South Korea: Wine sales plunge due to downturn

            Recently plunging wine sales at high-end department stores have
            created a headache due to leftover stock, industry officials said
            yesterday.
            "Sales have dropped coming into the new year," said Chung Jae-wook,
            a spokesman for Shinsegae Co.'s department store division. "We
            believe the economic downturn has dampened the appetite for these
            pricier items, and this may be signaling a change in our
            wine-consumption trend."
            According to the nation's three leading retailers yesterday, wine
            sales had been rising steadily since the department stores
            established a separate wine corner in 2000.
            But as of this year, the wine corners have begun suffering losses
            for the first time.
            Data shows that wine sales in January and February compared to
            dropped by 5 percent at Lotte, 3 percent at Hyundai and 4 percent at
            Shinsegae when compared to a year earlier.
            Even from July-December Lotte Department Store had recorded nearly
            10 percent of growth when compared to the same period in the
            previous year.
            Korea's wine boom was spurred by studies released in 2001 revealed
            that the relatively low stroke rate among the French could be
            attributed to the nation's high consumption of wine. A popular
            Japanese comic book featuring wine further stoked the boom in 2006.
            Hyundai Department Store said it enjoyed 49 percent growth in 2006
            when compared to the previous year, 44 percent growth in 2007 and 51
            percent growth in 2008.
            Coming into the new year, the three to four-month time lag for the
            imports to reach Korea had led both department stores and wine
            importers to make orders in advance.
            But the sudden slowdown in 2009 has begun an accumulation of old
            stock, industry insiders say.
            Hyundai Department Store said its wine stock has expanded by 30
            percent compared to last year. Lotte and Shinsegae said their stock
            began dropping slowly as of the latter half of 2008, and so their
            stock volume is currently similar to that of last year. But they say
            the precise volume has yet to be determined.
            "There's been also a rising demand for cheaper alternatives by wine
            aficionados who would buy more expensive bottles," said Yoon
            Hyun-sik, a spokesman for Lotte Department Store. "Some consumers
            who would buy a 100,000 won bottle of wine would now be opting for
            ones in the 50,000 won range, while those who purchased 50,000 won
            wines would seek those in the 30,000 won range."
            The slowdown has prompted Hyundai Department Store, suffering from a
            large volume of stock, to launch its yearly promotion campaign
            today, about a month earlier than previous years. Department stores
            here have had the tradition of holding the annual wine sales
            campaign in April.
            Shinsegae said it will follow the convention by holding the event in
            April. Lotte said it plans to launch a regular three-day
            wine-tasting event tomorrow. Lotte's annual sales campaign will take
            early April following the norm.
            "It's a challenge now for department-store wine buyers because they
            don't know if they should make new orders, especially with the
            exchange rate posing more risks," Yoon said.