When Business Was Booming... The Alcohol Industry Trapped by 'Level 4 Social Distancing'

Crisis During Peak Beer Season
Social Distancing Level 4 Enforced
Sales Reps Work from Home and Office

All Marketing Focused on 'Home Use'
HiteJinro and OB Lower Prices
Lotte Chilsung Launches New Carbonated Alcoholic Beverage

On the first day of Level 4 social distancing in the Seoul metropolitan area on the 12th, the streets of Hongdae in Mapo-gu, Seoul, are quieter than usual. Under the Level 4 measures, gatherings of up to 4 people are allowed before 6 p.m., and only up to 2 people are allowed afterward. Photo by Moon Honam munonam@

[Asia Economy Reporter Seungjin Lee] Although the summer season, the peak season of the year, has arrived, the liquor industry is facing deep concerns. Salesmen who usually have to run around every evening to promote sales are all working from home. This is because the anticipation for vaccination has turned into anxiety over the COVID-19 Delta variant.

Liquor Industry Salespeople Are ‘Working from Home’

On the 15th, major liquor companies such as OB and HiteJinro implemented work-from-home and internal office work for some sales staff. Normally, summer is the time when salespeople go around various commercial districts to conduct sales activities, but with the implementation of Level 4 social distancing, all activities have come to a halt. A liquor industry official explained, "Even before the social distancing level was raised, sales activities were already shrinking due to concerns about the spread of COVID-19, but after the upgrade to Level 4, we decided to minimize face-to-face sales activities as much as possible."

According to the convenience store industry, last week, sales of hangover relief products at stores located in entertainment districts dropped by 50.1% compared to the same period last year. Although there are still people who visit pubs with friends or lovers instead of noisy gatherings, many dining establishments are only operating during lunch hours to save on labor costs, resulting in a sharp decline in liquor sales.

Price Reduction Competition as Home-use Liquor Increases

The decrease in liquor consumption in the entertainment market has directly shifted to home use. According to E-Mart, from the 7th to the 13th, sales of soju and beer increased by 11.1% and 7.1%, respectively, compared to the same period last year. It is analyzed that this trend will continue as the spread of COVID-19 persists. The liquor industry is focusing on targeting the home market. OB Beer and HiteJinro have entered into a price reduction competition.

HiteJinro is lowering the price of its 500ml can of beer, Terra, by 15.9% from today. The 500ml canned beer is the most demanded product for home use. Following the release of the limited edition product ‘Terra X Smiley’ for its 2nd anniversary at a lower price than the regular product, the company has now reduced the price of the regular product as well.

OB Beer also introduced a price reduction strategy for home-use products. OB Beer launched the Cass value pack, which contains eight 375ml cans priced lower than the 355ml products, effectively reducing prices with the home market in mind. Last month, they also reduced the ex-factory price of the 500ml canned rice beer ‘Hanmac’ by 10%.

Lotte Chilsung Beverage, considering the increased home liquor consumption and the expanded variety of choices, has launched a new fruit carbonated alcoholic beverage called ‘Hard Seltzer,’ which mixes alcohol with carbonated water and adds fruit flavors. Following the release of the fruit carbonated beverage ‘Soonhari Lemon Gin’ in May, Lotte Chilsung Beverage is preparing to launch another new product.

A liquor industry official said, "This summer, all marketing efforts have shifted to home use as a market response," adding, "The entertainment market will be monitored and responded to according to the COVID-19 spread situation for the time being."

This content was produced with the assistance of AI translation services.