"Will Soju Prices Rise Too?"... Soju Raw Material Alcohol Price Increased for the First Time in 10 Years

Average 7.8% Increase in Soju Raw Material Alcohol Price
Soju Price Hike Becomes Inevitable Due to Manufacturing Cost Burden

[Asia Economy Reporters Song Seung-yoon and Koo Eun-mo] Amid a domino effect of price hikes in the food industry, the price of soju, a representative affordable alcoholic beverage for the common people, is also likely to rise. This is due to a series of increases in various production costs, including key raw materials such as ethanol and bottle caps.

According to the industry on the 7th, Daehan Ethanol Sales raised the price of ethanol by an average of 7.8% starting from the 4th. This is the first price increase in 10 years since 2012. Daehan Ethanol Sales, which sells ethanol to soju companies, is a dedicated sales company established with equity participation from 10 domestic ethanol manufacturers, including Jinro Fermentation.

Taxable ethanol prices increased by 7.6%, from 363,743 KRW to 391,527 KRW per drum (200L). For non-taxable and tax-exempt ethanol, the price rose by 7.9%, from 351,203 KRW to 378,987 KRW.

With the rise in ethanol prices, the increase in soju prices is becoming a reality. The price of soju bottle caps has already increased by an average of 16%, and factors such as the increase in empty container deposits and handling fees are adding to the cost burden for manufacturers. When ethanol prices were raised in 2012, most companies also raised soju prices.

However, the industry is still cautious. Both of the country's two major liquor companies, Hite Jinro and Lotte Chilsung, have drawn a line, stating that no discussions regarding price increases have taken place.

An industry insider said, "It is true that the cost burden of manufacturing is significant due to rising prices of raw materials and manufacturing expenses across all areas in the liquor industry," adding, "We have done our best internally to reduce costs and improve efficiency, but it is very difficult to absorb the increased costs, so we are reviewing various options."