Domestic Craft Beer Prices Also Increased... The Wave of Beer Price Hikes Begins in Earnest

[Image source=Yonhap News]

[Asia Economy Reporter Song Seung-yoon] Following the lead of OB Beer, which initiated a wave of beer price increases, domestic craft beer companies have also joined the price hike trend. According to the industry on the 3rd, domestic craft beer companies began raising prices starting from the 1st. Vaneheim Brewery, which has been producing craft beer since 2004, raised the price of its rice beer ‘Dodam Dodam’ by 5.9% from that day.

Amazing Brewing, which has recently released popular products such as ‘Jin Lager’ made in collaboration with Ottogi Jin Ramen, also raised the prices of canned beer products like ‘First Love IPA,’ ‘Milttang Weizen,’ ‘Amazing Lager,’ and ‘Seongsu-dong Pale Ale’ by 13.7% to 16.7% starting that day.

Competitors are also expected to join the price increase soon. HiteJinro, which sells ‘Hite’ and ‘Terra,’ and Lotte Chilsung Beverage, which sells ‘Kloud,’ have cited factors for price increases but have not yet made any decisions. However, since the industry leader has already raised prices, the price hike itself is becoming a foregone conclusion.

The main reasons for the beer price increase include rising costs of raw materials and supplies used in beer production, as well as the upcoming liquor tax hike starting next month. With the application of the revised Liquor Tax Act from next month, the liquor tax on beer will increase by 20.8 KRW per liter to 855.2 KRW. Last year’s tax law revision linked liquor tax to the consumer price inflation rate, reflecting the 2.5% annual consumer price inflation rate, the highest in 10 years as of last October.

As with soju, if beer prices rise consecutively, it is highly likely to affect self-employed business owners as well. Following the realization of price hikes in the soju industry, HiteJinro raised the ex-factory prices of soju products such as Chamisul and Jinro by 7.9% starting from the 23rd of last month, and other companies including Muhak, Bohae Brewery, Hallasan Soju, Lotte Chilsung Beverage, Geumbokju, and Daesun Brewery also raised prices one after another. As a result, the prices of soju sold in restaurants and pubs are gradually increasing. Since beer bottles are mainly sold through restaurants and pubs, the selling prices at these establishments inevitably rise when factory ex-factory prices increase.

An industry insider said, "With the Liquor Tax Act revision imminent, it is highly likely that this price increase will occur simultaneously across the board," adding, "With the logistics costs of essential raw and subsidiary materials such as malt and aluminum rising sharply, no company can bear these costs any longer."

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