July 09, 2011

liquor love... and a little history...

Drinking is a past time in Korea that is taken somewhat seriously. In average yearly alcohol consumption Korea ranked 12th in the world (using WHO 2005 data, I know it's old but it's the latest data). For most people that rank means nothing, but that position is higher than both England and France (and of course multitudes higher than the US and Canada). If you are more into pictures check out the graphic aid!. It doesn't fully demonstrate their rank, but it's got pretty colours!

While South Korea sits 12th in the world in total alcohol consumption it ranks first in the world In spirit consumption (Spirit: a strong alcoholic drink such as whiskey or vodka). While whiskey is becoming more popular in Korea, the most common, and most enjoyed spirit is soju. I've mentioned soju before, and even shipped some home for my parents, I figure I'll give a (somewhat) researched history of it. Soju dates back to the 13th century and the Mongol invasions of the country. The Mongols learned how to distil from the Persians, and introduced the concept to Korea upon their arrival. Traditionally soju was made from rice, but from 1965 to 1999 the Korean government prohibited soju to be made from rice due to national shortages. This forced soju manufacturers to switch from rice and start using other common starches, such as potatoes. While the ban was lifted in 1999, competition and price battles kept it more economically viable to keep producing it without the use of rice (more on that in the next paragraph).

Soju is often compared to vodka, they share the same clear form, and a bit of the taste, although soju does taste sweeter due to the fact that they add sugar. The alcohol content of soju usually ranges from 18.5% to 45% (where most vodka's are around the 40% mark, another difference). The varying alcohol ranges can be attributed to price. Instead of raising the prices of soju, manufacturers have started to lower the alcohol content. It's because of this practice that the government requires a minimum 40% level for all soju brewed using rice, thus keeping traditionally brewed soju, traditional. Producers of the drink are fine with this, and feel that they have created a new market for the drink with a lower alcohol level. The lower alcohol allows soju to be enjoyed on a broader scale, and lower alcohol content also allows for higher unit sales.

The leader of the Korean soju market is a company called Jinro. The company currently owns a 55% market share, and is the most popular brand in Seoul. It isn't the leader seller in other markets, as soju is often considered a regional drink, and different regions of the country prefer local brands. The competition is rather petty as Jinro owns a 58% market share. Believe it or not, Korea and soju are major players in the world spirit market.

The market share (58%), coupled with the Korean population (approx 48.8 million), and a first place ranking in spirit consumption allows Jinro to become the highest selling spirit brand in the world. It outsells all other spirit brands, such as Smirnoff, Jonnie Walker, and Bacardi in case sales. While the top rank in sales is a great title, Jinro fell on bad times and due to mismanagement in the 90's Jinro was sold to another major player in the Korean alcohol industry in 2006.

Beer is becoming more and more popular in Korean society, and a major player in that market is the Hite Brewery Company. The brand currently produces two of the most popular beers in the nation, Hite and Max are ranked #1 and #3 in sales. These two brands account for 55% of the market share. The portfolio of the Hite Brewery company is impressive, and leads to a literal monopoly of the alcohol industry in Korea. They own Jinro (58% market share in soju), Hite & Max (combining for 55% market share in beer).

The merger of these two companies took place in 2006, and that has since led to The Hite Brewery Company to produce the majority of the nations alcohol. While controlling one liquor industry is not unheard of, Anheuser Busch as an example, no other company in the world dominates both the beer market & the spirit market. Since the merge The Hite Brewery Company has continued to enjoy growth in both sectors, and Jinro has been the leading spirit brand in the world since it`s acquisition.

I have mixed feelings about The Hite Brewery Company. I quickly grew tired of Korean beer after I arrived in Seoul, although I`ve become much endowed with soju. While I`ve made a decent effort to stay away from their beer, my recent enjoyment of soju keeps me coming back. I wrote this post because I feel it`s interesting to know where things come from. I then found it extremely interesting to know that the Korean market is dominated by one producer, and yet price isn`t a concern. Prices for Hite, Max and Jinro are comparable to the other brands in the market, cheap, despite their clear dominance in the industry. I commend this action, and find yet another reason to thoroughly enjoy everything and anything Korean.


  1. I bloody hate soju. But I drink it because it's cheap and gets the job done. Haha. Also when I first came to Korea I loathed the 'girly' Korean beer and really wanted some heavy lagers, but actually I've come to enjoy them. My favorite is definitely Cass for it's crispness and easy drinkability. Cheers mate. Keep on writing.

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