Soju Price Increase Domino Becomes Reality
Restaurants Engage in Tactical Waiting Over Whether to Raise Prices
"Freeze Prices Considering the Situation," "Decision Pending Trend Report"
'Preemptive Stockpiling' Hoarding Trend Also Emerges
Soju glass. Photo by Getty Images Bank
[Asia Economy Reporter Song Seung-yoon] "What can we do when everything is going up? We have to keep up too..." Around 7 p.m. on the 21st, in a busy area of Dongan-gu, Anyang-si, Gyeonggi Province. Upon entering a barbecue restaurant, tables with soju and beer bottles were noticeable here and there despite the relatively early hour. This restaurant was selling soju at 4,000 won per bottle. Although the wholesale price of some soju brands will rise starting the 23rd, the increase has not yet been reflected in the selling price. When asked the staff, "When will the price of soju go up?" the staff replied, "The wholesale price is going up starting this week, but we haven't decided whether to raise the selling price yet," adding, "Even today, we've received several questions about the soju price, so customers seem sensitive to the price increase."
With the reality of soju price hikes beginning with Hite Jinro, the number one company in the soju industry, the 'mind games' among self-employed business owners over the selling price of soju in restaurants have also begun in earnest. Although no significant changes are yet visible, there is a sense that preparations for price increases are underway in various places. Among 30 restaurants and bars checked in the Seoul metropolitan area including Seoul, Incheon, and Gyeonggi, about 8 places have decided to raise or will gradually raise soju prices, while the rest have either decided not to raise prices or have not yet decided. Most self-employed owners expect the maximum selling price to be around 5,000 won even if they raise the soju price.
On the other hand, quite a few places have decided to keep the selling price unchanged despite the price increase, fearing a decrease in customers. Many are waiting to observe the trends of nearby stores before deciding whether to raise prices later. Accordingly, even after the wholesale price increase, it is expected that the existing stock will be sold off for a while before restaurant selling prices gradually rise. Many owners worry that if they raise prices immediately, customers might stop coming or they might face severe backlash.
In online communities where self-employed business owners gather, debates over whether to raise soju prices have recently been intense. Kim Jae-hyun (39, pseudonym), who runs a sashimi restaurant in Suwon-si, Gyeonggi Province, said, "Including my store, nearby owners are hesitant to act rashly because they fear being labeled as greedy," adding, "If the wholesale price goes up, we will eventually have to raise prices, but I worry whether we can do that in the current situation." Given this situation, some self-employed owners have started stockpiling larger quantities than usual before the official price hike begins. Choi Jae-han (34, pseudonym), who runs a beef tripe restaurant in Haeundae-gu, Busan, said, "I bought more soju than usual that is expected to increase in price," adding, "I plan to sell this without raising prices for a while."
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