Higher cost of whiskey is tough to swallowOne of the more anticipated benefits of the Korea-EU free trade agreement was the lower import price of two of Korea’s prized possessions: Johnnie Walker and Ballentine’s scotch whiskey.
But while the importers are paying a lower price for the scotch, the boon hasn’t trickled down to the consumer. According to a report released by the Green Consumer Network yesterday, consumers are paying over 5.1 times the import price for whiskeys shipped from Europe.
Although the bilateral trade deal lowered tariffs on imported European whiskey to 15 percent from 20 percent last July, the average price of whiskeys in the first half of this year went up 1.4 percent on-year.
The organization, which investigated prices of 74 whiskeys with the assistance of the Fair Trade Commission, said importers bring in the liquor at 2,664 won ($2.30) per 100 milliliter from Europe.
They later sell the bottles at 8,376 won to retailers, who then inflate the price to around 13,500 won. Importers and retailers together collect a retail margin of some 10,840 won when the original import price is excluded.
Green Consumer Network said whiskey importers take 52.7 percent and retailers 47.3 percent of the revenue, respectively.
“The results of the probe indicate that whiskey importers reap in lots of profits by selling whiskeys at high prices to retailers,” said an official at the Green Consumer Network. “This is possible because most importers exclusively bring their branded whiskeys from overseas.”
Prices of imported whiskeys went up by 0.23 percent to 41,200 won last month from 41,103 won per 100 milliliter in May 2011, which was two months before the Korea-EU free trade agreement went into effect in July 2011. Green Consumer Network also blamed the price hike of whiskeys on the escalating prices of raw materials in Europe.
According to the organization, a bottle of William Grant & Sons’ Glenfiddich 21 is sold at 18,426 won per 100 milliliter in England, the country of origin, but the same product is sold at 44,667 won in Korea.The bottle goes for 26,198 won in United States and 28,172 in Japan. Pernod Ricard’s Ballentine’s 21 is sold at 29,156 won in Korea, compared to 17,891 won in England.
By Kim Mi-ju [email@example.com]
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