Average Alcohol Prices to Increase by 9.8% Starting from the 18th
The price of ethanol, the raw material used to produce soju, has surged significantly, raising prospects that soju prices may increase once again.
According to the liquor industry on the 19th, Daehan Ethanol Sales raised the price of ethanol by an average of 9.8% starting from the previous day. Following last year's 7.8% average increase in ethanol prices?the first in 10 years?this marks the second consecutive year of price hikes and the largest increase in 20 years since 2002.
Daehan Ethanol Sales is the company that exclusively distributes ethanol produced by domestic ethanol manufacturers within South Korea. Since diluted soju is made by mixing ethanol with water and sweeteners, the ethanol price increase affects all companies equally. This recent ethanol price hike stems from the rising cost of tapioca starch, the raw material used to produce ethanol. Ethanol is made by steaming tapioca, and the increase in tapioca prices along with higher energy costs have contributed to the ethanol price rise.
As ethanol prices rise, concerns about soju price increases are naturally growing. The liquor industry has traditionally addressed cost pressures from rising ethanol prices by raising soju wholesale prices. In fact, when ethanol prices increased last year, soju companies simultaneously announced price hikes. HiteJinro raised prices within ten days, Muhak and Bohae Brewery increased prices within fifteen days, and Lotte Chilsung Beverage followed suit.
This year, with raw material prices rising by about 10%, there are concerns that soju price increases may be inevitable. So far, major liquor companies such as HiteJinro and Lotte Chilsung Beverage are reportedly not considering raising soju prices. HiteJinro stated in a reference document last February that "the company does not plan to raise soju prices for the time being."
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