S KOREA: Hite Jinro purchase ruffles feathers
Hite Brewery Co. has encountered opposition to its pending acquisition of liquor maker Jinro.Opponents to the purchase fear that, as Hite controls 58% of the country's beer market and Jinro has a 55% hold on the soju market, Hite could squeeze smaller rivals out of the liquor market.
"If Hite gets approval for the acquisition, it will take control of the nation's liquor distribution network," Kim Jun-young, president of the second largest brewer Oriental Brewery, told reporters yesterday (13 July).
The city council of Gwangju, south of the capital Seoul, also said yesterday that the purchase will have a negative impact on the regional economy, Yonhap English News reported. Oriental and Bohae Soju have facilities located in the city.
Hite has dismissed the fears. "Their concerns are totally groundless," the brewer said, "because what matters now is not distribution channels but brand power."
Last month, a consortium led by Hite signed an agreement to buy Jinro for KRW3.4 trillion (US$3.25bn). The brewer is expecting a decision from South Korea's Fair Trade Commission on Wednesday (20 July).
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