Japan makes frothy comeback to top South Korean beer imports in 5 years as boycott fades

Beer worth US$55.5 million was imported from Japan in 2023, as Korean consumers flock to brands such as Asahi and Kirin
Analysts say the recovery was helped by a strong marketing push and a fall in popularity in Chinese beer imports

Japan

Julian Ryall

Published: 12:30pm, 26 Jan 2024

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Five years ago, it was virtually impossible to purchase a can of Japanese beer anywhere in South Korea. But now, Japan’s brewers are once again dominating the imported beer market. And that is music to the ears of brands such as Asahi and Kirin, which have been seeing domestic sales go flat.

South Korean imports from Japan recovered dramatically last year to take back the mantle of most popular foreign beers after languishing behind other brands for five years, according to data from the Korea Customs Service.

Beer worth US$55.5 million was imported from Japan in 2023, up sharply from US$14.5 million the previous year and a mere US$6.9 million in 2021 and US$5.7 million in 2020. Japanese beer imports had risen to a high of US$78.3 million in 2018 but began to fall out of favour the following year, slipping to US$39.7 million, after Tokyo and Seoul became embroiled in a major diplomatic row over the two nations’ shared history that led to boycotts of Japanese goods in South Korea.

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The conflict began in 2018 after Korean courts ruled that former forced labourers from Japan’s colonial occupation era had the right to sue Japanese companies for damages. An incensed Japanese government then removed South Korea from its favoured trading partners list, leading to counter-sanctions and further diplomatic disputes.

As tensions rose, infuriated South Koreans announced broad boycotts of Japanese brands, from Toyota and Uniqlo to Asahi and Kirin beer. Sales were further harmed by the pandemic, with people encouraged to stay home and not socialise.

“Asahi Super Dry is supported by South Korean consumers as a high-quality, premium beer, and it was the most popular brand in the South Korean imported beer market for eight consecutive years between 2011 and 2018,” said Yoshiie Horii, senior manager of public relations for Asahi Group Holdings Ltd.

Horii told This Week in Asia that business shrank because of the boycott campaign in 2019 and the contraction of the beer market during Covid-19, but “sales are on the way to a significant recovery after 2022” when the pandemic began to end.

Korean consumers have also taken to the Asahi Super Nama Jokki Can, a 340-ml can that has been engineered to produce a fine foam when it is opened, giving it the taste of a draught beer poured in a bar, according to Horii.

Cans of Kirin beer at a liquor shop in Tokyo, Japan. Photo: EPA-EFE

Kirin had seen a similar recovery in its beer sales in South Korea, said Russell Roll, a spokesman for Kirin Holdings, who pointed out that exports of its mainstay Kirin Ichiban product were up 245 per cent in 2023 compared to the previous year. Last year’s figures are also up a remarkable 1,286 per cent from a low caused by the boycott in 2020.

“We have been promoting our beer at the same price as other imported beers, not to mention the high quality, so we think we have created a situation where Korean customers can easily pick up our beer,” Roll said.

Like other Japanese brands, Kirin beers were pulled from the shelves of convenience stores across South Korea during the boycott, but now that they are being stocked once more, sales have bounced back, he added.

Roy Larke, senior lecturer in marketing at the University of Waikato in New Zealand and an expert on retailing and consumer behaviour in Japan, suggested the recovery in popularity of Japanese brands was “a combination of a quite significant marketing push, borne of necessity by the big brands, plus the seemingly ‘Japan is perennially cool … even if politicians say it’s not’ vibe that has crossed much of Asia”.

“I’m amazed at how well some other brands have done in South Korea and China, even when the lobbyists are upset about something or other,” he added.

A still from the viral video allegedly showing a worker at a Tsingtao factory urinating in a vat of raw ingredients. Photo:X/@ianbremmer

Japanese brands received an added fillip from an unanticipated source, with imports of beer from China sinking to US$30.1 million, according to customs data, down from US$36.4 million the previous year after a video went viral on social media in October showing a man urinating in a tank of Tsingtao beer.

That led many Korean consumers to turn their noses up at Tsingtao and other Chinese beers, despite protestations from the brewer that the incident took place at a plant producing drinks for the domestic Chinese market and that the tainted batch was never released to the public.

The renewed popularity of Japanese beer in Korea has been a blessing for brewers dealing with stagnating local demand. Japan’s per capita consumption of beer in 2022 stood at 34.2 litres, a slight increase on the previous year, but a figure that saw the country fall from eighth largest per capita consumer of beer in 2021 to 10th place the following year.

People at an eatery in Shinjuku, Tokyo. Beer firms say factors including a shrinking population and a wider variety of alcoholic beverages in the market are to blame for falling consumption. Photo: AFP

Beer firms say a shrinking population, an increasing number of elderly people and a wider variety of alcoholic beverages in the market are to blame for falling consumption, along with greater health awareness. Domestic consumption peaked in the mid-1990s, forcing manufacturers to seek out new markets.

“Our focus for growth opportunities in the global beer market is to expand our core beer brands, particularly Asahi Super Dry, in cities around the world where there is potential to develop them as premium beers,” Horii said.

Asahi is aiming to elevate Super Dry into the top 10 of global beer brands by 2030, with growth of 37 per cent year-on-year in the first nine months of 2023, he pointed out, thanks in part to “the global partnership effect of the Rugby World Cup”.

Equally, the Kirin Ichiban brand is currently available in 40 countries and regions, according to Roll, and the company intends to focus on “young people who are interested in Japan” for further expansion in the East Asian and North American markets.