that chaebol are abusive. They ignore the law, abuse shareholder rights, bully vendors and erect sectoral barriers against small businesses.

I am not suggesting that Korea's big brewers operate like the worst chaebol. But clearly, economic democratization is non-existent in the brewing sector: Just two companies dominate the field nationwide. I cannot think of another advanced economy with such limited choice.

Fortunately, an appropriate local benchmark for improvement exists. Korea's history of Western-style beer goes back only to the late 19th century. (In 1871, one of the first photographs ever taken of a Korean, showed a white-suited gent hefting a bottle of Bass Ale.) A more traditional beverage, makgeolli – which, being brewed from cereals rather than fermented from fruit is, de jure, beer, not wine ― provides the model.

Makgeolli and other traditional tipples faced a bleak future a decade ago. A key driver in their renaissance was alcohol sector deregulation in the 1990s. Minimum production ceilings were lowered, and local brews were permitted to be sold beyond their home provinces, enabling nationwide trade and competition. Today, we reap the fruits of this benevolent policy as hundreds of small brewers churn out craft brews.

If the government lowered the ceiling on beer production, it could release a wave of entrepreneurial Korean microbrewers. Might we see kimchi-flavored pilsners, chili-flavored wheat beers, burnt sesame-infused stouts, or crisp pale ales made with Korean mountain water? Such libation would respectfully complement Korea's powerfully tasty cuisine.

So presidential candidates, take note. On one hand, you face the potential funding power of "big beer." On the other, are arrayed the nation's drinking populace, entrepreneurial businesses and "economic democratization." Choose well.

And while you digest that, let me be the first to nominate The Economist for a Pulitzer. Wassail!

Andrew Salmon is a Seoul-based reporter and author. Reach him at andrewcsalmon@yahoo.co.uk.