South Korea: Beer imports up 4.5% in Q1 2019

Imported beers are expanding their footprint in South Korea as more consumers choose foreign brands over domestic ones due to a mixture of taste and price, the Korea Times reported on April 19.

According Korea Customs Service data, beer imports in the first three months of 2019 were valued at $72 million, a 4.5 percent increase on the fourth quarter of 2018. At this pace, the country may be able to beat the 2018 record.

The 2018 figure reached $397 million, up from $263 million in 2017 and $142 million in 2015.

The government, which is discussing the revision of beer taxes, has been criticized for the "unfair" difference in taxes on domestic and imported brands.

Given it has been only five years since the value of beer imports surpassed $100 million, imported beers are showing explosive growth.

Competition in the market is expected to become fiercer after China's biggest brewer, China Resources Beer, recently launched a new product here.

Industry officials said the soaring popularity of imported beers could be because they are relatively cheap.

Consumers can buy four 500-mililiter cans of imported beer for 10,000 won ($8.80) at a convenience store while a 500-mililiter can of local brands such as Cass or Hite costs 2,700 won.

The officials said this is caused by different taxation on domestic and imported beers.

Domestic beers are levied a 72 percent liquor tax and other taxes on the sum of their manufacturing costs, sales, marketing costs and profit. But imported beers are taxed on the sum of their imported price and tariffs.

An official from the Korea Alcohol and Liquor Industry Association said the tax gap between the two is as much as 20 percent. The official said the market share of imported beers in 2018 grew more than fourfold on that of 2017.

The Korea Institute of Public Finance, a government agency that deals with research and analysis in taxation and finance, is scheduled to release a report on the issue at the end of April. Based on the report, the government is expected to begin working on a revision of the liquor tax.

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