By Kim Jae-won
The lingering economic downturn is changing liquor sales as Koreans struggling to make ends meet choose cheaper drinks instead of enjoying whisky at expensive bars, official data showed Monday.
According to data from the liquor industry, whisky sales in the local market dropped 13.4 percent to 517,912 boxes in the third quarter from a year ago. Each box contains 18 0.5 liter bottles. It worsened from an on-year decline of 10.1 percent in the first half of this year.
Market watchers said consumers prefer lighter and cheaper alcoholic beverages such as soju and makgeolli, both traditional Korean drinks, to the stronger and more expensive imported whisky due to a prolonged economic downturn. The Korean economy is expected to post mid-2 percent growth this year, about 1 percentage point drop compared to 3.6 percent of 2011.
Diageo Korea, the local arm of the British liquor company, has been hit hardest by the change. The company saw sales of its anchor product Windsor fall 14.7 percent from July to September. Sales of Imperial, a trademark whisky brand of Pernod Ricard Korea, also dropped 11.1 percent during the three months, while those of Lotte Chilsung Beverage’s Scotch Blue fell 11.4 percent.
To brace for the change in drinking habits, liquor firms are seeking to diversify their portfolios by releasing other products, such as beer, wine and vodka. Pernod Ricard Korea, the local arm of the French liquor maker, launched Swedish vodka brand Absolut here a few years ago, which has gained popularity among consumers.
“Sales of Absolut are increasing gradually, compensating for reduced income from whisky,” said a company official.
Diageo Korea also introduced Irish red ale Smithwick’s recently, which is being widely consumed by young, female customers here.
Observers say that abrupt price hikes on whisky brands is also deterring more people from buying them. Diageo raised the wholesale prices of Windsor 12-Year-Old and Windsor 17-Year-Old 5.5 percent to 26,367 won and 40,007 won respectively in September. The price of its premium whisky brand Johnnie Walker Black increased 4.9 percent to 26,368 won.
Some critics say that the decreasing whisky sales are a good signal that the nation’s notorious drinking culture, dubbed as “drink-and-die,” is transforming to becoming more moderate and individualistic.
“The whisky boom in the past relied on the collective Korean drinking habit, which forced people into drinking as much as they could. Now, habits are becoming more reasonable, which is good for the industry in the long term,” said a director of a liquor company on condition of anonymity.