South Korea: Korean National Assembly has passed a law calling for downward adjustments on the beer tax, Government sources were cited in Korean newspapers on December 11. Currently at 100%, the tax would drop to 90% in 2005, then to 80% in 2006 and down to 72% in 2007. The factory price for a 500ml bottle of beer would consequently drop from the current 1,015.60 won (US$0.867) to 958.19 won in 2005, 900.80 won in 2006 and 854.86 won in 2007. However, actual consumer prices are expected to differ in accordance with the type of vendor due to varied distribution margins. Lawmakers said that the measure to cut the tax on beer is aimed at narrowing the gap of alcohol tax rates between beer and distilled liquors like whiskey. Local beer lovers have been complaining about the higher tax on beer, which stems from trade pressure, according to Korea Times.

Korean beer maker, Hite Brewery Co. jumped on the back of optimism prompted by the recent government announcement that it will lower beer taxes, The Korea Herald posted on December 16. The gain in share price came despite reserved opinions expressed by foreign securities companies that the effect of the tax reduction will be marginal. The share jumped nearly 8 % in early trading yesterday before stabilizing about 6 % higher and the price standing at 83,200 won per share as of 2:48 p.m.

17 December, 2003