Edrington joins Diageo in shutting Korean business

Spirits giant Edrington is to close its office in Korea amid poor sales.

Spirits giant Edrington invested millions in a state-of-the-art Scotch whisky distillery and visitor centre in 2018. (Photo: Simon Price/PA Wire)

Edrington has become the latest distiller to close its office in Korea as sales of whisky have almost ground to a halt.

The company has entered into a consultation to offer support for workers who will be displaced by the closure, and to find a distributor for its whisky brands such as The Macallan.

A spokesperson for Edrington said: “After a review of our business model in the Korean market, it is our intention that Edrington Korea will cease operations by 31 March 2020. We have entered into consultation with our people to ensure that we provide support during this period. A decision on the route to market for Edrington’s portfolio of brands in Korea will be made in the coming months.”

South Korea’s whisk(e)y sales have been on a downward turn for the past decade, as the spirits sector has become more diverse and Korean consumers have instead bought wine and local spirits.

Sales declines in Korea have hit both Diageo and Pernod Ricard. In January last year, Pernod Ricard said it would cut more than 50% of its South Koreas workforce and outsource the distribution of Imperial to a third party.

Diageo will close its whisky plant in Icheon, South Korea, this year. The company blamed “low” utilisation and “cost competitiveness”.

The Johnnie Walker whisky owner said in its 2019 fiscal results that net sales in north Asia declined 6%. In Korea, net sales dropped 11%.

Pernod Ricard SA also placed its entire stake in Pernod Ricard Korea Imperial Co. – which owns Korean whisky brand Imperial – up for sale in January last year. Pernod Ricard Korea Imperial logged a net loss of 3.5 billion ₩ (£23 million) for its fiscal year ending June 2018.