Soju, an inexpensive distilled alcoholic beverage, has been a go-to drink for many Koreans during economic downturns as a way to cope with their troubles.
However, the connection commonly perceived between soju and economic downturns seems to be diminishing.
Retail sales of soju amounted to 1.18 trillion won ($884.16 million) in the first half of 2023, down 7.1 percent from a year earlier, according to Korea Agro-Fisheries & Food Trade Corp. (aT).
The data comes as Korea struggles with a rare 1-percent-range economic growth, a 15-year-high benchmark interest rate of 3.5 percent, a consecutive 3-percent-range inflation for the second year in a row — the first since 2004 — and other related issues.
Operating under the Ministry of Agriculture, Food, and Rural Affairs, the state-run corporation attributed the decline in soju sales to a slower-than-expected recovery in the service sector in the post-pandemic era.
“The sluggish recovery was especially noteworthy in restaurants, pubs and karaoke bars where alcohol makes up a considerable portion of sales,” aT said.
When asked about the reasons behind the stagnant service sector, it pointed to a pandemic-induced shift in workplace culture, where employees are avoiding socializing for drinks after work.
Furthermore, the price of soju sold at restaurants was raised nearly three times higher than ones sold at supermarkets and convenience stores.
Statistics Korea data showed the consumer price index (CPI) for soju sold at restaurants stood at 114.82 in 2023, up 7.3 percent from the previous year.
CPI measures the average change in prices paid by consumers over a period of time for certain goods. The index serves as a comparison point, with prices set at 100 in the base year, which is 2020 in this case.
During 2022-23, the index for soju sold at supermarkets and convenience stores increased 2.6 percent.
In Seoul, a 360-milliliter bottle of soju is priced as high as 6,000 won at restaurants, while the price was lowered to 1,900 won from 2,100 won at major convenience stores beginning this year.
The Ministry of Economy and Finance and the National Tax Service are jointly working on possible measures to stabilize the price of soju in the service sector, according to industry sources.
But at the time, they are cautious about unwanted side effects small business owners could experience, the sources said.
In addition, aT analyzed a new drinking trend among young consumers in their 20s and 30s that is contributing to the decline in soju sales. This trend refers to a growing preference for hard liquor, such as whisky, and highball, a mixed alcoholic drink made using alcohol-based spirits.