This study aims to identify the means to optimize the alcoholic beverage industry through a thorough understanding of the alcoholic beverage manufacturing and distribution industries. The alcoholic beverage manufacturing industry is primarily made up of small manufacturers, but there are some segments – soju, beer, whiskey and other western liquors – that are run on a tight oligopoly. Institutionally speaking, the alcoholic beverage industry is restrained because the government strictly controls every aspect of the business, ranging from the manufacturing and sales licenses to the distribution of raw materials, regional sales, production allocation, price and packaging. Regular liquor wholesale stores, chain supermarket and other retail businesses that distribute alcoholic beverages are hierarchically positioned below manufacturers so they have to deal with excessive competition from one another.
Unfair trade practices such as one-sided push or product tying by large conglomerates are common under the table, and some even force wholesalers to boycott the competitions’ products; it would not be an understatement to say that the overall distribution structure is extremely skewed in favor of the manufacturers. It is clear that the alcoholic beverage industry is in dire need of a timely structural reform backed by institutional improvements. This study suggests the following five actions to solve the problems that arise from changes in consumption patterns such as the premium development of the alcoholic beverage market and the macroeconomic changes such as the opening of international trade.
First, the manufacturing and sales license requirements for alcoholic beverage and the tax cork need to be relaxed, and healthy competition between wholesalers need to be promoted in order to restore the balance of power between manufacturers and distributors. Second, a set amount of buffer should be placed on the existing demand and supply forecasting methodology to allocate enough ethanol to a large number of small manufacturers and prevent the market disorder that occurs when supplies are limited. Third, the goods payment turnover often runs over 45 days, but some large conglomerates run the blank check proxy system in the Seoul and Gyeonggi regions for the sake of transportation convenience, at the price of a goods bottle-neck and a dumping risk, especially when the practice is accompanied by product-tying. Fourth, a more stringent application of the Fair Trade Act that deals with the boycott practice that hurts the market position of wholesalers is called for. An amendment of the Alcoholic Beverage Business Processing and other related regulations should be made to stop manufacturers from engaging in direct transactions with entertainment businesses and regular retailers. Lastly, new total wholesalers should be established to address the distribution system issues relating to excessive competition and unnecessary hierarchical imposition.
주류산업의 구조분석(Analysis of the alcoholic beverage industry structure)
|Series Title; No||정책연구시리즈 / 88-06|
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Industry and Technology < General|
|Holding||KDI; KDI School|