Hite Jinro, one of the leading liquor companies in South Korea, has offered 100 from its 3,200 employees a voluntary retirement. It is the second time since 2012 that the second largest South Korean beer maker has to cut jobs to cope with declining sales in a demanding market environment.
"As a preemptive measure to more effectively cope with Korea's declining beer and soju markets, we decided to carry out the voluntary retirement program," a Hite Jinro official told the Korean Times. The company last year faced a drop of 0.9% in sales to 1.89 trillion won ($1.64 billion), with a decline in operating profit of 7.45% to 124 billion won ($108 million).
Last year market leader Oriental Brewery, which is owned by the world’s largest brewer AB InBev, also laid off 138 people under a voluntary retirement program, but has currently no plans to do so again.
The recent years have been very demanding for the two largest breweries in South Korea. Both have lost sales to the growing number three Lotte Chilsung Beverage and to the strong import beer market. Korea’s beer imports imports already accounted for 10.6% of all beer sales in value and 5.5% in volume in 2014. From January through October last year, beer imports increased again nearly 29% and totaled about $152.
Hite Brewery was the first beer company in Korea when it was founded in 1933. Its Hite beer was so successful that the former Chosun Brewery changed its name to Hite Brewery in 1998. In 2005 Hite acquired the insolvent Jinro Company and was renamed into Hite-Jinro.
Jinro was the producer of the popular soju brand Chamisul. Soju, a distilled beverage with 18% to 45% alcohol by volume containing ethanol and water, is very popular in South Korea and was long considered a “national drink,” before consumer tastes leaned toward low-alcoholic drinks like beer.
Other than beer and soju, Hite Jinro also sells whiskey, wine and Korean rice wine.