E-Malt.com News article: South Korea: Oriental Brewery outperforming Hite Jinro in beer exports

Oriental Brewery (OB), Korea's largest brewer, has been outperforming rival Hite Jinro in exports as it makes the best use of the extensive global network of its parent, Anheuser-Busch InBev (AB InBev), according to industry officials.

OB's diverse product portfolio also has appealed more to consumers in more than 30 countries, boosting outbound shipments over the past few years.

For instance, the company's flagship brand Cass has been the best-selling beer in Mongolia, while its Hong Kong brand Blue Girl has captured the largest market share in the Chinese territory.

In contrast, Hite Jinro has seen beer exports decline over the years because sales in Japan have plummeted in the line with the yen's continued weakness. The stronger won has made Hite's beer and soju, distilled liquor, more expensive for Japanese consumers, sending sales in the brewer's largest foreign market plunging.

OB, headed by CEO Frederico Freire, said the brewer has been able to increase its overseas sales as Cass and other brands have received favorable reviews from consumers in more than 30 countries. Since exports exceeded $100 million in 2012, the amount has continued to climb, the company said.

"In 2012, our outbound shipments reached $100 million and we shipped more beer in 2013 and 2014," an OB spokeswoman said.

Blue Girl, a premium pilsner lager, is made by OB and marketed by Hong Kong's Jebsen Group.

The spokeswoman said she cannot disclose the firm's export volumes because of global compliance policies, but said outbound shipments have been increasing. In April 2014, AB InBev acquired OB ― which accounts for about 60 percent of Korea's beer market ― for $5.8 billion.

"Many people do not know that we earn hard currency by exporting beer to dozens of foreign countries," the spokeswoman said. "We export many products under an original design manufacturing (ODM) deal with local brewers in respective countries. We will make more effort to boost exports and make inroads into more foreign markets."

In contrast to OB, Hite Jinro, headed by CEO Kim In-kyu, has seen its exports decline for four consecutive years. In 2012, its beer and soju exports totaled $136 million, but dropped to $127 million in 2013 and $116 million in 2014.

The company expects its 2015 exports will likely fall from last year as sales remain sluggish in Japan and other foreign markets. In particular, Hite has been struggling in Japan, its largest overseas market that takes more than 80 percent of Hite's exports.

"Our declining exports are largely attributed to the won's strength against the yen and other currencies, which makes our products more expensive abroad," a Hite Jinro spokesman said. "But there is nothing we can do about the yen's weakness. Despite unfavorable conditions, we will continue to do business in Japan and other foreign markets."

He said given the yen's continued depreciation, the brewer's exports will likely continue to fall this year and beyond.


17 July, 2015