Craft beer makers that once filled convenience store alcohol coolers have repeatedly faced financial difficulties. As demand plummeted due to changes in drinking trends, cases of delisting or entering court receivership have increased.
On the 26th, according to the Financial Supervisory Service, the Korea Exchange held a KONEX market listing disclosure committee on the 21st and decided to delist Sevenbrau. Having entered KONEX last January, it was expelled after 1 year and 7 months. If the company does not file an objection by the 11th of next month, delisting procedures will proceed.
Launched in 2011, Sevenbrau signed a contract with Daehan Flour Mills in 2020 to produce "Gompyo wheat beer," selling about 60 million cans and leading the craft beer market boom. However, after failing to renew the Gompyo wheat beer production contract in 2023, its performance collapsed.
In 2021 it recorded operating profit of 11.8 billion won, but last year it posted an operating loss of 9 billion won. Last year's sales were 8.4 billion won, a 31% decrease from the previous year. Ultimately, in June it received a decision from the Seoul Bankruptcy Court to commence corporate rehabilitation proceedings (court receivership).
Amazing Brewing Company also entered court receivership due to financial deterioration. On the 13th, Seoul Bankruptcy Court's Rehabilitation Division 15 decided to commence corporate rehabilitation proceedings for Amazing Brewing Company.
Amazing Brewing Company is a craft beer maker that started in 2016 by opening a brewery and pub in Seongsu-dong, Seoul. It received about 11 billion won in investment from venture capital (VC), but borrowing fund increased from financial institutions during plant expansion, worsening its financial soundness. Last year it recorded sales of 3.9 billion won and an operating loss of 2 billion won.
Jeju Beer Company, the first listed craft beer maker headquartered in Jeju, has continued to run at a loss. Founded in 2015, Jeju Beer Company was specially listed in 2021 under the Tesla rule (a system that allows listing if there is growth potential despite not posting results), but it has never posted a profit. Last year's cumulative operating loss reached 26.8 billion won.
Accordingly, ownership changed twice just last year. In March last year it was sold to auto repair firm Double H M, and in November that year management control passed to electronics components company HanWool Semiconductor. HanWool Semiconductor holds 24.2% equity in Jeju Beer Company. In March it changed its corporate name to HanWool & Jeju.
The domestic craft beer market, which was 9.3 billion won in 2013, grew to 152 billion won in 2021. Retail distribution of craft beer was permitted in 2018, and in 2020 beer shifted from ad valorem tax to specific tax. Ad valorem tax levies higher taxes on expensive alcohol, while specific tax imposes taxes based on the volume of alcohol.
In 2021, with contract manufacturing allowed, collaboration beers such as Gompyo, Malpyo and Yudong golbaengi poured out. The response from value-seeking MZ generation (millennials and Gen Z, born 1980–2004) and home-drinking and solo-drinking trends from COVID-19 combined to propel rapid growth of craft beer.
However, two years later in 2023 the craft beer market shrank by half to 75.2 billion won. Demand fell due to the economic downturn and changes in alcohol trends. Some analysts say the related companies overused collaborations without their own competitiveness and invested in production facilities as a result.
Sevenbrau, shaken by the failure to renew the "Gompyo wheat beer" production contract, is a representative example. When Gompyo wheat beer was a hit, the company made large investments to add manufacturing equipment, but after termination of the trademark contract with Daehan Flour Mills it suffered huge losses.
A distribution industry official said, "There has been an element of wearing out consumers by focusing on trendy products rather than the originality and quality of craft beer," and noted, "the emergence of new alcoholic beverages such as highballs is a reason craft beer has been pushed back."