Ten months after 'pee-gate,' Chinese beer continues struggling in Korea

Home > Business > Industry

Ten months after 'pee-gate,' Chinese beer continues struggling in Korea

Published: 21 Aug. 2024, 06:00

A customer picks a pack of Japanese beer product Sapporo at a supermarket. [NEWS1]

The once-dominant Chinese beer has lost its foothold in Korea — due, experts say, to the lasting impact of a viral video that showed a man urinating into a tank at Tsingtao's brewery facility.

China ranked fourth in beer exports to Korea over the first seven months of 2024 following Japan, the Netherlands and the United States, based on the Ministry of Trade, Industry and Energy's imports data. The country fell to fourth place for the first time in 10 years, having claimed the top spot in 2022 with sales of $36.44 million.

Its beer exports to Korea experienced a significant decline over the seven-month period, plummeting by 50.8 percent to $11.3 million compared to the same period of last year.

Most notably, major Chinese beer brand Tsingtao's sales in Korea have declined significantly due to concerns sparked by a viral video, posted last October, that appeared to show a brewery worker urinating into a beer vat. BK, Tsingtao's Korean importer, attempted to quell those fears by stating that the Tsingtao products sold in Korea were not produced at the facility. However, the assurances were insufficient to regain consumer trust; the importer’s sales fell 20.5 percent to 80.64 billion won ($60.5 million) last year, and its operating loss skyrocketed by 282.1 percent to 8.18 billion won.

“Tsingtao, synonymous with 'Chinese beer' itself in Korea, enjoyed such a strong reputation in Korea that it consistently ranks among the top five imported beers,” said an official from the domestic alcohol industry. “With hundreds of foreign beer brands vying for market share, having a positive image is crucial. Unfortunately, Tsingtao's reputation suffered a setback after failing to effectively address the 'pee-gate' controversy.”

Japanese and U.S. beer products are filling the void left by Chinese brands. Japanese beer companies like Asahi experienced a remarkable 66.2 percent increase in sales last year, reaching $37.8 million, primarily driven by strong demand for its Super Dry Draft beer. Meanwhile, U.S. beer brands like Budweiser and Miller surpassed their Chinese competitors for the first time, posting a 46.5 percent increase in sales that totaled $13.7 million.

BY NA SANG-HYEON [yoon.seungjin@joongang.co.kr]