"Wines Stocked in Warehouse"... Wines Cheaper Than Two Years Ago

Despite High Exchange Rates, Oil Prices, and Interest Rates, Sales Prices Drop
Due to Accumulated Wine Inventory at Sellers... "Reducing Stock to Secure Cash"

After the endemic, demand for wine has plummeted, leading sales channels to clear out their wine inventories. Large supermarkets with significant wine sales are trying to clear out their wine stock through wine events in the second half of the year, even if it means leaving little margin.

According to the distribution industry on the 16th, large supermarkets are starting their second half wine events, beginning with E-Mart. E-Mart will hold a 'Wine Market' for a week until the 18th, offering discounts on about 1,000 types of wine. Large supermarkets are preparing opportunities to purchase wine cheaply by dividing events into the first and second halves of the year. Lotte Mart also plans to hold a 'Shareholders' Meeting' for two weeks starting this Thursday, and Homeplus will conduct a wine discount event next month.

What stands out in this year's wine events is that more wine is offered at lower prices compared to past events. Looking at the wine list featured in E-Mart's Wine Market, the 'Textbook Cabernet Sauvignon' produced in Napa Valley, USA, was sold for 50,000 won during the 2021 Wine Market when the wine boom was at its peak, but now it is priced at 45,000 won. Despite nearly a 20% increase in import prices due to rising logistics costs from high oil prices, increased labor costs, and a high exchange rate, the selling price has become cheaper than two years ago.

Also, the Chilean red wine 'Santa Rita Triple C' is priced at 29,520 won, whereas two years ago it was close to 40,000 won during the event. It is about 10,000 won cheaper than two years ago. The 'Fontodi Chianti Classico' from the Chianti Classico region in Italy has also dropped from 38,000 won to 35,800 won.

The reason wine prices have dropped is that wine demand sharply decreased this year, causing sellers' warehouses to accumulate wine inventory. Due to the economic downturn, consumption of relatively expensive wine compared to soju and beer has declined, while the highball craze has led more consumers to seek whiskey. In fact, according to the Korea Customs Service import-export trade statistics, the import volume of wine under 2L from January to September was 32,240 tons, down 24.5% from 42,709 tons in the same period last year, and wine import value sharply dropped 15% to 299.59 million dollars during the same period.

The price decline has been concentrated on wines priced between 30,000 and 50,000 won. During the COVID-19 home drinking boom, consumers preferred wines in this price range as an entry-level or regular choice, leading sellers to significantly increase their order volumes. A liquor industry official explained, “High-priced wines have limited production quantities and are premium-grade, so they were not affected by price drops, but the situation is different for wines with relatively low recognition. Accumulated inventory means company funds are tied up, and large supermarkets will likely try to reduce inventory through wine events.”

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