Lotte Chilsung Raises Soju Prices... "Ex-Factory Price Will Fall If Tax Reduction Is Reflected"

January 1 Export Prices: Cheoeumcheoreom Up 6.8%, Saero Up 8.9%
Taxes Lowered, Cheoeumcheoreom Down 4.5%, Saero Down 2.7% at Release Price

Lotte Chilsung Beverage will raise the ex-factory prices (including manufacturing cost, sales expenses, and profit) of soju products such as "Cheoeum Cheoreom" and "Saero" starting January 1 next year. The price of Cheoeum Cheoreom (360ml bottle) will increase by 6.8%, and Saero (360ml bottle) will rise by 8.9%.

On the 18th, Lotte Chilsung explained the reason for the price increase, stating, "We reflected the cost burden increase due to rising raw material prices such as ethanol, auxiliary materials including empty bottles, logistics costs, and labor costs." They added, "We have restrained from raising ex-factory prices this year and endured maximum management pressure to participate in the government's price stabilization policy."

In fact, Hite Jinro raised the ex-factory prices of its soju brands Chamisul Fresh and Chamisul Original by 6.95% starting from the 9th of last month, and regional soju companies such as Muhak, Bohae Brewery, Daesun Brewery, Mackis Company, and Hallasan also followed suit with price increases. However, Lotte Chilsung Beverage had delayed raising prices for more than two months.

Lotte Chilsung's soju ex-factory price increase coincides with the application of the standard sales ratio introduced by the National Tax Service. As a result, compared to before, the ex-factory price of Cheoeum Cheoreom will be 4.5% lower, and Saero will be 2.7% cheaper. The standard sales ratio is a kind of tax discount rate that reduces the taxable base used to calculate liquor tax; the higher the standard sales ratio, the smaller the taxable base, resulting in lower taxes. The National Tax Service has set the standard sales ratio for domestic soju at 22%, which effectively lowers the ex-factory price of soju by about 10%.

Lotte Chilsung decided not to raise the prices of beer products (Cloud, Crush). Lotte Chilsung stated, "To participate in the government's price stabilization policy and minimize consumer burden, we plan not to raise the ex-factory prices of other alcoholic beverages including beers such as 'Cloud Original,' cheongju like 'Cheongha,' and fruit wines such as 'Lemon Jin.'"

Starting January 1 next year, products such as whiskey, which will also be subject to the standard sales ratio along with soju, will see a decrease in ex-factory prices. Whiskey prices will drop by about 11.5%, and liqueurs and general distilled spirits will be reduced by 9 to 10%.