South Korea: Korea loses 1,900 beer pubs in a year as drinking declines
Beer pubs, long the default venue for after-work company dinners in South Korea, are disappearing fast. High inflation has pushed up dining costs, while a shift away from company dinners and second-round drinking has cut alcohol consumption itself. The number of beer pubs, once above 30,000, has now fallen below 20,000, Seoul Economics Daily reported on October 8.
The number of beer pub operators nationwide stood at 19,507 as of August this year, according to National Tax Service data released on the 8th. That is down 1,894, or 8.9%, from 21,401 a year earlier. The figure fell below 20,000 for the first time in May, to 19,863, and has kept declining since.
Beer pub operators numbered more than 30,000 until the COVID-19 pandemic. The total slipped below that mark in November 2020, to 29,872, and has fallen steadily since. Smaller drinking establishments show a similar pattern. Their operators totaled 7,775 as of August, down 717, or 8.5%, from 8,492 a year earlier.
The trend cannot be attributed to conditions for small business owners alone. Koreans are drinking less. Domestic alcohol shipments totaled 2,987,726 kiloliters last year, down 5.2% from 3,151,371 kiloliters a year earlier. That is the lowest level since the data series began in 2018. The value of those shipments fell 3.6% over the same period, to 9.6952 trillion won from 10.0575 trillion won.
The decline in alcohol consumption looks more like a long-term trend. Last year's shipment volume was the lowest in 27 years, since the 2,922,000 kiloliters recorded in 1998 during the Asian financial crisis. Compared with 3,804,000 kiloliters in 2015, a decade earlier, it is down 21.5%.
Analysts point to rising health consciousness, population aging and decline, and changing company dinner culture among office workers. Younger drinkers in particular are cutting back on drinking occasions, choosing hobbies or exercise over the repeated rounds of company dinners that once stretched late into the night.
With consumption falling, taxes are adding further pressure on beer pubs. The government plans to end a temporary 20% cut in the liquor tax on draft beer at the end of this year.
The liquor tax on regular beer is currently 885,700 won per kiloliter. Draft beer is taxed at 708,560 won, 20% lower. Once the reduction expires, draft beer will be taxed at the same rate as regular beer.
An education tax equal to 30% of the liquor tax, plus value-added tax, is levied on top of that. The structure means the tax burden on draft beer will rise from the shipment stage.
The question is who absorbs the added cost. If owners pass it all on, consumers will pay more for draft beer. If they hold prices steady, owners already facing falling revenue will shoulder the tax increase themselves.
Industry estimates suggest the price of a 500-milliliter glass of draft beer could rise by 500 to 1,000 won. But with alcohol consumption already in decline, owners may absorb much of the increase out of concern that higher prices would drive away more customers.
In a report on the impact of the 2026 tax code revision on small businesses, the Korea Federation of Micro Enterprise said small restaurants and pubs unable to raise prices were likely to absorb the costs directly.
As fewer consumers reach for alcohol, the industry is shifting its strategy. People who drink at least once a month did so an average of 8.8 days a month, down from 9.0 days in 2023, according to a 2025 survey on the liquor industry by the Ministry of Agriculture, Food and Rural Affairs and the Korea Agro-Fisheries & Food Trade Corp. (aT). Average consumption on days when they drank fell to 6.6 glasses from 6.7 in 2023.
The report found that drinking at home and drinking alone have persisted since the COVID-19 pandemic, and that the purpose of drinking is also changing. Rather than drinking to get drunk, consumers are increasingly drinking lightly alongside food, broadening the range of beverages they choose.
A similar pattern is emerging globally. Worldwide alcohol consumption fell 1% in 2024 from a year earlier, according to the International Wine and Spirit Research (IWSR). Korean producers are responding with a steady stream of lower-alcohol and non-alcoholic products aimed at new demand.
Some other countries, by contrast, have cut or capped taxes on draft beer in light of falling consumption and the burden on small business owners. Britain introduced Draught Relief for beer sold in pubs as part of a 2023 overhaul of its alcohol duties and later widened the discount. As of its 2024 announcement, the rate gap for beer and cider had widened to 13.9%.
09 October, 2026
