Fearing customer backlash, restaurants stay put on soju prices

Customers gather at a pocha, or outdoors food stall, where people usually go to enjoy a drink with their food. Picture taken at Euljiro, central Seoul in April 2022. [NEWS1]

Prices for HiteJinro’s soju and beer brands rose on Thursday, but restaurants in Seoul have hesitated to raise prices on soju sold in-store despite the increased costs.

HiteJinro raised wholesale prices for the nation’s top-selling soju Chamisul on Thursday, from 1,166 won to 1,247 won for a 360-milliliter bottle. On average, a 50-seat restaurant will order two boxes, or 60 bottles, of soju a day. The price hike would cost them an additional 4,866 won per day at that rate.

Some restaurants in Gangnam, southern Seoul, sell soju and beer for 7,000 won a bottle. This means making the popular somaek concoction, a mixture of soju and beer, will cost more than 20,000 won, as the recipe calls for one bottle of soju and two bottles of beer.

However, 20 restaurants in the Jongno, Gangnam and Mapo Districts visited by the JoongAng Ilbo had not increased their soju prices this month. Only three restaurants said they raised prices over the year. The average price for a bottle of soju at these stores was 5,250 won.

Park Il-yeon, the owner of a dakbokkeumtang or spicy braised chicken stew restaurant in Gangnam, says there is much to consider when raising prices for soju. The restaurant, with daily traffic of 400 to 500 customers per day, has sold soju for 5,000 won a bottle for several years. Some restaurants nearby have upped prices to 5,500 won or 6,000 won starting last year. But Park is “worried the shop will lose regulars if prices [for soju] are raised.”

Ten other restaurants said they faced the same conundrum. They seem hesitant to raise prices, at least immediately, while ordinary citizens and office workers suffer from high consumer prices and interest rates.

On Thursday, the Korea General Liquor Wholesalers Association (KGLWA) said it would not increase wholesale prices for soju for the time being in adherence to the government’s price stabilization policy. Around 1,100 wholesalers nationwide are affiliated with the association.

However, this is a desperate measure out of concern for their customer base.

“Office workers have drastically reduced company dinners after the Covid-19 outbreak, and personnel costs and food prices have also risen,” said a KGLWA insider, adding that “at this rate, the number of restaurants going out of business will rise, and wholesalers will also inevitably take a hit.”

And yet, some consumers remain disgruntled. “I’m nervous to order [drinks] because alcohol prices amount to almost the same as food for a two-to-three-person meal at a restaurant,” said Kim, an office worker living in Anyang, Gyeonggi.

“I secretly slipped out of a restaurant after seeing that soju was 7,000 won per bottle on the menu,” said another office worker named Park. “With such high prices, even an intimate year-end party with friends seems burdensome,” Park added.

A government-wide scheme has been launched to manage prices of key food and other items to bring inflation under control, the Finance Ministry announced Thursday.

Vice ministers of all government ministries will monitor the prices of items concerned and implement necessary countermeasures, while some ministries have been in charge of checking prices. Some regard the method as a revival of then-President Lee Myung-bak’s way of targeting inflation a decade ago.

The Ministry of Agriculture, Food and Rural Affairs set up its own task force to closely track the prices of 28 key food items, including processed foods, flour, instant noodles, coffee and milk.

BY KIM MIN-SANG, CHOI EUN-KYUNG, NA SANG-HYEON, KIM JU-YEON [kim.juyeon2@joongang.co.kr]