AB InBev's Oriental Brewery buys Jeju Soju from Shinsegae

Oriental Brewery Co. (OB), a unit of the world’s largest beer company AB InBev, agreed on Wednesday to purchase Jeju Soju from Shinsegae L&B Co. to foray into the traditional Korean distilled liquor market, the two companies said.

OB is setting its sights on the growing soju export market as the vodka-like rice liquor is catching on in overseas markets alongside the popularity of K-pop and Korean food.

Soju is the most popular Korean alcoholic beverage globally among foreigners, according to a survey conducted by the Korean Food Promotion Institution in 2023.

Under an agreement, OB will take over Jeju Soju’s production facility, the plant's land and the rights to use groundwater there from Shinsegae for an undisclosed sum. OB will then absorb the spirits maker, founded in 2011.

In 2016, E-Mart Inc., a supermarket arm of Shinsegae Inc., acquired Jeju Soju for 19.0 billion won ($14.2 million) and has since poured 57.0 billion won into the loss-making soju maker.

But Jeju Soju, based on the island of the same name, has remained in the red under E-Mart. Over the past four years, Jeju Soju has accumulated losses of 43.4 billion won.   

In the domestic soju market, HiteJinro controls 59.8% under its flagship brand Chamisul, followed by Lotte Chilsung Beverage Co. with an 18% share, according to Korea Agro-Fisheries & Food Trade Corp.

In 2021, E-Mart transferred Jeju Soju to its affiliate Shinsegae L&B. It has since discontinued producing the clear, colorless spirit under its own brand and transformed into an original development manufacturer for soju exporters.

Soju exports surpassed $100 million in 2023, marking the largest overseas shipments of the alcoholic beverage in a decade.

Shinsegae L&B has sought to jettison the soju maker to restructure its business hit hard by the sluggish wine business.

Write to Sul-Li Jun at sljun@hankyung.com
 


Yeonhee Kim edited this article.