In the latest sign that the trade spat between Japan and South Korea is intensifying, South Korean imports of Japanese beer have fallen 97% in August, according to a local newspaper report that was picked up by Bloomberg.
South Korea imported only $223,000 worth of Japanese beer in the month, down from $7.57 million a year earlier, according to the Maeil Business Newspaper, which cited preliminary data from Korea Customs Service.
During every year since 2010, Japan has occupied the No. 1 spot for South Korea, with sales surging more than 6x by 2018 to $78.3 million.
The boycott of Japanese goods has spread since Tokyo first imposed export restrictions on key chip materials in July, and worsened as the spat grew to include South Korea’s preferential trade status and an intelligence-sharing agreement.
Asahi Group Holdings Ltd., Kirin Holdings Co. and Sapporo Holdings Ltd., Japan's largest publicly-traded breweries, all export beer to South Korea. And all have identified the South Korean market as having major growth potential.
Consumer-facing brands have been hit particularly hard, with consumers boycotting clothing from Fast Retailing Co.’s Uniqlo, and sales of Japanese cars also falling. Tourism to Japan, a key economic driver of Prime Minister Shinzo Abe’s government, has also been impacted as Korean tourists cancel travel plans and airlines scale back flights.
Some contend that trade wars have no winners. However, shares in South Korean brewer Hite Jinro Co. have risen to their highest level in more than a year as its new year has sold remarkably well.