SEOUL, Aug. 29 (Korea Bizwire) — With South Korean whisky manufacturers suffering through almost 10 years of difficult market conditions, Diageo Korea Co., the largest whisky manufacturer in the country, has decided to shut down local production after 39 years in the country.
Diageo Korea, the local unit of British beverage maker Diageo plc, decided to shut down its manufacturing plant in Icheon, Gyeonggi Province, next June due to a plunge in consumption caused by the prolonged economic downturn and dwindling exports.
The factory has been producing 1.5 to 2 million boxes of whisky annually.
The shrinking local market and weakening competitiveness in foreign exchange were the leading factors that resulted in the decision to shut down the plant.
Diageo Korea owns whisky brands Johnny Walker, Windsor, J&B, and beer brands Guinness and Hop House 13.
The company has been struggling to overcome weak demand.
Operating profits plunged to less than 100 billion won (US$80.2 million) in 2013, and 37.2 billion won (US$30 million) in 2018. Whisky sales have halved over the past 10 years.
The company now has to deal with 90 workers at the factory including 29 employees hired by the company and others from affiliates.
Many expect that other whisky manufacturers will join the trend of restructuring since most of them are struggling financially.
According to the liquor industry, 1.49 million boxes of whisky (500㎖×18 bottles per box) were released for sale last year, down 6.2 percent since 2017.
In 2008, 2.8 million boxes of whisky were released, halving over the last 10 years.
H. M. Kang (email@example.com)