Lotte Chilsung’s domestic beer sales fell 29.5% after it exited Kloud and Krush draft beer.

Lotte Chilsung Beverage’s beer business in South Korea weakened sharply in the first half of 2026, with domestic beer sales falling by 7.8 billion won from a year earlier as the company completed its withdrawal from the draft beer business for Kloud and Krush.

Yonhap Infomax, citing Lotte Chilsung’s half-year report released Tuesday, said the company’s domestic beer sales dropped to 18.8 billion won in the January-to-June period from 26.6 billion won a year earlier. That was a 29.5% year-over-year decline. Second-quarter beer revenue was 9.7 billion won, down 30.8% from the same period last year.

The decline came during a period when Lotte Chilsung was winding down part of its beer operations rather than during a broad market collapse. The company decided in November last year to exit the draft beer business for Kloud and Krush, and it finished clearing related facilities during the first half of this year. That move appears to have weighed heavily on reported beer sales.

Analysts cited in the report said the broader liquor market in South Korea appears to have been much more stable than Lotte Chilsung’s beer figures suggest. Kwon Woo-jeong, an analyst at Kyobo Securities, estimated that overall market demand declined by only 1% to 2%. Based on that estimate, Lotte Chilsung’s 29.5% fall in first-half beer sales was roughly 27.5 to 28.5 percentage points worse than the broader market trend. That comparison is based on analyst estimates, not on an official industry statistic, and the company did not disclose liters sold, market share, or a breakdown between price, volume, and product mix.

The pressure on beer added to a broader pattern of slow growth in the company’s alcohol business. According to the half-year report, alcohol accounted for 20.0% of Lotte Chilsung’s consolidated sales in the first half. That share had reached 26% in 2023, then fell to 21.2% in 2024 and 20.0% in 2025. The latest figure suggests the business has remained stuck at about one-fifth of company revenue for three straight years after the earlier peak.

In absolute terms, the business has also lost momentum. Lotte Chilsung set a sales target of 770 billion won for its liquor division this year. That goal is below the 813.4 billion won the business generated in 2024. Full-year alcohol sales fell 7.5% to 752.7 billion won in 2025 from 813.4 billion won in 2024. In the first half of 2026, alcohol sales were 389.3 billion won. That was up 1.9% from the same period last year, but still 6.6% below the 417.0 billion won recorded in the first half of 2024.

Securities firms have kept their forecasts cautious. Kyobo Securities estimated Lotte Chilsung’s liquor sales this year at 757.7 billion won, only 0.7% above last year’s level. DS Investment & Securities forecast 771.1 billion won, while LS Securities projected 770.8 billion won. Forecasts for next year were also clustered around 800 billion won, still below the 813.4 billion won the business reached in 2024.

Kwon of Kyobo Securities said the overall liquor market remained slow because of changes in drinking habits and a rise in business closures. Jang Ji-hye, an analyst at DS Investment & Securities, also said market demand had fallen by about 1% to 2%, reinforcing the view that Lotte Chilsung’s beer decline was steeper than the broader market contraction.

By product, beer was the weakest category in the first half. Other alcohol segments showed modest growth over the same period. Soju sales rose to 179.4 billion won, up 2.2%. Sake sales reached 45.0 billion won, up 2.8%, and wine sales increased to 38.9 billion won, up 2.9%. Those gains were not enough to offset the scale of the drop in beer.

The first-half results also point to a continued shift in the structure of Lotte Chilsung’s alcohol portfolio. The company’s beer business has been under pressure for some time, and the exit from draft beer for Kloud and Krush removed part of its presence in that segment. At the same time, modest growth in soju, sake, and wine suggests that demand has not disappeared across the company’s liquor lineup, even as the overall business remains well below its earlier peak.

Because the filing did not provide shipment volumes, pricing data, or market-share details, it is not possible to say how much of the beer decline came from lower sales volume, product mix changes, pricing effects, or the shutdown of draft beer operations. Even so, the reported numbers show a clear loss of scale in beer during the first six months of the year and a liquor business that has yet to recover the share of company sales it held in 2023.

A Lotte Chilsung official said the company would continue to focus on strengthening core competitiveness, building global brands, and improving a profitability-centered business structure to support stable growth.