Since the lifting of Covid restrictions, the Asia Pacific region has seen a steadily increasing volume of whisky imports. And whilst we’ve previously reported on this, I don’t think even we were aware of just how much of a hit a drop of the gold stuff was becoming.
Globally, but certainly more in the Asia Pacific countries, the younger generation have reignited the popularity of cocktails – especially whisky highballs. Those with higher incomes have also developed a taste for investing in the fine and rare vintages and have been snapping up lots at auctions around the world. But it’s the Gen Z and millennial demographic who have dominated sales.
Interestingly, it’s been nearly 20 years since Scotch found favour with the Koreans. However, back then, it was the more mature vintages which were proving popular. Businessmen found a taste for the likes of 17 year old Ballantines, Windsor and Imperial. Corporate entertainment budgets were flush enough to fund plenty of drams, including large quantities of ‘poktanju’ or boilermakers, which is a shot of whisky dropped into a beer (perhaps the precursor to the head spinning Jaegar bomb of today!) The chorus of ‘Konbae’ (cheers) was a familiar sound in bars frequented by local businessmen throughout South Korea.
So, why did whisky popularity fall?
Well, to be honest, it wasn’t all down to popularity, finances played a major part. The country’s financial crisis in 2008 had a massive impact on the pockets of just about every South Korean. In the 4th quarter of 2008, GDP had dropped by 4.5%, which was the second largest reduction on record globally. Businesses could no longer fund the extravagances of whisky fuelled corporate entertainment and the younger generation were still of a mind back then, that whisky was an old man’s drink. They, instead turned to the cheaper and more readily available beer, locally produced soju and vodka.
Well, as has been widely reported, the pandemic was responsible for a change in a lot of habits, especially in the world of alcohol. Extra income fuelled a demand in, not just alcohol but more premium varieties. Plus, as we said earlier the younger generation have developed a renewed taste in cocktails and discovered that despite previous thinking, whisky isn’t just an old man’s drink after all! Additionally, social media gave young whisky drinkers who favoured the premium single malts, the opportunity to display this via their Facebook or Instagram accounts – a display of both taste and wealth.
So just how much have the imports grown?
This is where it gets interesting! According to figures released by the Korea Custom service, dramatic growth can be observed over the last 12 months of imported whisky.
Q1 – 4,738 tons
Q2 – 6,451 tons
Q3 – 7,224 tons
Q4 – 8,625 tons
Q1 – 8,443 tons
This data clearly shows, comparing Q1 2023 to the same period 12 months ago, a massive increase of 78% – a record high.
However, the sting in the tail of Scotch Whisky exports where South Korea is concerned is the current rate of their import tax. Typically, taxes on whisky will double the price of what we would pay here for a 75cl bottle. But things may well be looking up on that front; in our April article on this blog site, we wrote about the UK entering the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). This trade agreement will hopefully put an end (gradually if not immediately) to some of the exorbitant taxes currently imposed in other countries, such as Malaysia’s 80% import tax on whisky. Whilst South Korea is not yet a member of the CPTPP, they have already expressed an interest in joining.