OB to acquire Jeju Soju as beer maker seeks to expand exports

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OB to acquire Jeju Soju as beer maker seeks to expand exports

Published: 12 Sep. 2024, 14:06 Updated: 12 Sep. 2024, 16:09

KIM JU-YEON
kim.juyeon2@joongang.co.kr

Jeju Soju's Blue Night soju [JEJU SOJU]

Oriental Brewery (OB), an AB InBev-owned beer maker best known for its Cass brand, will buy Jeju Soju from Shinsegae with hopes of turning it into a leading export, the company said Wednesday.

The takeover will take place as early as within the year for an undisclosed amount. OB will be taking over Jeju Soju’s production facilities, equipment and rights to the island’s underwater reserves.

The acquisition notably marks OB’s — and in turn its Belgian parent company AB InBev’s — venture into the global soju market, with the brewery primarily having focused on its Cass beer for local consumers.

OB said it plans to tap into the global market’s increasing enthusiasm for Korean food and beverages to expand its beer and soju products.

Jeju Soju was founded as a local brewery on Jeju Island in 2011. Three years later it launched its “Olle Soju” beverage in 2014. Shinsegae retailer Emart acquired Jeju Soju for 19 billion won ($14.2 million) in 2016 and relaunched the soju as “Blue Night Soju” in 2017.

Emart invested around 57 billion won in the brand for four years but failed to turn a profit, with operating losses amounting to 43.4 billion won from 2017 to 2020.

The brand was then acquired by affiliate Shinsegae L&B in 2021. Sales of Blue Night Soju was halted, but the company continued soju production as an original design manufacturer (ODM) for export-only fruit-flavored soju.

Jeju Soju’s product is used in Gorae Soju, which is sold in the United States, and Him Soju in Vietnam as well as in products sold in Thailand and Singapore. The brewery will continue its ODM business, an OB spokesperson said.

"This acquisition is part of OBC's long-term growth strategy, opening up new possibilities for us," said OB Vice President Koo Ja-beom.

“OBC remains dedicated to delivering the best beer experience for Korean consumers. This acquisition allows us to further leverage and strengthen our Cass export network worldwide.”

OB is Korea’s largest beer producer in terms of off-trade market share, with 55.2 percent in the first half of 2024. Its global sales made up around 70 percent of all Korean beer exports, according to the company.

BY KIM JU-YEON [kim.juyeon2@joongang.co.kr]