Major domestic liquor companies are facing criticism from some quarters for effectively raising prices by lowering the alcohol content of soju. By reducing the alcohol content of diluted soju, the main ingredient, ethanol, is used in smaller quantities, which lowers production expenses, while consumers end up drinking more than before. This is seen as a strategy to reduce costs while increasing sales.
According to the industry on the 28th, LOTTE Chilsung Beverage announced that it would lower the alcohol content of 'Choeum Choeum' from 16.5% to 16% on the 10th. Before that, HiteJinro also reduced the alcohol content of 'Jinro Is Back' and 'Chamisul Fresh' to 16% from 16.5% in 2023 and last year, respectively.
Each company stated, "We made this decision in line with the recent trend of preferring low-alcohol options." However, there are consumers who feel disappointed about the reduction in soju's alcohol content. This is because the uniqueness of each soju brand has diminished, and the difference in alcohol content compared to other types of liquor has also decreased. Soju has become similar in alcohol content to that of light liquor, cheongju, sake, and wine.
'Choeum Choeum', 'Jinro', and 'Chamisul' are all diluted soju. It is a popular liquor made by diluting ethanol with water and adding sweeteners and purified water. As the alcohol content decreases, the proportion of ethanol decreases while the proportion of water increases. This reduces the amount of ethanol required to produce the same volume, lowering the production cost. Conversely, consumers need to drink more of the lower-alcohol liquor to become intoxicated, which naturally leads to an increase in sales volume. This has prompted criticism that lowering the alcohol content of soju is ultimately meant to maximize corporate profits.
ChosunBiz analyzed business reports from LOTTE Chilsung and HiteJinro to calculate the extent to which the reduced usage of ethanol per bottle after lowering the alcohol content has contributed to the companies' expense reduction. However, this was a simple calculation based on the price and purchase amounts of ethanol and the production volume of soju, excluding changes in other expenses. It was also assumed that the total production volume was made using the same recipe.
For instance, after LOTTE Chilsung lowered the alcohol content of 'Choeum Choeum' from 16.9% to 16.5% in 2021, it launched 'Saero' at 16% in 2022. According to the business report, the price of ethanol increased from 1,677.2 won per liter in 2022 to 1,815.7 won in 2023. The purchase amount of ethanol rose from 75.6 billion won to 92.8 billion won. The sales volume of soju increased from 21.95 million boxes (30 bottles per box) to 25.84 million boxes, and soju sales increased from 341.1 billion won to 404.2 billion won.
Based on these numbers, the total ethanol usage can be calculated by dividing the purchase amount of ethanol by its price. The total ethanol usage increased from 45.08 million liters in 2022 to 51.11 million liters in 2023. However, the ethanol usage per bottle actually decreased. According to internal calculations, the ethanol usage per bottle dropped from about 68.5 milliliters in 2022 to approximately 65.9 milliliters in 2023, a reduction of about 2.5 milliliters. This represents a decrease of about 3.7% based on input amounts.
If the same amount of ethanol had been used in 2023 as in 2022, about 53.06 million liters would have been needed, but in reality, approximately 51.11 million liters were used. A simple calculation using the 2023 ethanol price (1,815.7 won per liter) estimates LOTTE Chilsung's cost savings at about 3.55 billion won.
HiteJinro showed a similar pattern. HiteJinro has been lowering the alcohol content of 'Chamisul Fresh' by 0.1% to 0.2% almost every year. It then lowered it from 16.9% in 2020 to 16.5% in 2021, and to 16% in 2024. 'Jinro Is Back' was also reduced from 16.9% in 2019 to 16% in 2023.
By analyzing business reports from 2023 and 2024, they compared soju production volume and ethanol usage. The ethanol price was 1,843.7 won per liter in 2023 and 1,897.1 won in 2024. Although the ethanol price increased, the purchase amount of ethanol decreased slightly from 276.7 billion won to 276.3 billion won. Soju production volume also fell from 840,402.2 kiloliters to 840,747 kiloliters. However, soju sales rose from 1.469 trillion won (1.2856 trillion won based on separate standards) to 1.5481 trillion won (1.3591 trillion won based on separate standards).
Based on the above figures, the total ethanol usage is estimated to have decreased from 15 million liters in 2023 to 14.56 million liters in 2024. If the ethanol usage per liter remained the same as in 2023, about 14.95 million liters would have been needed in 2024. The difference is about 390,000 liters. Applying the ethanol price for 2024, the cost savings are estimated to reach 7.3 billion won.
All of these companies refrained from specific comments citing 'corporate secrecy' beyond what was publicly disclosed. An industry official noted, "The price of soju is difficult to increase directly, considering the government's price stability policy and consumer sensitivity. Consumers are drinking lower-alcohol liquor at the same price, while companies are reducing costs and expanding sales. This is why some have pointed out it as a 'silent price increase.'