Lotte, Shinsegae to build whiskey distilleries in Jeju

Retail giants Lotte and Shinsegae are set to enter the whiskey business by constructing distilleries on Jeju Island, home to some of Korea’s best-quality water.

Lotte Chilsung Beverage, Lotte Group’s beverage arm, said Friday that it has recently received the green light from Jeju to change a former tangerine farm into whisky distillery.

“After getting advice from experts, we picked Jeju Island because its natural environment, clean water and temperature are optimal conditions for whisky production,” said an official from Lotte Chilsung Beverage.

The official added the company plans to start construction next year following the final approval from Seogwipo in Jeju scheduled on Wednesday.

“But even if we complete building the distillery, it might take some time to launch Lotte’s whiskey brand since the whisky must be matured for several years,” he said.

Previously, Lotte Chilsung Beverage submitted a distillery construction plan but was rejected by Seogwipo due to an increased amount of wastewater discharge. The city later gave permission to the company after it proved the distillery will not expel a significant amount that would worsen water pollution.

Lotte’s crosstown rival Shinsegae is also considering building a whisky distillery using the factory of Jeju Soju, which was acquired by Shinsegae L&B, the liquor and beverage arm of the Group, in 2016.

In March, Shinsegae L&B applied for registrating 14 trademarks for whiskies including Jeju Whisky, Tamna Whisky and Tamna Pure Molt Whisky.

“We have moved fast to be the first to use the clean and exotic image of Jeju Island in whisky marketing,” a Shinsegae L&B official said.

Lotte and Shinsegae’s push for whisky comes as the two retailers have been eyeing a new business opportunity sparked by a fast-growing “honsul” trend, referring to drinking alone at home.

“Before the coronavirus pandemic, customers had no choice but to drink soju or beer at restaurants or bars, because it is what they sold. But with social distancing measures, many have started to purchase whiskies at supermarkets or convenience stores to drink at home,” said the Lotte Chilsung Beverage official.

According to data from the Korea Customs Service, whisky imports surged on-year by 32.4 percent to $175.3 million in 2021. In the first quarter this year, the cost of imported whisky skyrocketed by 61.7 percent to $52 million, compared to last year.

By Byun Hye-jin (hyejin2@heraldcorp.com)