Foreigners See Wine Market as Gold Mine

Customers look at bottles of wine at a retail store in Seoul, Tuesday. A growing number of retail stores have a section that has a wide selection of cheap quality wines. / Korea Times Photo by Shim Hyun-chul

By Yoon Won-sup
Staff Reporter

Wine is emerging as a newly established fad for people of all ages as Koreans have opened their eyes to the new world of wine. A little attention to this shows how fast and pervasively wine is gaining ground in Korea.

Nowadays, for example, it is not that difficult to find a wine list next to a food menu in restaurants, and almost all convenience shops open 24 hours nationwide have their special wine shelves.

There is even a Korean-made ``Wine Day,'' which falls on Oct. 14 when consumers are urged to buy and drink wine at a discount just as people can hardly skip the Feb. 14 Valentine's Day without eating some chocolate.

For Koreans who use their cell phones for many other purposes than making a phone call, on a label of wine is a bar code for cell phones to read all the information about the wine through the Internet ― origin, grape variety, taste, price, popularity, and so on.

The results of a few surveys better explain the current boom.

A refrigerator designed to preserve wine as if in cellar is among the top 10 items which a newly married couple most want, according to one poll conducted by a wedding consulting company this month.

About 84 percent of CEOs experienced stress due to their lack of knowledge on wine, according to a survey conducted by Samsung Economic Research Institute last spring ― they said they felt frustrated most when asked to select wine at a meal.

Though all these are just phenomena showing the wine boom, the figures on wine are more outstanding.

Wine Figures

Since the Korean government allowed the free import of wine in 1987, its market share in imported alcoholic drinks has steadily grown to 18 percent.

The value of imported wine has increased from $19.8 million in 2000 to $29.43 million in 2002; $57.98 million in 2004; and $88.61 million in 2006. From January to June 2007 it was $69.77 million, and is expected to reach over $100 million by the end of the year, according to the Korea International Trade Association. The imported wine market grew 22 percent from 2006 to 2007.

The increased wine imports will likely continue given Koreans' trend of consuming alcohol, according to experts.

Koreans consume some 30 liters of alcohol per capita a year, and their No. 1 and No. 2 drinks are not wine but soju and beer. Wine consumption reaches only 0.59 liters out of the 30 liters.

However, per capita wine consumption will reach 0.76 liters in 2010 and the value of imported wine will go over $800 million if the current trend continues, according to a report by wine importing company, Keumyang International.

A workers in another wine importing company said, requesting anonymity, ``Korea is known to wine exporting countries as a land of opportunity thanks to its fast-growing wine market. For example, generally, a foreign wine exporter comes to Korea almost everyday to find an importer here.''

He expects the boom to last for quite a long time because of many elements but added that lots of new wine importers' entry into the market has made competition tough, leading to less than stellar profits. Currently, there are some 300 wine importing firms, which import about 4,000 kinds of wine, he said.

Reason Behind Popularity

Experts say the wine boom coincides with the well-being concept, which has also been well received in Korea over the past few years. People now pay more attention to their quality of life and better lifestyles including what to eat and drink.

Plus, recently decreased percentage of alcohol in Korea's most popular drink soju from 23 to 19 percent also positively affected the wine boom as Koreans are getting accustomed to mild liquor.

Globalization has also played a role introducing wine to Korea as more and more foreign drinks and foods are coming here, and the presence of wine is becoming a trend to enjoy, particularly among the young.

Interestingly, a Japanese comic book series, dubbed ``God's Drop,'' dealing with wine was an unprecedented hit not only in Japan but also in Korea. It is very hard to buy some wine recommended by the book, because of the book's influence.

Wine Competition

France was the No. 1 wine exporter to Korea with over a 50-percent share of the market until 2000, but its share has been decreasing since then in the face of competition from other wine-producing countries.

The United States, which was always next to France, was downgraded to No. 3 in 2004 due to emerging Chile, which has a free trade agreement (FTA) with Korea. But once Korea and the United States ratify their FTA, the United States will have a high chance of regaining its position.

The impact of an FTA is very strong and immediate as seen in the case of Chilean wine.

Korean imports of Chilean wine were valued at about $3 million with a 6.5 percent market share in 2003, positioning it 5th after France with 49.5 percent, Italy with 9.1 percent and Australia with 7.1 percent. But the Chilean wine's market share jumped to 13.8 percent in 2004 when the Korea-Chile FTA took effect and to 17.4 percent in 2006.

Things to Be Considered

There are also negative effects of the wine boom.

For example, just a recommendation by hit comic books or other influential media on certain wine increased their price without any other reason.

Suh Hyun-wu, 33, who studies on a doctoral program in Paris, said that he couldn't find many wines, which were praised in the God's Drop, in France because the majority of them were exported to Japan or Korea.

He said, ``This strange fad on wine in Korea has a bad impact on the whole wine market since wine is not a drink that should follow fashion.''

yoonwonsup@koreatimes.co.kr