Shinsegae to Shut Down Whiskey Business as Sales Drop

Shinsegae Inc., a South Korean department store franchise, is reportedly withdrawing from the whiskey industry and will pull out its alcoholic products from the market. The company's liquor subsidiary, Shinsegae L&B Co., Ltd., decided to disband its whiskey business despite the growing demand for spirits.

It was revealed that Shinsegae L&B, which is operating under the E-Mart Inc. convenience store chain, made this decision due to falling sales. The Korea Economic Daily reported that the department store chain's beverage division turned to red from January to September this year as spirits sales plunged.

New Focus After Whiskey Market Exit

Moreover, the pull-out from the whiskey retail industry came as its key business, which is wine import and distribution, has been shaken by the low, sliding sales amid the economic slowdown. It was reported that Shinsegae L&B recorded a net loss of KRW10.4 billion or $8 million in the first nine months of 2023. The number is 10% lower, or KRW135.7 billion less than the previous year in the same period.

As the company exits from the whiskey business, Shinsegae Inc. plans to shift its focus to profitability instead of external growth. On Thursday, Dec. 28, Shinsegae Group's vice chairman Chung Yong Jin delivered his New Year's message, where he pointed out that profitability must come first when the company makes strategic decisions related to business expansions, entering new industries, and other matters.

"It would be grateful if a large company helped develop the domestic whiskey industry, which is still in its infancy, but it must survive first before it can be promoted in the future," an official from the spirit beverage sector commented on Shinsegae's move to pull out. "The whiskey business is a regulated industry and it is not possible to make an immediate profit, and it is a long-term investment. In terms of management strategy, it may be a wise choice to withdraw in the early stages when investment is necessary but no large-scale investment has been made."

Shinsegae's E-Mart 24 to Sell Special Cheongryong Wine Set

Meanwhile, as Shinsegae discontinues its whiskey business, its E-Mart 24 convenience store subsidiary will sell a wine set featuring the blue dragon to mark the coming of 2024, the Year of the Blue Dragon.

Shnsegae announced on Friday, Dec. 29, that it has collaborated with the "Dragon Village" video game to introduce the wine and other products in time for the New Year. An official at E-Mart 24 said in a press release, "We have prepared differentiated products and various promotions with the 'blue dragon' motif to celebrate the year of Gapjin in 2024. We hope you have a lively new year while enjoying the dragon-related products and events prepared by E-Mart 24."

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