South Korean authorities refuse the industry's request for online distribution or delivery of alcoholic beverages.
The South Korean liquor industry demanded that online sales be allowed in non-face-to-face sales and liquor delivery through existing distribution channels such as convenience stores. The South Korean authority has denied this request.
According to New Daily Biz, last February, the National Tax Service (NTS), responsible for online sales of products and services, held a meeting with the alcohol beverage, including liquor distributors, craft beer associations, and imported liquor associations. During this meeting, the industry argued that online sales of alcoholic beverages are essential in the era of "living with Corona." They proposed alternatives to sell and deliver non-face-to-face at convenience stores to protect small commercial districts. In fact, since the beginning of COVID-19, related industries such as the Korea Craft Beer Association have consistently demanded that the NTS allow online sales of alcoholic beverages due to the sharp decline in sales of alcoholic drinks at stores such as restaurants and pubs. Despite the increased consumer demand for online sales and delivery of alcoholic beverages, the NTS has been reluctant to allow online liquor sales due to youth accessibility issues and small retailers' survival rights.
Under the current Korean law, liquor sales happen only through face-to-face transactions. In 2017 online sales of traditional alcoholic beverages were allowed to expand the liquor market. From April 2020, regulations were further eased to enable the delivery of these beverages by restaurants. This applied to products whose prices were less than 50% of the cooked food by the delivery restaurants.
Last year, liquor vending machines in restaurants were also allowed to be installed, and alcohol can be purchased through "smart orders" using mobile phone apps. The smart ordering system allows online ordering of alcoholic beverages; however, only the person placing the order is allowed to pick up the ordered product following face-to-face verification procedures at a store. The industry argues that non-face-to-face sales and delivery must be carried out together.
A part of the industry suggested permitting online sales and delivery of alcoholic beverages only on existing small distribution channels such as convenience stores. However, the NTS rejected the alternative, saying it was not realistic as these stores can't afford to deliver alcohol due to a single-person operation. The ball is now in the industry's court to bring additional alternatives for further discussion by the authorities. But the discussion regarding online sales and delivery of alcoholic beverages does not only impact the national products. In Korea, the wine market accounts for the most significant portion of imported liquor. In the first half of 2020, smart-order sales for imported liquor began partially easing. Consumers accustomed to non-face-to-face purchases enjoyed ordering wine on their smartphones and receiving their online orders at convenience stores or offline retailers.
Amid COVID-19, imported wine established its firm position in the liquor market in Korea. In this atmosphere, the European Chamber of Commerce in Korea (EUCCK) disclosed its 2021 regulatory environment white paper suggesting that NTS expand the smart-ordering of alcoholic beverages.
Interest in the complete easing of "online liquor sales" is heating up again with the change of government administration, considering the new cabinet's ambitions to revolutionize industrial regulations.
Source: New Daily Biz , The Korean Bizwire
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