Jung, a 36-year-old who opened a bar in Dongtan, Hwaseong, in Gyeonggi Province in April 2021, switched to running a taco restaurant after customer traffic failed to pick up even following the COVID-19 pandemic. The taco shop, chosen to tap dining-out demand, also struggled and the business closed last year. "In the past, it was natural to meet and socialize at bars, but now that culture itself seems to have largely disappeared," Jung said.
According to data obtained by The Seoul Economic Daily from the National Tax Service through the office of People Power Party lawmaker Ahn Sang-hoon on the 15th, liquor tax on domestically produced alcohol totaled 2.4352 trillion won ($1.7 billion) last year, the lowest level in six years. That was down about 114.3 billion won, or 4.5%, from a year earlier, marking a second straight annual decline after 2024. Compared with 2023, the figure fell about 388.1 billion won in two years.
Among domestic products, the declines were pronounced for beer and diluted soju, the two leading categories. Compared with 2023, beer tax fell about 111.6 billion won last year and diluted soju tax dropped about 263.2 billion won. In contrast to the broad decline in domestic products, tax on imported alcohol rose 1.9% from a year earlier to 716.7 billion won last year. Total liquor tax, combining domestic and imported products, came to 3.1519 trillion won, down 3.1% from a year earlier.
Alcohol shipments also hit their lowest level in six years. Domestic alcohol shipments totaled 2,987,726 kiloliters last year, down 7.1% from 2020 and falling below 3 million kiloliters for the first time. Shipments of beer and diluted soju fell 7.2% and 2.8%, respectively, from a year earlier.
The shift in drinking habits among younger people is also clearly visible in commercial districts. According to commercial district analysis data from Sosanggongin 365, a government small-business information platform, the number of bars declined in all 25 districts of Seoul in the first half of this year compared with the second half of last year. Even within the same area, the character of commercial districts diverged by consumer base: areas with heavy foot traffic among people in their teens and 20s formed cafe- and restaurant-centered districts, while areas with many office workers in their 30s to 50s formed districts where bars account for a larger share of sales.
Drinking indicators for people in their 20s have also fallen noticeably. The monthly binge drinking rate among people in their 20s fell 8.0 percentage points for men and 6.2 percentage points for women last year from a year earlier. Analysts say the spread of a tendency to avoid heavy and binge drinking, centered on younger people, is affecting both alcohol consumption and commercial districts.
As younger consumers change where they go, small business owners are also changing the types of businesses they choose. Some are converting existing bars into other types of businesses, while others pick sectors with demand from younger consumers from the start. Choi Jin-seo, 29, who has run a cafe in Guri, Gyeonggi Province, for five years, said: "Cafes have steady demand from younger consumers, so the burden was relatively light for a first attempt at running a business. Having run a business myself, I can clearly feel the difference between districts favored by younger consumers and traditional districts."
The decline in alcohol consumption is seen as reflecting weak consumer spending as well as changing drinking habits among younger people. According to the Ministry of Data and Statistics, the retail sales index excluding passenger cars fell 0.8% last year from a year earlier. It has declined for four consecutive years since 2022, the longest stretch of decline since the statistics began.
Ahn said: "The fact that even alcohol consumption has frozen to a six-year low is evidence that domestic demand is going backward rather than recovering. The government must abandon complacent optimism and urgently prepare measures to revive domestic demand."