'1600 Won per Can' ... Popularity of Malt Beverage Instead of Beer in High Inflation Era

Price of One Can of Hoppju 1600~1800 Won
About 40% Cheaper Than Regular Beer
Classified as 'Other Alcoholic Beverages' with Malt Content Below 10%

[Image source=Getty Images Bank]

[Asia Economy Intern Reporter Kim Gun-chan] The number of people seeking sparkling beer, which is cheaper than regular canned beer, is increasing. Analysts say this is a consumer choice in the 'era of rising prices' to reduce expenses by purchasing affordable products.

The current price of a can (500ml) of sparkling beer on the market is about 1,600 to 1,800 KRW. This is approximately 40% cheaper than regular beer. Unlike domestic beers with a malt content of over 70%, sparkling beer contains less than 10% malt. Representative brands include HiteJinro's 'Filite' and OB Beer’s 'Filgood'.

Sparkling beer is displayed at the convenience store.
Photo by Intern Reporter Kim Gunchan kgc6008@asiae.co.kr

According to the liquor industry, the domestic sparkling beer market size last year was estimated at 360 billion KRW, an 80% increase from 200 billion KRW in 2019. In March, Homeplus's sales of beer and sparkling beer items surged about fourfold, rising 386% year-on-year. Meanwhile, the domestic beer market size decreased by 10%, from 5 trillion KRW in 2019 to 4.5 trillion KRW last year.

As the sparkling beer market grows, the distribution industry is also introducing various sparkling beers to the market. OB Beer, which entered the sparkling beer market by launching 'Filgood' in 2019, recently released the sparkling beer 'OMG (OB Multi Grain)'. As a latecomer, Shinsegae L&B launched the sparkling beer 'Let's Fresh Today' in March. HiteJinro, which launched Korea's first sparkling beer 'Filite' in 2017, has since introduced a diverse Filite lineup.

The reason sparkling beer is cheaper than regular beer is that its malt content is less than 10%, so it is classified as 'other alcoholic beverages' under the liquor tax law. The tax rate for other alcoholic beverages is 30%, which is less than half of the liquor tax imposed on beer and soju (72%). This is why the consumer selling price of sparkling beer can be formed at 1,600 to 1,800 KRW, about 40% cheaper than regular beer.

Recently, a company released a small can (330ml) of sparkling beer priced at 1,350 KRW, which is even cheaper than a can of ion drink (250ml). The price competitiveness of sparkling beer has also translated into sales performance. In 2017, Filite sold 12 cans (355ml each) for 10,000 KRW, and one hundred million cans were sold within six months of its launch.

Beer is displayed on the liquor shelves at a large supermarket. [Image source=Yonhap News]

In this era of high inflation, as sparkling beer is cheaper than regular beer, more consumers are seeking it. Office worker A, who recently tried sparkling beer for the first time, said, "I was able to enjoy a refreshing beer at an affordable price during hot weather," adding, "There are many beers displayed at convenience stores, but given the current tough economy, I think I will look for affordable sparkling beer from now on."

Office worker B, who usually enjoys drinking at home, said about sparkling beer, "Taste is important, but the amount you drink matters too, so I can't ignore the price tag," and added, "Since the price difference with other beers is over 30%, I started looking for sparkling beer because of its affordability amid high inflation."

Experts analyze that the popularity of sparkling beer is due to consumers' desire to purchase cheaper products amid rising prices. Professor Eun-hee Lee of Inha University's Department of Consumer Studies explained, "Consumers currently demand slightly cheaper products in response to rising prices," adding, "They make efforts to reduce expenses by eating convenience store lunch boxes or buying products close to their expiration date."

She further predicted, "Since the economy is expected to remain unfavorable along with rising prices, sparkling beer will continue to receive strong consumer support."