Korea: Korean Whiskey Producer Liquidates Carlsberg Beer Inventory

GoldenBlue, a Korean whiskey producer and importer of foreign beverages based in Busan, has declared the disposal of its remaining Carlsberg beer inventory in response to Carlsberg's termination of the distribution contract. The disposed Carlsberg products, along with associated disposal expenses, amount to KRW 490 million (USD 378,100).

An official from GoldenBlue stated on Tuesday, “Due to the unresolved dispute following the cessation of Carlsberg product distribution and ongoing expenses such as storage costs leading to further losses, we were compelled to dispose of all remaining Carlsberg product inventory.”

GoldenBlue had entered into import and distribution agreements with Carlsberg Group in April 2018. However, in March of the current year, Carlsberg Group issued a contract termination notice to GoldenBlue, resulting in the discontinuation of Carlsberg beer distribution. (inside.beer, 28.3.2023)

Describing Carlsberg's termination of the contract as "unilateral," the Korean liquor company accused Carlsberg of an abuse of power, known as gapjil.

The company spokesperson emphasized, "We elevated the Carlsberg brand from the Top 15 to the Top 10 position among imported beers in Korea through substantial investments, including new hires and the establishment of a Beer and Spirits division." The spokesperson further noted that Carlsberg misled them by initially seeming to secure long-term contracts, only to enter the domestic market through its own entity without disclosing the reason for terminating the partnership.

GoldenBlue contends that Carlsberg terminated the initial import and distribution contract at the end of 2021. The partnership was then sustained through short-term contracts lasting two to three months each until November 2022. A month earlier, Carlsberg had established its sales office and commenced direct distribution through Carlsberg Korea.

In response, GoldenBlue filed a complaint with the Fair Trade Commission (FTC) against Carlsberg Group on July 5, alleging unfair practices such as the refusal of trade and forced sales targets. (inside.beer, 7.7.2023) The FTC initiated an investigation into the complaints in mid-September.

GoldenBlue expressed a desire for the eradication of such gapjil cases by global companies and stated, "We will seek measures to prevent recurrence as a Korean company that has suffered damage."

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