South Korea: Korean distributor dumps entire inventory of Carlsberg beer after contract dispute

GoldenBlue, a Busan-based whiskey maker and distributor of imported liquor, said it has disposed of its remaining inventory of Carlsberg beer in the aftermath of a so-called gapjil (abuse of power) from its Danish partner back in March, the Korea JoongAng Daily reported on November 28.

The discarded Carlsberg products, inclusive of their disposal costs, account for a sum of 490 million won ($378,100).

“As the dispute after halting the distribution of Carlsberg products hasn't been resolved, and with ongoing expenses like storage costs causing further losses, we had no choice but to dispose of all remaining Carlsberg product inventory,” a GoldenBlue official said on November 28.

GoldenBlue entered import and distribution contracts with Carlsberg Group in April, 2018. However, Carlsberg Group served a contract termination notice to GoldenBlue this past March, prompting the cessation of its Carlsberg beer distribution.

The Korean liquor company called Carlsberg's “unilateral” termination of that contract an act of gapjil.

“We have elevated the Carlsberg brand from the Top 15 to the Top 10 position among imported beers in Korea through substantial investments, including new hires and the establishment of a Beer and Spirits division,” a company spokesperson told the Korea JoongAng Daily Tuesday. “While the Carlsberg Group did not disclose a reason for terminating the partnership, we believe that the group misled us by initially appearing to secure long-term contracts while in the end entering the domestic market through its own entity.”

GoldenBlue claims that Carlsberg terminated the companies' initial import and distribution contract at the end of 2021. The partnership was then maintained through short-term contracts, which were only in effect for two to three months at a time, until November 2022. Just a month prior, Carlsberg had established its own sales office and begun distributing products directly through Carlsberg Korea.

GoldenBlue, in response, filed a complaint with the Fair Trade Commission (FTC) against Carlsberg Group on July 5, alleging unfair practices such as the refusal of trade and forced sales targets. The FTC began investigating the complaints in mid-September.

“We hope for the eradication of such cases of gapjil by global companies,” GoldenBlue said. “We will seek measures to prevent recurrence as a Korean company that has suffered damage.”

Carlsberg Group hasn't responded to Korea JoongAng Daily's request for comments as of press time on November 28.

28 November, 2023