Since about a year ago, the mood among the Korean wine industry has been somber. Too many companies chasing the same small circle of growing wine lovers has created a surplus situation, which still exists today. It is not that wine consumption is not growing, growth is quite healthy in fact, but this growth has been surpassed by the sheer enthusiasm of the wine trade. Wine bars, retailers, importers and distributors of wine have been growing at an alarming rate over the past several years. Wine mobile applications have fizzled as well as wine publications such as Winies.
The global financial meltdown starting in late September 2008 did not help matters. Currently, nearly every major chaebol (major conglomerate) is involved in wine importing, distribution or sales. This has led to a price war with slim margins (rumoured to be in the single digits) for most importers and retailers. Even with the more positive economic outlook for 2010, few Korean wine importers appeared happy about the prospects for the remainder of the year.
The current market correction, as painful as it may be, will be healthy for the Korean wine industry in the long run. The strong companies will continue to grow and improve their wine offerings and wine education to try to find unique ways to attract and retain consumers. From the consumers’ perspective, this will be the best time to stock up on wine and learn more about wine – the city is brimming with wine tastings and dinners organised by the trade.