Exports of makgeolli drop sharply

By Shim Jae-yun

Making a dip in the ever increasing popularity of hallyu (the Korean wave), exports of makgeolli decreased to $36.89 million in 2012, down 40 percent from the previous year.

Exports have continued to decline sharply this year, to stand at $7.4 million from January to April, a decrease of 59 percent from the corresponding period last year, according to the Ministry of Agriculture, Food and Rural Affairs.

The ministry attributed the drastic drop to the steady decline in popularity for the rice wine among Japanese consumers amid increasing hostility toward Korea and Korean products, plus the continued depreciation of the Japanese yen.

The Shinzo Abe administration has continued to make provocative acts, eulogizing Japan’s war atrocities, thus aggravating relations with neighboring countries, in particular Korea and China.

Exports of makgeolli peaked with an annual growth rate of 171 percent in 2010, mainly boosted by the ever spreading phenomenon of hallyu. But growth reduced to 100 percent in early 2011 and to 30 percent in 2012.

Worse still, domestic sales of the Korean traditional drink continued to decline, with consumers increasingly opting for imported beers and Japanese sake, according to industry sources.

Statistics Korea said the production of makgeolli reached 393,354 kiloliters last year, down 3.6 percent from a year earlier.

“Though the decrease remains minimal, what matters is that production which had continued to increase for the past several years has begun to decline,” an industry source said.

Industry sources cite the need for the government to take steps to lower price of rice, from which makgeolli is made.

“The price of rice used for makgeolli making stood at 300 won per kilogram last year but it soared to 1,000 won this year, markedly aggravating the profitability of related companies,” said Yoo Cheong-gil, CEO of Gumjung, a makgeolli maker.

Experts also underline the need to diversify overseas markets from predominantly Japan to other countries such as China.

“Fortunately, China has recently taken steps to ease regulations for imports of alcoholic beverages including makgeolli,” a source said.

In addition to the decline in sales, makers have a growing concern over the move to strengthen regulations regarding sanitation and facilities, which would go into effect from July.