Price hikes of Korean vodka to squeeze working class

By Choi Sung-jin

Soju is often called the best friend of low and mid-income Koreans, as they drink the cheap distilled liquor in joy and sorrow. From now, it will cost far more for these working-class people to relieve their daily stress. 

Hite Jinro says it will raise the factory price of its Chamisul (True Dewdrops) brand by 54 won (five cents) a bottle from this month. 

When added to the 77 won increase in handling charges of empty bottles, as considered by the government, it will push up the brand's price by 130 won at supermarkets by the end of January. That in turn will translate into price increases of 1,000 won, or even 2,000 won, at restaurants and bars if experience is any guide, industry sources said. 

Other smaller distillers will likely follow the example of Hite Jinro, which means drinkers who now pay 3,000 won for a bottle of soju at drinking places will have to spend up to 5,000 won on the same bottle. 

Hite Jinro says the price hike is inevitable to reflect accumulated cost-push factors in manufacturing and marketing. "We have to increase the price by up to 12.5 percent to absorb the rise of raw material prices, packaging costs and distribution expenses but tried to minimize the actual price hike," a company official said. 

Lotte Liquor, the distiller of Cheoeum Cheoreom (Like the First Time), the other of the two most popular brands, said it has no plans to raise prices yet. 

Various taxes, such as the liquor tax, education tax and value-added tax, account for more than half the store price of soju, and the price increase of soju will lead to a revenue increase for the government. The Park Geun-hye administration, which nearly doubled tobacco prices earlier this year, will likely come under public criticism again for increasing the tax burden on working-class people.