Tax agency promotes exports of Korean traditional alcohols

Visitors to a liquor store in Seoul take a look at whisky bottles, March 21. Yonhap

By Lee Min-hyung

The National Tax Service (NTS) has launched a council dedicated to promoting exports of Korea's traditional alcohols, in a bid to tackle a rising liquor trade deficit, the tax agency said Tuesday.

The K-Liquor Promotion Council pledged to rebrand the identity of Korean alcohols by developing proper naming that can better represent all the exported alcoholic products. The decision reflects the growing worldwide popularity of K-pop and other forms of Korean pop culture products. The NTS said Korean alcoholic beverages can also join the global bandwagon, but the lack of a cohesive brand identity has blocked Korean alcohol from gaining traction abroad.

Toward that end, the government and private sector will join hands to build a co-prosperous environment, not just for big companies, but also minor ones that are selling traditional and lesser-known alcoholic drinks, the agency said.

The NTS said it plans to encourage large firms to engage in marketing collaboration with minor liquor producers when the former exports their products.

Data showed that liquor imports have soared for the past few years, during the COVID-19 pandemic, but local ones failed to extend their footing abroad due to a general lack of awareness by consumers there. In 2019, liquor imports reached 1.02 trillion won, but the figure soared to 1.72 trillion won last year, according to NTS data.

However, exports of local liquor products did not report outstanding growth during the same period. Liquor exports amounted to 404.7 billion won as of 2019, but declined to 324.3 billion won in 2020 and 325.7 billion won in 2021 before bouncing back to 397.9 billion won in 2022.

Despite the slight recovery of exports, the top ten-largest firms accounted for 81.1 percent of total liquor exports, with small traditional liquor producers losing more ground to bigger players.

Most small liquor producers want to sell their products abroad, but said a lack of a network and infrastructure has prevented them from making inroads into non-Korean territories, according to a survey that the agency conducted on 1,006 officials from the nation's small- and medium-sized alcohol makers.

According to the survey, the biggest obstacle they face is a lack of information and experience in overseas markets. They also cited a lack of government support as the second reason behind their failure in exporting their products.

National Tax Service (NTS) Commissioner Kim Chang-ki, front row fifth from left, poses with food chain entrepreneur Paik Jong-won, front row sixth from left, and other members of the council for the promotion of traditional alcohol exports at the council's launch ceremony in Seoul, Tuesday. Courtesy of NTS

Members of an advisory panel for the council include food chain entrepreneur Paik Jong-won and Korean whisky pioneer Kim Chang-soo.

Paik has advised the government to offer more tax benefits and help boost investment in traditional alcohols.

“Tax authorities should provide more tax support for traditional alcohol products, so they can gain more global competitiveness, and introduce new forms of investment (for sustainable growth of the market),” Paik said.