Tax agency gives booze a break

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Tax agency gives booze a break

Korea’s tax agency has ordered a round of new measures intended to promote traditional liquors, ease restrictions for their sales online and expand offerings of native yeast strains available to local distillers.

The National Tax Service plays an outsized role in Korean alcohol commerce, handling not only the taxation of alcoholic products but also managing the country’s century-old licensing system, distribution, safety and promotion of traditional liquors.

It defines traditional alcoholic beverages as those that have been passed down through generations or by a person designated as a “food grand master,” who has inherited traditional techniques using regional agricultural products.

Currently, traditional Korean alcohol can only be sold online through websites, but the tax agency plans to make it available through mobile apps as well.

Within the first half of this year, the agency also plans to allow sample tasting at traditional liquor promotion centers run by local governments and public institutions. While traditional alcoholic beverages are allowed to be displayed at such promotion centers, the practice of handing out tasting samples is currently banned.

The agency also plans to publish a book introducing Korean traditional alcohols, as well as recommended food pairings, which will be distributed in major tourist destinations, duty-free stores and hotels. Tour programs for foreign dignitaries and other foreign tax agency officials will include visits to traditional distilleries, according to the agency.

One of the key supports is the localization of the yeast that is used in making traditional drinks, which currently depends heavily on imports.

Last year, Korea imported 196 tons, or 710 million won ($608,000) worth, of yeast, which accounts for 99.5 percent of all yeast used in Korea. Most yeast imports came from Japan.

The agency said only one ton of yeast is manufactured from a local company.

In response, Korean tax officials are supporting research by the National Institute of Biological Resources to develop a new yeast native to Korea. It hopes to complete the work by the end of next year, at which point the research data and related technology will be transferred to Korean private companies.

The tax agency said demand for Korean traditional liquor has been low, as many consider the drink only as a gift for traditional holidays such as the Lunar New Year and Chuseok harvest holidays.

Beer accounted for the largest share of the domestic alcohol market at 58.75 percent, while soju trailed behind at 25.35 percent.

Traditional Korean alcohol only accounted for 0.27 percent.

The agency also noted that past regulations, focused mainly on taxation, had historically held Korea’s traditional liquor industry back.

“We will work on finding and developing traditional alcohol manufacturers that have a long history,” the tax agency official said. “We will benchmark the alcoholic drink industries of other countries, such as France and Germany, and create measures that are effective accordingly to our situation.”

The tax agency also operates the Liquor License Support Center, which was first established in October 1909. It includes an array of analytical equipment that tests the quality of alcoholic beverages and also holds 80 patents related to making alcoholic beverages and manufacturing equipment.

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