[Report] "Only Protecting Delivery Vehicle Parking"… Liquor Wholesale on the Verge of Collapse

Restaurants and Pubs Closing in Droves, Last Year's Sales Halved
Number of Closed Businesses Doubled Last Year: "Worst Hardship Period"
Delivery Vehicles Reduced by Half, Mandatory Days Off Enforced
Shop Owners Facing Months of Losses, Struggling to Collect Debts

Delivery vehicles are lined up at the warehouse of an alcoholic beverage wholesaler located in Goyang-si, Gyeonggi Province.

[Asia Economy Reporter Lim Hye-seon] "Seven businesses located in the back alley of Hamilton Hotel in Itaewon suddenly closed down. This is the first time in 20 years that something like this has happened. We are standing on the edge of a cliff."

Bae Seong-jun (49), CEO of Mandu Distribution, a large liquor wholesale company located in Goyang, Gyeonggi Province, said, "As the COVID-19 crisis prolonged, self-employed business owners were devastated, and wholesale companies also collapsed." Around 2 p.m. on the 29th, trucks were lined up at the Mandu Distribution warehouse. Usually, vehicles arrive late in the afternoon, but they had already completed deliveries and returned. Inside the warehouse, liquor was piled up in abundance.

The Collapsing Liquor Market Ecosystem

The liquor market ecosystem is collapsing. As social distancing continues, retail stores such as pubs and restaurants are closing, leading to a sharp decline in sales for liquor wholesalers. According to the liquor wholesale industry, about 10% of the 140 liquor wholesalers nationwide have closed this year. Except for the top 20% of large wholesalers, most companies are on the brink of collapse.

CEO Bae said, "Every morning I hear news of closures," adding, "Last year’s annual sales were halved, and this year the situation is even more severe." He continued, "Entertainment establishments like pubs and draft beer houses open at 6 p.m. and operate for only 3 to 4 hours?how can they generate sales?" He also noted, "The number of businesses temporarily closing has nearly doubled compared to last year." In fact, in the Hongdae commercial district, delivery vehicles have decreased from 3 to 1.5. The ordering period for alcohol has lengthened, and order volumes have decreased compared to before.

Employees Turning to Food Delivery Amid Livelihood Threats

The livelihoods of wholesale company employees are also under threat. As cargo volume decreases, the number of workers per delivery vehicle has also been reduced. Typically, liquor delivery vehicles operate with two-person teams. Currently, most wholesalers have one person per vehicle for deliveries. Additionally, mandatory holidays of 1 to 2 times per week are being applied. CEO Bae said, "Our company abolished mandatory holidays, but 90% of wholesalers still maintain this policy," and lamented, "Since there is less work, employees’ salaries are naturally cut, and employees are leaving for platforms like Baedal Minjok and Coupang."

CEO Bae stated, "This year’s sales have dropped to half of last year’s," adding, "We have been running deficits for several months, and it is difficult to collect receivables." As distribution circulation becomes difficult, wholesalers are anxious. Restaurants are enduring zero sales, facing the worst lean season. Restaurants need to operate to make money, and with that money, they can pay wholesalers. CEO Bae pleaded, "We need to collect existing receivables, but since restaurants are generally struggling, we have no choice but to wait. Self-employed business owners must survive for wholesalers to recover."

Small and medium-sized wholesalers based in Seoul are selling their homes to endure the situation. One CEO said, "I recently sold my house to pay off debts," and lamented, "There are over 3,000 types of alcohol, but small and medium wholesalers mainly rely on soju and beer sales, so they have to compete on price, making it even harder."

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