Gov't to Open Alcohol Market to Smaller Producers

      September 30, 2009 09:03

      Regulations on beer and soju will be eased so that smaller alcoholic beverage producers from around the nation can bring some diversity to the market, just like Germany's beer and Japan's sake markets.

      The government on Tuesday said it will relax standards for obtaining a license to produce alcohol in the second half of next year. Currently in order to get a license to make beer, brewers must have a facility capable of producing at least 1,850 kl of beer annually, which is over 3.7 million 500-ml bottles. Soju distillers must be able to make 130 kl a year, or 360,000 360-ml bottles.

      Because of these rules the domestic alcohol market has been dominated by a few large companies for decades. The beer market has been virtually monopolized by two or three companies, despite growing complaints among Korean consumers of the taste and price of domestic beer. The lowered barriers should allow small and mid-sized local brewers and distillers to enter the market, likely increasing efforts to improve the taste and fueling price competition.

      In 2004 Japan changed its regulations for brewers from a required capacity of 2,000 kl to 60 kl, and the country now has over 270 brewers adding diversity to the market.

      An official at the Fair Trade Commission said the new measure will open the way for various kinds of local beers with different flavors and levels of alcohol content, and spur price competition.

      The government finalized a set of deregulation measures in a meeting of the Presidential Council on National Competitiveness presided over by President Lee Myung-bak on Tuesday.

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