The price of soju or traditional distilled liquor will go up 12.12 percent for the next two years, while the price of beer will fall 5.97 percent in 2006 and 10.74 percent in 2007. As a result, the manufacturer’s price of soju and beer will stand at W897 for both in 2007, with retail prices also similar.

Tax on soju, known as the working man’s tipple, already rose from 35 percent to 72 percent in 2000. If it goes up to 90 percent next year, it will have nearly tripled over six years and is therefore likely to incur an intemperate response from ordinary drinkers and the industry. Some ruling party lawmakers say the government should reconsider.

With the current liquor tax at 72 percent, the manufacturer’s price of soju is W800, W205 cheaper than beer, which is taxed at 90 percent. That gap will shrink to W48 next year and disappear in 2007.

The price of whisky will also surge next year as the government plans to hike tax from 72 percent to 90 percent, the same level as soju. The price of a 500 ml bottle of Imperial whisky will likely to go up from W25,000 to W29,000 or 30,000. That in turn will lead bars or pubs, which account for over 80 percent of the total sales of whisky, to put up their selling price by W20,000 to W30,000. The whisky industry is not taking kindly to the proposed increase. Some lawmakers even proposed a “health tax” on whisky, which already exists for cigarettes, an industry source fumed.

There will be resistance among local soju distillers too, because the hike is bound to reduce the consumption of soju further after it fell 2.2 percent on-year in the first half of the year.

(englishnews@chosun.com )