Hite-Jinro's Chamisul, left, and Lotte Chilsung's Cheoumcheoreom
By Yi Whan-woo
The prosecution has launched an investigation into the Hite-Jinro Group, the country's leading soju manufacturer, for allegedly spreading rumors about harmful effects of its rival firm's product.
Prosecutors raided the three sales outlets of the group in Seoul on Thursday to secure documents to verify allegations that the traditional liquor maker had tried to boost sales by circulating groundless content about Lotte Chilsung Beverage.
Investigators at the Seoul Central District Prosecutors' Office are tracing the sales records and sales regulations of each seller to obtain hard evidence.
The escalating competition between the two soju makers is likely to take a new twist following the raid.
The probe comes amid controversy over alleged negative health effects of the regenerated alkaline water that is used to manufacture Cheoumcheoreom, the flagship soju brand of Lotte Chilsung.
The company has differentiated its product compared to other soju brands that traditionally use natural water. It has emphasized the lower the acidity level of water, the better it will be for people's health.
The brand steadily remains the No. 2 best-selling soju product since entering the market in 2006. It accounts for about 15 percent of the market. Meanwhile, Hite-Jinro has been a front-runner with about a 45 percent market share.
The promotion strategy of Lotte Chilsung has been called into question as a cable channel in March aired a program that reported regenerated water as a base for soju can cause muscle pain and skin reactions.
Experts from industry and academics say it's unclear whether regenerated alkaline water is safe or harmful.
But the unfounded allegations against Cheoumcheoreom have spread both online and offline since then. Lotte Chilsung claim that the origin of the rumors stems from the three distribution outlets of Hite-Jinro.
"We found those groundless rumors consistently tracing back to the three outlets, one in Yongsan, and two in Seocho", said Yoon Soo-han, manager of liquor division of Lotte Chilsung. "Our sales activity has been seriously interrupted and its reputation marred".
The outlets attracted buyers to purchase their product while handing out pamphlets that cited the reports from the cable television program and detailed the negative health effects of drinking Cheoumcheoreom, according to Yoon.
"We're not sure whether the headquarters of Hite-Jinro Group is involved in this case, and that's what we're hoping prosecutors help us retrieve our reputation",
A public relations official at Hite-Jinro stressed its headquarters has nothing to do with the allegations.
"The debate over safety of regenerated alkaline water has existed since the introduction of the soju product in 2006, and the report from the cable channel was not really big news to us", said manager Choi Yong-woon.
"What we were most concerned with however, was the use of such unverified facts by our sales offices with ill intentions, so we even sent out notices in advance to refrain from such activities".
Choi said the company will wait and see the prosecution's decisions on this matter.
"As the No. 1 firm in the industry, we believe in fair trade and competition, and hope our innocence will be proven".
The prosecution said it will go over the safety of the regenerated alkaline water as a base of soju as a part of its investigation.
Source : www.koreatimes.co.kr/...
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