16 · BBII 6/2020
to receive approval, as long as the
modification does not affect safety.
Adding nitrogen to beer to create
a smooth and silky texture will also
be possible after the revision.
Beer imports
in South Korea
Beer imports have steadily risen
in South Korea in recent years.
China is the largest beer exporter,
followed by Japan, Belgium and
the USA. However, year 2019 put a
small brake on the pace of imports.
South Korean beer imports totalled
$281 million in 2019 according
to government import data, down
9 percent from 2018. On a volume
basis, total imports stood at 360
million kilograms, down by 7 percent
as compared to the year 2018
figures.
Among the importing countries,
beer imports from Japan have seen
historic declines during the year
2019 and the first eight months
of the current year. In 2018, South
Korea was the biggest export destination
for Japanese beer makers,
such as Asahi Group Holdings,
Kirin Holdings and Sapporo Holding
Limited. Japan shipped beer
worth Yen 800.34 million (USD
7.3 million) to South Korea during
the year, according to the data
from Japan’s Ministry of Finance.
Boycotts of Japanese brands
by South Korean consumers have
also hit the Japan beer exporters.
In 2019, beer imports from the
United States registered a growth
of nearly 80 percent. The United
States’ exports of beer to South
Korea was US$66.61 million during
2019, according to the United
Nations Comtrade database
on international trade.
Oriental Brewery (OB)
Oriental Brewery, a subsidiary of
AB InBev is the largest brewer in
South Korea. Based on sales revenue,
Oriental Brewery, also called
OB, has around 50 percent market
share of the South Korean beer
market. Oriental Brewery sells the
popular beer brand Cass, which
was the leading beer brand in
South Korea in 2019, as well as
a number of other top selling
mainstream beers, like OB Golden
Lager and Cafri. The company also
distributes international brands like
Lotte Chilsung entered the industry by
launching the ‘Kloud’ brand in 2014.
nounced a plan to revise the current
liquor tax law. Some measures
will go into effect in the third quarter
and others will pass the National
Assembly at the end of the
year. The revision will allow smallsized
craft brewers to mass produce
their products in a can by
consigning manufacturing to large
facilities. An official from Kabrew,
a local craft beer maker, said that
more than 100 small-scale breweries
are welcoming the move as
they can increase production in
cooperation with bigger partners.
Local manufacturers only need
to report changes in the recipe or
alcohol degree instead of going
through complicated procedures
(a 20 percent tax discount) until
the end of 2022, after which it will
be taxed the same as other beer.
The new system taxes domestic
and imported beer brands equally
830.3 won (USD 0.7) per liter,
which makes domestic beer
slightly cheaper, but makes imported
beer more expensive. As a
result of the new initative, imported
beers are expected to register a
steep decline in the current year.
The taxation system until 2019 imparted
imported beers a price advantage
of nearly 20 percent. This
practice forced domestic brewers
to produce a part of their total
production outside South Korea.
The policy change is expected
to benefit higher quality beer, as
higher priced products has seen
the largest decline in liquor taxes.
Under the previous taxation, premium
domestic beers were taxed
higher than cheap beers which discouraged
brewers in South Korea
from selling high quality specialty
beers. Most mass-produced lower
priced beer will see a minimal
change in taxes.
Good news for small
brewers
In May 2020, the South Korean
Ministry of Economy and Finance
and National Tax Service an-
The three large-scale breweries together accounted for nearly 85 percent of beer
sales in 2019.