The OB Beer Strike Scheduled for Next Month 1st Likely to Be Postponed
Wage Negotiations Still at an Impasse... Strike to Materialize if Talks Fail
Concerns Over Beer Supply Disruptions Ahead of Summer Peak Season
[Asia Economy Reporter Song Seung-yoon] The strike planned by the OB Beer labor union for the 1st of next month is now likely to be postponed for the time being. However, concerns remain that the supply of alcoholic beverages might be disrupted ahead of the peak summer season, as the biggest disagreement over wage negotiations has yet to be resolved.
According to industry sources on the 30th, the OB Beer labor union under the Korean Federation of Chemical Workers' Unions is expected to meet with management on the 1st of next month, the originally scheduled strike date, to resume wage negotiations. The union had previously resolved to begin a strike from that day due to the breakdown of wage talks with management. Among the three factories located in Gwangju Metropolitan City, Icheon in Gyeonggi Province, and Cheongju in Chungbuk Province, strikes at the Gwangju and Icheon factories had been confirmed, while participation at the Cheongju factory was to be decided later.
From OB Beer's perspective, the immediate crisis has been averted, but the issue remains unresolved. Previously, OB Beer proposed a 5% wage increase and a 2.3% increase in welfare expenses, while the union demanded a total 24% increase, including a 10% wage hike and a 14% increase in welfare expenses, failing to narrow the gap. Last year, OB Beer and the union agreed on a 2.1% wage increase and a 3 million KRW bonus. In 2020, they agreed on a 2.5% wage increase and a 700,000 KRW bonus.
If the strike proceeds from the scheduled date, disruptions in beer supply are inevitable. The two factories produce nearly 70% of OB Beer's total products. Last month, OB Beer’s beer shipments dropped to about 20% of normal levels due to a strike by the Cargo Solidarity Union. At that time, shipments were difficult, but this time production itself may be affected.
Given the situation, liquor wholesalers are actively securing inventory in advance. OB Beer is not currently increasing production but is preparing various contingency plans in case the strike prolongs. With the peak summer season approaching, when beer demand is high, the company plans to focus all efforts on improving shipment rates and reaching a smooth negotiation.
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