E-Malt.com News article: South Korea: Draught beer about to get more expensive in South Korea

From the end of this year, South Korea will slash the 20% tax break on draught beer, the government has announced in the 2026 tax reform plan, with bars across the country bracing for cost increases, the drinks business reported on August 4.

Bars and restaurants across South Korea are steeling themselves for price hikes after the government announced that the 20% tax holiday on draught beer will end from next year, according to the Ministry of Finance and Economy’s 2026 tax reform package.

Currently, beer taxes are decided on volume instead of price. While standard beer is taxed at 885,700 won per kilolitre, the tax rate for draught beer is 708,560 – thanks to the 20% discount the category has been subject to since 2020.

Six years ago, the government issued the 20% tax holiday in a bid to help the draught beer industry, whose tax burden had grown disproportionately large, and the application period has since been extended multiple times. However, officials have now decided that the beer sector has sufficiently benefited from the reduction, prompting the decision to end it later this year.

From 2027, the tax burden per glass is projected to rise by about 130 won, with the tax rates for draught beer lifting to come in line with regular beer. This will see the tax burden for draught beer increase by 177,140 won per kilolitre.

When education tax and value-added tax is taken into account, the tax burden at the shipment stage is expected to soar by more than 200,000 won per kilolitre.

Converted to a single 20-litre keg of draught beer used by ordinary establishments, the tax adds about 5,000 won more, translating to around 130 won per 500ml glass for consumers.

While this may not seem like much per glass, the accumulated amount can grow significantly for larger venues with high sales volumes. Korea’s hospitality sector, which is already grappling with surging costs of labour, rent and raw materials, is worried that the draught beer price hikes will lead to higher costs for the consumer.

Over the past eight years, nearly half of Korea’s pubs have shut for good. Figures released by the National Tax Service (NTS) show that the number of casual pubs and beer houses nationwide fell to 28,178 in March 2026, down from 52,302 when records were first compiled in 2018. The decline means more than 24,000 establishments have disappeared, representing a 46% contraction in the sector.

Casual pubs, known locally as ganee jujeom, recorded a 10.2% annual decline, falling from 8,894 to 7,985 businesses. Beer-focused establishments, or hof pubs, dropped by 9.4% over the same period, from 22,282 to 20,193.

Years of elevated inflation have increased rents, labour expenses and operating costs, placing pressure on small independent businesses that dominate South Korea’s pub sector. At the same time, traditional after-work drinking gatherings which were once a staple of corporate culture, have become less common, with consumers drinking less across the board.

The proof is in the numbers, with South Korea’s household alcohol spend seeing its sharpest drop in seven years in the first quarter of 2026.

Traditionally, quarters containing the Lunar New Year or Chuseok holidays have seen alcohol purchases surge, but even these periods have now seen sales slip as alcohol sales dry up.

This is reflective of a broader regional trend, as consumers cut back on alcohol across the Asia Pacific region. Last year, three in 10 APAC consumers said they were drinking less alcohol in 2025 versus the prior year, according to data from NielsenIQ.

“APAC consumers are no longer drinking out of habit — they’re drinking with purpose,” James Phillips, head of beverage alcohol APAC at NielsenIQ, previously told the drinks business.

He added: “The shift toward mindful consumption is not a passing trend, but a cultural reset that’s redefining how, when and why people drink. The key question – is this the new normal in the on-premise?

“If so, it presents big challenges for suppliers, manufacturers and operators, including the need to cater for moderating guests without alienating core consumers.

“Brands that can gain a deep understanding of this complex recalibration and adapt nimbly will be the ones that stay relevant in the months and years ahead.”


04 August, 2026