Items

Issues

Recommendations
  • Warehousing
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    Currently domestic liquor producers/manufacturers can have as many warehouses as they like to store and distribute their goods. A liquor importer, who like the domestic manufacturer sells to a wholesaler, is allowed only three warehouses. One in the area where the import license was issued, one at the entry port, and one additional warehouse in a location of their choice. All warehouses can be used for storage, but only one can be used for distribution of goods, however. This arrangement is clearly discriminatory, and places unnecessary and costly restrictions on Liquor Importers.

    Under the current legislation by MOFE/NTS two problems arise:
    Firstly, that liquor Importers are classified in the same category as domestic wholesalers; and, Secondly, that the additional warehouses are only permitted to be used for ‘storage of goods’ and not for ‘distribution’ which makes them useless.

    Like domestic producers, liquor importers sell product to wholesalers. In our opinion, Liquor Importers should therefore be classified in the same category as domestic liquor producers/manufacturers and allowed as many warehouses as they wish.

    If this alternative is not possible immediately, then the current classification of the 2 additional warehouses as ‘storage only’ facilities should be changed and re-classified to: ‘storage and distribution facilities’.

  • Labeling

    • Imported Liquor products are required to include at least 18 pieces of information in Korean on the label.

    Korea’s labeling requirements for alcohol products far exceed those provided for in the CODEX ALIMENTARIUS General Standard that covers the labeling of alcohol products; and it should be noted that WTO rules require that measures taken: to be least trade restrictive and proportionate. The European Confederation of Spirit Producers (CEPS) and the EUCCK therefore believe that Korea’s labeling regime is incompatible with existing WTO rules under the Agreement on Technical Barriers to Trade (TBT), which mandate that countries should use internationally agreed-upon standards where they exist.

    Many of Korea’s labeling requirements are unnecessary, costly, inconsistent with standard international practice, and therefore, constitute a barrier to trade.

    Korea should, therefore:

  • Repeal the labeling requirements that exceed those prescribed by the CODEX ALIMENTARIUS labeling standard;
  • Develop a greater degree of co-ordination among the various departments and
  • ministries proposing labeling measures for alcoholic drinks, and
  • Properly comply with the notification and consultation obligations set out in the WTO agreement on Technical Barriers to Trade (TBT) when introducing new labeling changes in the future.
  • In particular that the ‘For Discount store sale only’ label is withdrawn, and that one retail label only, is used, that being the ‘Home Consumption’ label.
  • We also request that this wording is put on the back label of the product for both Domestic and Imported products to avoid consumer confusion.

    • It should be noted however, that this is a short-term compromise position, to simplify the label requirements. The liquor industries final wish being the eradication of the costly and ineffective channel labeling requirements at some time in the future.
  • Look alike and counterfeit imports
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    Clearly the Wine and Spirits Committee is not alone in having a problem with look alike and counterfeit imports and we recognize the efforts that the Korean Government, Customs etc., has made in neutralizing these negative practices, but we also believe that additional efforts and measures are necessary to cope with the not-improving situation in the Korean market.

    Currently the Korean authorities require the submission of only a certificate of origin when wine and spirit products are imported into Korea. However, under the current regulations, forged and fake documents for a certificate of origin can be easily accepted since the Korean authorities do not recognize nor specify the particular format of such certification except internationally accepted format. Unfortunately, there is no uniform format of certificate of origin that is internationally accepted. The format differs from country to country. Therefore, where persons present forged certificates of origin for the purposes of importing spurious wine and spirits, they would not face any difficulty with the Korean authorities.

    We believe that, if the Korean authorities tighten up the regulation on the acceptable format of a certificate of origin, the issue of

    look-alike and counterfeit wine and spirit imports can be more effectively addressed.

    For instance, as regards imports of Scotch Whisky, it would be appropriate for the Korean authorities to require all consignments to be accompanied by a security printed HM CUSTOMS and EXCISE “CERTIFICATE FOR SCOTCH WHISKY EXPORTED TO KOREA”.

    This certificate would not only provide Korean consumers with protection from counterfeit and other fraudulent practices, but it would also provide the Korean authorities with a British Government guarantee that the Scotch whisky to which it relates meets the very high production standards in its country of origin, that is, the UK, as required by UK and European Union legislation.

    Similar arrangements could be applied to Cognac from France, and all other appellation wine and spirit products from European Union countries.
  • Import Duties.
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    We continue to maintain that Korean Import duty rates are higher in comparison to those applied by other industrialized countries, and particularly those at a similar level of economic development to Korea e.g. Chile (7%), China (10% in 2005), Singapore (Zero), and Taiwan (Zero).
    Most spirit drink manufacturing associations such as the SWA, CEPS, DISCUS are seeking tariff elimination for all imported spirits in Korea in the Doha Round of multilateral trade negotiations. As a major spirits producing country, Korea would also stand to derive significant benefits from tariff elimination in world markets.

    We therefore request the Korean Government to join the EU, US, Japan and others in eliminating its tariffs on spirit drinks.

  • Elimination of limit on Entertainment expense of Won 500,000
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    Clearly the ‘Entertainment’ limitation has had a devastating impact on consumption in restaurants and bars, and this in turn has had a multiple impact on service providers, and small sized businesses catering to the industry.

    Please see Taxation Committee