Customers look at bottles of wine at House of Shinsegae at Shinsegae Central City, June 10. Yonhap

Rising market prices in Korea are leading to decreased wine consumption, which is causing a decline in sales at major importers in the country, according to market officials on Monday.

Despite the challenges, companies believe that the wine market will rebound and attract more consumers once the local economy starts to show signs of recovery.

Wine consumption in Korea is heavily dependent on imports. According to the Korea Customs Service, 24,460 tons of wine were imported in the first half of this year, reflecting a 3 percent decrease from the previous six months.

This marks a continuation of a downward trend that has been ongoing since the figure peaked at 40,371 tons in the first half of 2021. Since then, the volume of wine imports has been declining every six months.

The latest consumer price index (CPI) for wine in Korea shows why an increasing number of consumers are opting not to purchase wine. In June 2020, the CPI was 92.58, but by June 2022, it had risen to 105.07. This significant increase in the CPI reflects a rise in overall prices, which is linked to the recent slowdown in wine sales.

Sales data from Korea's four largest wine importers last year clearly highlights the contraction of the country's wine market.

Shinsegae L&B saw sales in 2023 fall 12.5 percent year-on-year to 181 billion won ($130 million). Keumyang International saw sales drop 15.1 percent to 120 billion won. Ayoung FBC saw sales decline 14 percent to 107 billion won and Nara Cellar saw sales fall 20.4 percent to 85.3 billion won.

An official at Shinsegae L&B said the slowdown is evident across the country's entire wine market. He pointed to Korea's waning consumer spending.

"Wine is one of the consumer products that reacts strongly to the fluctuations of the local economy," he said. "For example, we experienced a significant wine boom in 2007, but it quickly sputtered due to the subprime mortgage crisis. Afterward, the wine market recovered and even peaked during the COVID-19 pandemic. However, as the pandemic has transitioned to an endemic phase, we are now witnessing another decline in the wine market."

Wine importers, however, are holding onto hopes that new marketing strategies will eventually boost sales and revive the market.

Some companies have begun to strengthen their premium wine selections. Last month, Shinsegae L&B launched House of Shinsegae, a new store dedicated to high-end wines at Shinsegae Central City in downtown Seoul. Meanwhile, affordable wines at discount stores like E-Mart continue to sell well, even surpassing soju in sales.

"I am optimistic that as the economy improves and we see signs like a reduction in the country's base interest rate, wine demand will begin to rise again," the official said.