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Business Insight

Top of the Hops

South Koreans like their beer, but many are no longer content with plain old lager. They crave flavor and character and unique brews produced by dedicated artisans. In short, they're hooked on craft beer.

These are good times for the discerning drinker in South Korea. At last count, 2,000 bars and restaurants in the country were serving craft beer -- up from just a handful two years ago.

There are bars that offer more than 40 kinds of beer, from fruity and sweet to nutty and bitter. South Koreans developed a taste for boutique beer while traveling overseas, and after returning home, they wanted more choice.

But the craft beer explosion couldn't have happened without a change to the law.

Until last year, only big brewers were permitted to sell beer off the production site. That restriction allowed just two makers to dominate the market.

But the government has now reduced the annual limit to 75 kiloliters, and this has made it possible for brewers to produce in small factories and distribute across the country.

Weizen House in Useong is one company that is taking advantage of the change in the rules. It built a new brewery in May to expand production.

With its new equipment, it can pump out eight times more beer. Sales have tripled, and Weizen House is ready to hire more workers.

"Orders are surging across the nation, especially in Seoul and surrounding areas," said company president Im Seong-bin. "More and more people are developing an affinity for unique beers."

The market is fizzing with opportunities. But with other small breweries planning to increase output, competition is heating up.

This fierce competition is pushing some brewers to develop new concepts. One company is betting everything on a plant that has deep roots in Korean culture.

Ginseng is a traditional herbal medicine. In the Punggi region, farmers have been growing it for 1,300 years.

DaeGyeong Brewery is making craft beer that includes extract from locally produced ginseng.

Before setting up his own brewery, the company's president, Moon Joon-ki, used to work for one of the beer giants. His goal was to make a unique Korean beer, and after almost ten years in development, it's finally within reach.

Moon is gearing up to start selling ginseng Punggi beer next year. But even before tapping the local market, his company is getting orders from China, Vietnam and other overseas distributors.

"If we make good products using ingredients grown in the area," says Moon, "we can contribute to the local economy."

The large brewers have started buying out craft beer makers, another sign of the market potential. The big question now is whether the small makers can keep pace with South Korean's thirst for unique beer.

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