June 24, 1999 20:22
With the W2 trillion-per year refreshment market approaching its peak demand season, competition between beverage companies operating in Korea is heating up right along with the temperature. Fierce competition already exists in the market between leaders Coca-Cola, Bumyang Food and Lotte Chilsung, but Cheil Jedang looks to become yet another threat, as it appears to be making headway in its attempt to take over Haitai Beverage.
Local firm Bumyang has been threatening Coca-Cola's traditional dominance of the niche market for colas with its patriotic 815 Cola (August 15 is the date Korea celebrates its liberation from Japanese occupation). Korea's cola upstart has been running ads which take a jab at Coca-Cola by implicitly referring to the cola giant's recent fiasco in Europe, where Coke drinkers became sick after drinking the product. Lotte Chilsung has followed suit, with a negative ad campaign of TV commercials in which a flower petal dropped into a glass of Coke withers, while another one dropped into a glass of Chilsung Cider remains fresh. The ads were pulled, however, following protests from Coca-Cola Korea.
Cheil Jedang has also been getting closer to purchasing Haitai. It had initially proposed a price of W230 billion for Haitai, but after a first-hand asset evaluation, lowered its offer to W180 billion, stirring speculation that the negotiations could meet the fate of the less fortunate petal in the Chilsung ad. On Thursday, however, Cheil Jedang raised its offer to W210 billion and observers believe the deal will go through at a price somewhere near this figure, giving Cheil Jedang a 23% market share for Cheil Jedang, versus Lotte Chilsung's 32% and the 30% share of Coca-Cola.
(Park Yong-keun, email@example.com)
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