Foreign liquor companies in Korea are increasingly reeling from plunging sales in recent years, data showed Friday.


According to global liquor research institute IWSR, South Korea’s whiskey sales recorded 1.66 million boxes last year, a fall of about 1.18 boxes from 2007. For whiskey, a box equals to 9 liters of liquor. 

By whiskey type, sales of blended Scotch whisky -- Ballentine's, Johnnie Walker, Royal Salute -- saw the biggest drop. Since 2007, the sales volume has decreased by more than 60 percent, from 2.75 million boxes to 925,500 boxes last year.

Malt Scotch whisky, produced with 100 percent barley or malt, in contrast, more than doubled from 34,000 boxes to 78,000 boxes during the same period. Signature malt scotch whisky include Glenfiddich and Macallan.

Industry insiders said the declining whiskey consumption in recent years came amid the growing “well-being trend” among Koreans, who tend to drink less strong liquor. 

The introduction of the anti-graft law -- dubbed the Kim Young-ran act -- in 2016 has also led to a reduced reception culture, or jub-dae in Korean, impacting whiskey sales, they added. 

According to Diageo Korea, the distributer of Johnnie Walker and Windsor, it recorded 56.8 billion won ($51 million) of operating profit from July 2016 to June 2017, down 57 percent over the past decade. 

The local unit of France-based Pernod Ricard, known for its Balentine's and Imperial whiskey brands, saw sales fall by 12 percent in the 2016 fiscal year, compared to a decade ago. Its operating profit also slipped 10 percent on-year.

The weak performance of whiskey firms has led to efforts to cut down on costs, with some companies moving out from the affluent downtown Gangnam district.

Diageo Korea said it will soon relocate its office to Yeouido in northwestern Seoul, a less expensive area. Johnnie Walker House Seoul, an exclusive membership bar in Gangnam, will close down after five years of operation, it added.

For similar reasons, its rival Pernod Ricard Korea moved from Gangnam to Yongsan last year. 

“Amid the changing business landscape, liquor companies are striving to change in order to pull up sales by actively promoting their subbrands such as beer brands, or luring consumers by launching limited edition labels,” said an industry insider.

(ddd@heraldcorp.com)