Era of online wine sales seen to be approaching

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Era of online wine sales seen to be approaching


Will the government finally give the green light to Internet sales of imported wines and end a debate that has been raging for more than two years?

After butting heads over the issue since 2010, officials from the Fair Trade Commission (FTC) and National Tax Service (NTS) met yesterday to discuss the prospect.

However, the two agencies have yet to confirm whether they reached an agreement.

The FTC has long been pushing for the move but at present only traditional Korean alcohol or locally produced wines that have been approved by the government can be sold online.

The antitrust agency has argued that if imported wines are sold in this way, not only will it boost the benefits of FTAs with the EU, U.S. and several South American countries in recent years, but will also help ease inflationary pressure.

Earlier this month, FTC Chairman Kim Dong-soo said it was time to make the change.

“Only this will cause the pricing bubble to deflate due to hotter competition among retailers,” he said.

He added that there were growing numbers of wine aficianados in the country but many resided to cheap and low-quality wine because of the expansive price.

There were high expectations that consumers here would benefit from the FTAs as the price of good quality wine would be sold at more affordable prices.

According to Korea’s customs office, French wine accounted the most among wines imported to Korea at 32 percent followed by Chilean wine that took up 22 percent.

Italian wine was the third imported, accounting 17 percent while U.S. wine came in fourth taking up 10 percent. But wine prices have remained steady, leading to complaints from consumers.

Many blame Korea’s overly complicated distribution structure and costly marketing expenses.

The antitrust agency said the price of imported wine at minimum rises 300 percent or more by the time it reaches consumers, as middlemen inflate the price with their generous profit margins.

The free trade agreement between Korea and the U.S. that went into effect in March alone abolished the 15 percent tax imposed on wine shipped from the U.S.

The tax office has opposed selling imported wines online as doing so would cause tax income to shrink.

Other government agencies, including the Ministry of Health and Welfare, have resisted the shift to Internet trading out of fears that this would help facilitate underage drinking.

At a cabinet meeting earlier this week, President Lee Myung-bak ordered the government to take action to ensure the country takes full advantage of its FTAs.

By Lee Ho-jeong []
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