The recent takeover bid by Korean retail giant Shinsegae Group
for “Jeju Soju” last week proves the passion of the group’s vice chairman Chung Yong-jin
for the liquor business again.
Chung, who is known to be a wine enthusiast, has expanded the company’s business in this area for the past few years by entering into the wine import and distribution business, and by opening the craft beer-centric bar Devil’s Door in Seocho-dong, an affluent part of southern Seoul.
Shinsegae Group vice chairman Chung Yong-jin
The latest move is an acquisition bid for a small soju maker in Jejudo Island. Soju is distilled, vodka-type Korean rice liquor – the nation’s most famous and affordable alcoholic beverage.
On June 9, E-mart of the Shinsegae Group, the nation’s largest discount supermarket chain, said it had jumped into the soju market by signing a memorandum of understanding with Jeju Soju for its acquisition.
Beyond supermarkets, E-mart, in which the vice chairman holds a 10 percent stake, has led new business projects, including the convenience store business.
Market watchers forecast the deal with Jeju Soju to be worth an estimated 30 billion won (25 million) – a tiny sum when compared to the business scale of the retail behemoth whose revenue reached 13.5 trillion won last year.
But E-mart expects the takeover deal to advance the company as a liquor maker and exporter.
“Jeju Soju will focus on the local market for the time being, but in the longer-term, the company will seek business opportunities overseas using the retail networks of E-mart abroad,” said Choi Byung-min, a Shinsegae Group spokesperson.
Apart from E-mart’s aims, market watchers said the real trigger behind Shinsegae’s expansion of its liquor businesses is the passion and interest of the group’s vice chairman.
Take for instance the opening of the first Devil’s Door pub in 2014.
The high-end craft beer brewery was opened by Shinsegae Food, a food and food service arm of Shinsegae Group. Its vice chairman allegedly played a key role in this American-style gastropub, down to checking the menu and interior of the pub. The concept, which combines a restaurant and a craft beer pub, has been a hit and Shinsegae Food will open two more Devil’s Door pubs this year.
“Some people criticize the tycoon’s entrance into small-scale liquor or restaurant businesses, but others are waiting for his creative business ideas in the fun and lifestyle sectors,” an industry insider said.
By Seo Jee-yeon (email@example.com