Lotte Chilsung

Lotte Chilsung Beverage Co., Ltd. is a drink manufacturer in South Korea affiliated with Lotte Corporation. The company's name, Chilsung, signifies "Big Dipper" or seven stars, and its logo displays seven stars aligned in a row.[1]

History

Chilsung was founded in May 1950, then known as the Dongbang Beverage Company, and began with the launch of Chilsung Cider, a lemon-lime soft drink.[2]

In 1967, they became Hanmi Foods Industry Co., then changing to Chilsung Hanmi Foods Corporation in 1973, eventually becoming the Chilsung Beverage Company.[3] In 1975, the company acquired Busan Joint Beverage Corporation and signed a technology partnership agreement with PepsiCo in 1976.

In 1985, it was appointed the official beverage supplier for the 1986 Seoul Asian Games and 1988 Seoul Olympics, merged with Lotte Brewery in July 1986 and introduced CIP in December. In 1987, the Opo plant became the first in the industry to receive the KS mark.

By 2009, Chilsung products accounted for 36.7% of the Korean beverage market, compared to Coca Cola's 17.6%.[4] and rebranded it as Lotte Liquor BG and built a logistics centre in Gwangmyeong, Gyeonggi-do, and acquired PepsiCo Products Philippines Inc (PCPPI) in 2010 and merged with Lotte Liquor BG the following year.

As Lotte founder Shin Kyuk-ho's health was deteriorating, his sons vied for control of the conglomerate.[5] The fraternal feud hit a peak in 2015 when eldest son Dong-joo was removed from his position as Vice President of Lotte Holdings and his younger brother Shin Dong-bin assumed control.[6] News of the leadership struggle created doubts about Lotte's future, and Lotte Chilsung Beverage's market value dropped 6.85% in August.[7]

In 2016, amidst a police probe into embezzlement, Lotte Group companies lost a combined market value of in just four days, with Lotte Chilsung's shares falling by 3.93% in a single day.[8]

In February 2018, Chairman Shin Dong-bin was convicted on charges of bribery as part of the 2016 South Korean political scandal and sentenced to 2.5 years' incarceration.[9] After serving for 234 days, an appeals court released him from prison, and he went back to his duties as Chairman shortly after.[10] When news of his release broke, Lotte Group's market value was boosted by 4.2%.[11]

In 2018, Chilsung Beverage was fined by the Securities & Futures Commission of Financial Services for underreporting the losses of an affiliate. It was found that the drinks company masked net losses of, reporting them as just .[12]

Corporate governance

As of October 2023.

Products

Expansion abroad

In 1966, Lotte Chilsung began exporting its Chilsung Cider to Vietnam. In 1989, Lotte Chilsung acquired a JAS mark. In the late 1990s, the manufacturer grew to be the largest beverage company in Asia, holding 35% of the domestic market share. Lotte Chilsung continued to grow signing a contract with Gatorade in 2001.[20]

By the end of 2024, a Lotte spokesperson claimed overseas sales will make up more than 30% of Chilsung Beverage's total revenue.[21]

Use of celebrities

As a Korean brand, Lotte Chilsung has incorporated many famous Korean entertainers into their advertising.

Singer Lee Hyori represented their soju brand Chum-Churum between 2007 and 2012.[33] Then, a marketing campaign with the idol nicknamed the "nation's first love", Bae Suzy, ran from 2016 to 2018.[34] BLACKPINK's Jennie led the brand from 2021 to 2023, with actress Han So-hee becoming their latest representative.[35]

For one soju campaign with BLACKPINK's Jennie, Chum-Churum released a special promotional gift box which included Jennie photo cards, a Jennie mini cutout, a Jennie soju glass and a Soonhari Bluetooth microphone.[36]

In 2014, Korean BBQ restaurant owner, Ham Sun-bok, went viral for making 'so-maek', a cocktail of beer and soju. Lotte made her a brand representative for Chum-Churum, reportedly signing a contract for more than .[37]

In 2017, Chilsung Cider released an advertisement with actor Park Seo-joon and LABOUM singer Solbin.[38] In 2023, actor Jung Hae-in became the face of Chilsung Cider.[39]

In 2024, Lotte Chilsung Beverage's "Saero" is launching new animation content for their new product "Saero Apricot". Actors Park Ji-hoon and Kim Hye-yoon were selected as the endorsers and participated in dubbing the animation for the advertisement campaign.[40][41]

Antitrust violations

The Fair Trade Commission (FTC) fined Chilsung along with four other beverage producers for colluding to raise the prices of their products. The FTC reported that the companies co-ordinated price hikes four times between February 2008 and February 2009. Chilsung was fined .[42]

Just a few months later, Chilsung Beverage, in conjunction with three other companies, was found to have been forcing retailers to not lower the price of their products, receiving the largest fine of .[43]

In 2021, Lotte Chilsung was fined almost by the Korean Fair Trade Commission for violating antitrust regulations.[44]

See also

• List of South Korean corporations
• Lotte Corporation
• Lotte Confectionary
• Lotte Holdings
• Lotte Group

External links