South Korea: Small breweries are leaving Seoul

Small breweries in downtown Seoul, which have emerged as "hot people" and changed trends in domestic drinking culture, are leaving Seoul. This is because the recent decline in consumption of traditional liquor and craft beer, which are the main types of small breweries, has become clear, facing management difficulties. It is interpreted that moving to the provinces can reduce rents and even online sales of liquor is possible if a "local specialty owner's license" is obtained, Maeil Business Newspaper reported on June 3.

According to the National Tax Service on the 3rd, the number of stores with small liquor manufacturing licenses in Seoul last year was 87, down 6.5% from 2023. This is the first time that the number of small breweries in Seoul has decreased compared to the previous year since 2020, when related statistics were compiled. A small liquor manufacturing license is a license obtained by a small liquor store that produces and sells traditional liquor or craft beer as it can manufacture takju, spirits, rice wine, fruit wine and beer at a lower facility standard and cost than a general license.

On the other hand, there were 413 stores with small liquor manufacturing licenses nationwide, up 8.7% from 380 in 2023.

Small breweries' departure from Seoul stems from a structural slump in the liquor market. The average monthly purchase of alcoholic beverages fell 2.7 percent last year from a year earlier, according to Korea Credit Data.

In particular, traditional liquor and craft beer, which are the main types of small breweries, are the main types that show the most pronounced decline in alcohol consumption. According to the National Tax Service, the amount of traditional liquor shipments in 2023 was 147.5 billion won, down 9.6% from the previous year. In the case of craft beer, sales of Seven Broglies and Jeju Beer, which are considered the best breweries in the industry, fell 32.3% and 18.5%, respectively, compared to the previous year. The craft beer industry is suffering from an overall slump.

A (36), who moved the brewery from Seongdong-gu, Seoul to Icheon, Gyeonggi-do last year, said, "The rent rises little by little every year, but sales have dropped sharply," adding, "Even in the so-called hot place, it is difficult to find customers compared to the rent." Most breweries are barely holding out with wholesale or online sales, he said.

Smaller breweries are turning to online sales to make up for the offline slump. Online sales are also one of the factors that encourages breweries to "get out of Seoul."

Currently, there are only two liquor manufacturing licenses available for online sale: folk liquor and local specialty liquor licenses. Among them, folk liquor licenses cannot be issued unless they are food masters and intangible cultural properties related to alcohol. Alternatively, to obtain a local specialty liquor license, at least three of the most commonly used ingredients in liquor manufacturing must be used for local products where the brewery is located. It is a difficult condition to meet in Seoul.

Jeong (38), who runs a brewery in Jeonju, North Jeolla Province, said, "It is much easier to supply raw materials for various fruits as well as grains such as rice in the provinces than in Seoul."

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