South Korean boycott hits Japanese beer imports

Seoul

SOUTH Korean imports of Japanese beer slumped 45 per cent in July from the previous month in the wake of a consumer boycott sparked by an escalating political and economic dispute between the two Asian neighbours, data showed.

The plunge is good news for rival importers and South Korean brewers but is a worrying sign for Japanese exporters like Asahi Group Holdings, which said last week the boycott was affecting sales and lowered its profit guidance.

Japan shipped US$4.3 million worth of beer to South Korea in July, down from US$6.6 million a year earlier and US$7.9 million in June, according to preliminary customs office data.

Japan tightened export controls last month for materials used to make chips, South Korea's top export item, intensifying a row over wartime forced labour and sparking a consumer backlash in Korea.

Many Korean supermarkets and convenience stores have removed Japanese items such as beer from their stands and stopped new orders.

South Korea buys 61 per cent of Japan's beer exports, spending 7.9 billion yen (S$103 million) in 2018 on the shipments, according to Japan's finance ministry.

Korea's imports of Japanese beer declined 11 per cent in the first half from a year earlier, after nearly quadrupling over the past three years in 2018, according to customs data.

Overall, imported beers such as Asahi and Heineken have eroded the dominance of domestic beers in recent years, but they are likely to fall from their peak due to the boycott of Japanese products, an official at a South Korean brewer said.

"Both domestic and other imported beers are expected to share the benefits from the boycott campaign," he said. REUTERS