Korean brewery negotiates with Barcelo to come to the Dominican Republic

SANTO DOMINGO. President Danilo Medina received yesterday at the Presidential Palace a commission of South Korean and Dominican businessmen that will bring to the market the new Barcelo Beer.

The executives of the Hite Junro Co., Ltd and the Dominican businessmen Jose Miguel Barcelo and Gustavo Cruz Jerez, executives of one of the principle national rum producers, explained to Medina that they would take advantage of the good investment climate to join their capitals.

The Korean company is considered to be one of the principle producers of alcoholic beverages in South Korea. The President was presented with the first bottle of Barcelo Beer which will soon be in the Dominican market.

The national and Korean investors were taken into the President's offices by the Minister of Economy, Planning and Development, Juan Temistocles Montas.

Besides reporting on the sale of the beer, the purpose of the meeting was to tell Medina about the interest to install a factory in the country to produce this and other products and supply both the local market as well as other countries in the Caribbean and Central America. Although the principle executive of the Korean firm, In Jip Yan, did not want to reveal the amount of the investment, he said that it would be large and in dollars.

He explained that at the end of this year they will make the decision as to whether they will invest or not in the construction of the brewery, because the volume of the orders is rising.

He indicated that with the installation of the factory, they would contribute at least 500 direct jobs.

The competition

The beer industry in the Dominican Republic is composed of the Dominican National Brewery (CND), Ambev Dominicana and the Cerveceria Vegana (the La Vega Brewery). In April of 2012, Ambev Dominicana, a subsidiary of the Brazilian Ambev enterprise, acquired 51% of the CND shares for US$1.237 billion. Before this sale, the Dominican National Brewery (Cerveceria Nacional Dominicana), whose leading brands are Presidente and Bohemia, controlled the market with more than 93%.

Ambev is a private Brazilian company which was born of the fusion in July 1999 of Antartica and Brahma. They have their own operations in Guatemala, Pery, Ecuador, Nicaragua, El Salvador and the Dominican Republic. The Cerveceria Vegana is another important competitor with their leading brand of Quisqueya.

The beer market

The quarterly bulletins of the Central Bank between 2008 and 2012 reveal that beer production has decreased. In 2012, it fell by 4%, when the production was 470.3 million liters. In the meantime, exports of the product fell by 10% in 2010, grew by 45% in 2011 and then fell again by 18% during 2012. Besides beer, tobacco products and rum are heavily taxed by the selective consumer tax.