Oriental Brewery will stop operating the Cheongju plant for four weeks. The decision was made due to a plunge in sales and a rise in inventory amid the economic recession caused by the COVID-19.
Oriental Brewery said on April 3 that it will suspend production of its goods at its Cheongju plant for four weeks from April 6. This is not a method where entire factories are closed, but only production of goods is stopped while maintaining facility and shipment businesses.
Out of Oriental Brewery's production plants in Icheon, Cheongju and Gwangju, the Cheongju plant mainly produces Cass beer for entertainment and restaurant businesses.
"The sales of alcoholic beverages in the entertainment and dining industries plunged due to the influence of COVID-19 early this year," said an official of Oriental Brewery. "We have decided to stop production at the Cheongju plant to exhaust inventory for the businesses."
However, industry sources say that the fact that its rival Hite Jinro's Terra has significantly eroded its market share for businesses since last year is not unrelated to the decision to suspend production.
About 120-130 production workers, who account for about 40 percent of the total workforce at the Cheongju plant, will be placed on paid leave. Those on paid leave will receive only 70% of the average wage (wage plus bonus) during the period.
Oriental Brewery will maintain its production at its Icheon factory, which mainly produces Korean beer, and its Gwangju plant, which produces handmade and imported beer. "The sales of domestic beer supplied to retailers and others have not been affected much by COVID-19," said the official.
