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Soju, beer prices set to rise again

Posted February. 20, 2023 07:34,   

Updated February. 20, 2023 07:34


After collective hikes of soju and beer prices last year, the prices of alcoholic beverages are on a course to rise again this year. The price hikes result from an increase in alcohol tax and rising production and bottling costs caused by soaring energy prices. Watchers say that the price of soju sold at restaurants could reach almost 6,000 won (about 4.6 U.S. dollars) per bottle.

According to the economy and finance ministry on Sunday, the alcohol tax on beer will increase by 30.5 won (2 cents) to 885.7 won (68 cents) per liter from April this year. The hike in alcohol tax is larger than a 20.8-won (1.6 cents) hike per liter that was raised last year. A hike in alcohol tax on beer could spark cascading hikes of factory prices by alcoholic beverage suppliers. Last year, Hite Jinro raised the factory price of their Terra beer by 7.7 percent, while Lotte Chilsung Beverages hiked the factory price of their Cloud beer by 8.2 percent.

As for soju, the alcohol tax will not be hiked, but soju is also under mounting pressure for a price hike due to rising materials and energy costs.

In February last year, spirit suppliers raised the price of ethanol, a key ingredient of soju, by 7.8 percent, for the first time in 10 years. If spirit companies facing financial crises choose to hike spirit prices further, there is a strong chance the soju price will be raised further. Moreover, the supply price of empty soju glass bottle has been hiked by more than 20 percent from 180 won (13.8 cents) per bottle to 220 won (16.9 cents).

The alcoholic beverage industry says price hikes are inevitable. “We are internally discussing plans to hike prices because we are facing many factors for a price hike including jumping materials costs, on top of alcohol tax,” an industry source said. “However, because both soju and beer are items whose prices are sensitive for working-class people, we cannot make a hasty decision.”

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