South Korea:  Boycott of Japanese beer goes on

Japanese beer exports to its largest export market South Korea have plunged to just USD 772,000 in May 2020, a drop of 86 percent from May 2018. The decline began about a year ago, when South Korea called to boycott Japanese goods after Tokyo refused further indemnification payments for forced labor during Japan’s occupation of South Korea between 1910 and 1945. The relationship between the two neighboring countries has long been strained because of Japan's brutal colonization of the peninsula in the first half of the 20th century (, 28.11.2019).

Contrary to some predictions that the boycott would not last long, it shows no sign of waning. More than three fourths of all respondents of a recent survey by Data Research say that they intend to continue the boycott in the future.

Beer is not the only product categhory where sales of Japanese goods have slumped. Other sectors like automobiles, motorcycles, golf equipment, cosmetics or clothing are also struggling. Some producers like Nissan, Japan’s second-largest automaker, even announced to withdraw from the South Korean market by the end of this year after being present for more than 16 years.

However, while Japanese car imports “only” decreased by 59% in May, beer sales fell by 86% which make Japanese beer one of the products which is hit worst by the boycott. In 2018, the last full year before the boycott South Korea bought a total of JPY 7.9 billion (USD 73 million) worth of Japanese beer. In 2020 it will be most likely only a small fraction of it as long as both sides keep insisting on their standpoints.

In February, Japanese brewer Asahi reported a loss of JPY 3 billion (USD 27.32 million) for 2019 due to the boycott. Asahi Super Dry used to be the most popular import brand in South Korea but the boycott forced the brewer to dispose of unsold beer which was past its expiry date, Asahi’s CFO Atsushi Katsuki told Reuters. “The impact is continuing in the current year,” Mr. Katsuki said.

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