'4 Cans for 10,000 Won' Not Seen... Beer Prices Rising Smoothly

Jeju Beer 3 Types Up 10%
Imported Beers Also Raised
4 Cans for 10,000 Won Event Removed or
Price Adjusted to 11,000 Won

April Liquor Tax Increase 5 Times
Industry "Raw Material and Logistics Costs Up, Price Hike Inevitable"

Various canned beers are displayed. This is not directly related to specific expressions in the article.

[Asia Economy Reporter Seungjin Lee] As grocery prices have been rising one after another since the new year, beer prices are also set to increase. This is due to the sharp surge in prices of key raw materials such as malt and hops. Additionally, with the liquor tax set to increase from April, it is expected that beer prices will rise overall.

Jeju Beer Raises Supply Price by 10%

According to the liquor industry on the 11th, Jeju Beer will raise the supply price of three products?‘Jeju Wit Ale, Jeju Elong Ale, and Jeju Geomeong Ale’?by 10% starting February 1. Jeju Beer stated, "Despite the price increases of major raw and subsidiary materials and the surge in logistics costs, we have actively suppressed price hikes by striving to improve efficiency to reduce other costs and have maintained the supply price." They added, "However, due to the can price increase applied since October 1 last year, the sharp rise in prices of key raw materials such as malt and hops, and the continuous increase in logistics costs, we judged that it is impossible to maintain profitability at the existing prices."

With the supply price adjustment, the 355ml can price will increase from 1,400 KRW to 1,540 KRW. As the supply price rises, retail prices are also expected to increase. Currently, the price of a 500ml can of Jeju Geomeong Ale at convenience stores is 3,500 KRW, and with a 10% increase, the price per can will approach 4,000 KRW.

The price increase by Jeju Beer is drawing attention as it may trigger a domino effect of price hikes in the beer market. The prices of imported malt and hops used in beer have started to surge since last year, causing many liquor companies to complain about cost burdens. Jeju Beer holds the number one market share in the craft beer market, and competing companies, who have been cautious despite cost pressures, are likely to follow suit and raise their prices.

The Disappearance of ‘4 Cans for 10,000 KRW’

Beer prices showed signs of increase starting last year. Some imported beer brands have either withdrawn from the ‘4 cans for 10,000 KRW’ promotion mainly held at convenience stores and large supermarkets or adjusted the promotional price to 11,000 KRW. Since beer consumption in the home market is most significant during the ‘4 cans for 10,000 KRW’ promotion, this effectively meant a price increase.

Heineken Korea, the top importer of beers such as Heineken and Edelweiss, raised the promotional price from 10,000 KRW to 11,000 KRW as of December 1 last year. Following this, at the end of December, OB Beer raised the price of Budweiser, Stella Artois, Hoegaarden, which it imports and sells, as well as Hite Jinro’s Blanc 1664 and San Miguel from Sanmi Sangsa, to 11,000 KRW for 4 cans. With Jeju Beer starting to raise domestic beer prices, the industry expects that the ‘4 cans for 10,000 KRW’ discount promotion will soon disappear.

Liquor Tax Increase in April, Prices to Rise Further

The government’s plan to raise liquor taxes on beer and Makgeolli (Takju) from April is causing deep concern in the liquor industry. The liquor tax on beer has been set at 855.2 KRW per liter, an increase of 20.8 KRW (2.49%) compared to last year. The liquor tax on Makgeolli has increased by 1 KRW (2.38%) to 42.9 KRW per liter. This year’s increase is five times the level of last year’s.

The liquor industry is currently reviewing whether to raise prices. While the policy is to minimize price increases considering consumer price inflation, the combination of soaring raw material costs and liquor tax burdens is pushing opinions toward price hikes. If prices increase, products supplied to the entertainment market are likely to see higher price increases than those in the retail market. Considering that the increase in the ex-factory price usually exceeds the liquor tax hike, beer currently sold at 4,000 KRW per bottle in bars could rise to 5,000 KRW.

An industry official explained, "Due to the impact of COVID-19, prices have risen not only for imported raw materials like malt and hops but also for logistics and can prices. With the liquor tax rising significantly more than last year, the possibility of price increases has grown."

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