OB criticized for frequent changes in beer prices

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July. 15. 2021

Biz & Tech Settings 2021-07-14 16:44 OB criticized for frequent changes in beer prices OB CEO Ben Verhaert poses with the “All New Cass” at a press conference held at Sebitseom in Seoul on March 12. Courtesy of OBBy Kim Jae -heun The country’s largest beer maker Oriental Brewery (OB) has been criticized for frequently raising and lowering factory prices for its beer products over the past three years. years. Its price movements comply with a trade law revised in 2019 that allows brewers to freely set the prices of their alcoholic beverages. Under the revised law, OB sought to gain pricing jurisdiction over its biggest rival HiteJinro which quickly increased its market share with its flagship Terra beer, according to industry sources. But repeated changes in the prices of its beer have confused wholesalers and retailers and made it more difficult for them to manage their inventory. They pointed out that it also causes problems for customers. OB argued that it had adjusted prices based on the changing beer market environment. “Other companies are adjusting their beer prices as well, but it looks like we do it more often because we have more beer products than they do,” an OB official said. For 500 milliliter bottles of Cass Fresh beer, OB increased and reduced the price four times between April and October 2019. For Cass Light, the brewer reduced the prices of the 500 milliliter and 330 milliliter bottles once in August 2020 In April of this year, OB again increased the prices of 300 milliliter bottles of Cass Fresh and Cass Light. This is seen as OB’s countermeasure against HiteJinro, which launched the Terra mega-beer which instantly boosted its market share to over 40%. OB’s market share used to exceed 60%, but has fallen below 50% in recent times. Even when the factory price of beer is reduced, the benefit to the customer is limited. Restaurants and bars won’t change their beer prices anyway. It takes a lot of time and procedures for the beers to get from the factory to the restaurants and it is difficult to change the store price based on the changes at the factory.

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