E-Malt.com News article: South Korea: Oriental Brewery to invest $117 mln in improving quality of its products

Oriental Brewery (OB) CEO Chang In-soo apologized on September 16 for a recent dispute over the alleged odour of disinfectant in its Cass beer and pledged to invest 120 billion won ($117 million) to improve the quality of the company's products, The Korea Times reported.

In a press conference, Chang said the brewer has been making all-out efforts to upgrade its quality-control system to be on a par with those of Anheuser-Busch InBev (AB InBev) and other global brewers.

''OB is overhauling its entire business process, spanning from production to sourcing and distribution, to introduce world-class product quality management systems at our three plants,'' Jang said. "I apologize for causing concerns for the dispute (over the smell)."

OB operates three plants in Gwangju and Icheon, Gyeonggi Province; and Cheongju, North Chungcheong Province.

"In 2006, AB InBev introduced a stringent quality management program called Voyager Plant Optimization (VPO). In cooperation with our parent firm, we will produce Cass and other beer brands in accordance with the VPO standard. We will place top priority on our quality control procedures and meeting customer needs,'' the CEO said.

In April, AB InBev acquired OB, which accounts for about 60 percent of Korea's beer market, for $5.8 billion.

Jang's apology and pledge to improve product quality came after complaints posted on the Internet in June that some people had detected the smell of disinfectant in OB's Cass-branded canned, bottled and draft beers.

OB filed a complaint with police, asking law enforcement authorities to investigate those who spread what the firm called baseless rumors about its products. As part of their investigation, police officers raided the headquarters of Hite Jinro, the second-largest brewer, over allegations that the company had spread rumors about its larger rival.

In August, the Ministry of Food and Drug Safety said the substance causing the smell in the beer was harmless. It said trans-2-nonenal, an organic compound formed in the brewing process as a result of oxidation, was the cause. It recommended that the company monitor its brewing facilities more closely.

''I have been known as a good salesman in the liquor industry over the past 30 years. From now on, I want to become a businessman who successfully transforms OB into a brewer that produce the highest-quality products,'' Jang said.

In addition, OB plans to launch a ''shared-growth'' program. The company will invite brew masters from AB InBev to share their knowhow on beer brewing with those who make their own beer or open a small beer bar.


17 September, 2014