The average import price of whisky climbed 0.23 percent despite lower tariffs since the Korea-EU free trade agreement (FTA) took effect in July last year, reported the Green Consumers Network (GCN) Sunday.
The average import price for 15 kinds of Scotch whisky stands at 2,664 won ($2.27) per 100 milliliter (ml). Distributors purchase the Scotch whisky from importers for 8,376 won per 100 ml and sell the liquor for 13,501 won per 100 ml to consumers. Therefore, importers and distributors earn 10,837 won for every 100 ml sale of Scotch whisky.
Consumer prices of Scotch whisky are higher than import prices by 5.1 times, which is an excessive gap, even though several taxes including tariffs, liquor taxes, education taxes and distribution costs are applied to import prices.
“Such excessive gap means importers are generating unreasonably high profits by setting the whisky prices high in the distribution process, as most of the importers are domestic branches of whisky manufacturers overseas and have a monopoly on distribution of whisky in the Korean market,” the GCN explained.
Consumer prices of 28 kinds of Scotch whisky imported from the EU jumped 0.23 percent from 41,103 won per 100 ml in May last year, when the Korea-EU FTA had yet to go into effect, to 41,200 won as of May this year.
The GCN requested whisky importers and distributors to set reasonable prices and offer accurate information on price changes. In addition, the GCN urged the Korean government to reduce distribution structures to cut costs and revise the law so as to have import prices unveiled.