January 10, 2025
SEOUL – For many around the world, soju is a symbol of South Korea’s drinking culture.
Yet, given its origins predating the division of the Korean Peninsula, this iconic distilled spirit counts another country as one of its original producers today: North Korea.
Soon, Russia may see soju from both Koreas sharing shelf space, a close ally of North Korea and a market already penetrated by South Korean liquor companies.
According to Russian business daily RBC in December last year, North Korea has laid the groundwork for marketing its soju through Naegohyang, a company linked to the North Korean military, by filing for trademark registration with Russia’s Federal Service for Intellectual Property, or Rospatent.
The application was filed under four classes of the International Classification of Goods and Services: kimchi, bread, alcohol and tobacco products. However, the alcoholic category does not include beer, according to the local paper.
This could mark the first alcohol application by a North Korean company in Russia, according to Andrei Lankov, a professor of Korean studies at Kookmin University in Seoul.
Yet, NK News, an English-language news outlet focused on North Korea, reported that the Taedonggang Brewery, a North Korean beer maker, registered its brand in Russia last August, but its beer has yet to appear in the market.
The move has gotten people talking, with some speculating that Pyongyang seeks to commercialize its goods and expand into overseas markets as part of broader efforts to deepen ties with Moscow.
If imports are greenlit, North Korea’s entry into the Russian liquor market could give rise to competition with South Korean companies, whose soju products have won over consumers globally.
Yet, doubts persist over whether North Korean soju can compete effectively with the more diverse and lower-alcohol offerings of South Korean soju producers.
“It seems unlikely that North Korean sojus will lead to direct competition, as their high alcohol content of over 40 percent positions them as competitors to other hard liquors like whiskey,” said an industry official who wished to remain anonymous.
North Korean soju, known for its traditional style and high alcohol content exceeding 30 percent, differs significantly from its South Korean counterparts. South Korean commercial soju typically contains 15 to 20 percent alcohol, with flavored varieties having less than 15 percent.
South Korea’s top soju maker, HiteJinro, for instance, plans to focus on promoting its fruit-flavored alcoholic drinks, which generated 33.4 billion won ($22.9 million) in exports in the first half of last year — outperforming soju’s 26.8 billion won and beer’s 8.7 billion won over the same period.
Another industry official noted that fruit-flavored drinks may be a better alternative to typical soju, as they align more closely with European culinary culture, explaining that diluted soju is largely confined to Korean cuisine.
South Korea’s soju exports surpassed $100 million in 2023, marking a milestone a decade after first reaching this level in 2013, with Japan, the US and China leading imports, according to the Korea Customs Service.
Grouped into a separate liquor category, exports of fruit-flavored varieties totaled $91.6 million in 2023, accounting for 28.1 percent of all liquor exports, slightly lower than the 31.1 percent share of regular soju exports.
Although still trailing behind other nations, the export volume of soju to European countries surged by 155.9 percent in 2023 compared to 2020, fueled by the continued overseas expansion efforts of industry leaders like Hitejinro and Lotte Chilsung. However, it is primarily Western European countries such as France, the Netherlands and the UK, that dominate the soju export market.
With the establishment of its Russian subsidiary, Hitejinro Rus, in 2013 to expand its footprint in the Russian liquor market, Hiteinro showed a strong upward trajectory, achieving an average annual growth of 76 percent from 2017 to 2020. Russia is one of 17 countries the firm has chosen as a strategic focus for its expansion plans.
Lotte Chilsung, which first entered the Russian market in 1990 by selling various beverages, also established a corporate entity in Russia in January last year as part of a strategic move to strengthen its global business capacity.
Amid the market endeavors of Korean liquor makers, however, Russia remains a tough market especially in recent years, with the ongoing war limiting marketing activities in the region.