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CASTLE MALTING NEWS in partnership with www.e-malt.com Ukrainean
20 October, 2020

Brewing news Japan & South Korea: Japan’s Asahi and Kirin facing tough times in South Korea

Japanese beer giants Asahi and Kirin are facing tough times in the South Korean market after being struck dual blows by both the COVID-19 pandemic and local boycotts against Japanese products in general, BeverageDaily.com reported on October 19.

Although the South Korean boycott against Japanese products started over a year ago in response to the ongoing Japan-South Korea trade dispute, little has eased and within the food and beverage industry the strain is showing especially for Japanese beer companies.

“The boycott in South Korea has been keeping going, and the situation is not getting better at all [even after all this while],” Asahi Group Holdings Corporate Communications Manager Kristin Chiu told FoodNavigator-Asia.

“Our beer sales in South Korea is still in a tough situation this year, [and] the COVID-19 situation has also had impact on our sales, although it is currently still difficult to verify the impacts of the boycott and COVID-19. Basically all of our sales channels have been affected.”

Euromonitor data indicates that Asahi’s previous top imported beer spot in the country has been toppled by Chinese beer brand Tsingtao followed by Heineken in second place.

A similar situation was echoed by another Japanese beer megapower, Kirin.

“Kirin has been affected by the boycott issue in South Korea – although we are not able to reveal specific sales volume impacts due to a non-disclosure agreement with our sales partner Hite Jinro there, [there has been impact],” Kirin Holdings Corporate Communication Department spokeswoman Ataka Takashima said.

“[In addition], based on the general market environment, we do not think that COVID-19 has made the situation any better for us either, [even if it may have helped other companies elsewhere boost online sales.

Hite Jinro has also removed all mention of Kirin beer from its website as of October 2020.

The scale of the impact is especially significant because before the boycott commenced, South Korea had been Japan’s top beer export destination at around 60% of overseas shipments and some JPY800 mln (US$7.56 mln) in value according to data from the Japanese Ministry of Finance.

In October last year, total beer exports fell to zero after recording drops of over 90% year-on-year for two consecutive months.

As of August 2020, government statistics site Trade Statistics of Japan indicated that there has been some improvement seen, with over 330,000 litres (JPY31.5 mln / US$297,000) shipped to South Korea – a small fraction compared to pre-boycott levels (August 2018 alone saw 6.5 million litres or JPY643 mln / US$6.07 mln in exports), but enough for some firms to see a bit of light ahead.

“Both on premise (at bars and restaurants, etc.) and off premise (retail) sales are slowly recovering,” Takashima said.

Asahi on the other hand appears to be treading more cautiously and less optimistically, opting to wait it out until things are more settled before attempting to revive currently-halted marketing activities.

“Asahi will be watching the situation carefully and try to earn the sales and market share back once the situation eases,” said Chiu.

The complicated dispute between the two countries was ignited last year over a myriad of factors including the South Korean Supreme Court’s decision over for wartime compensation for Korean workers, further demands for Japan to apologise and compensate wartime ‘comfort women’, and Japan’s supposed retaliation to these by imposing tighter export rules on major materials for high-tech chip manufacturing in South Korea.

The current dispute is widely believed to be the lowest point of Japan-South Korea relations since diplomatic ties were instated in 1965.


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