Distiller caught up in imbroglio over Korean vodka

SHOJU SNAFU

March 18, 1992|By Kim Clark | Kim Clark,Staff Writer

Montebello Brands Inc. had bottled plenty of strange and wonderful liquors at its Baltimore plants before, but none seemed stranger or more financially wonderful than "shoju," a kind of watered-down vodka that Koreans were guzzling the way Americans gulp beer.

But early this month, the Korean government closed the tap on the Baltimore-bottled shoju when Korean police arrested Montebello's importers for, among other things, selling "sham shoju."

Now Montebello finds itself in the middle of an international imbroglio.

The jailed importers aren't employees of Montebello, and no one has suggested Montebello did anything wrong. But Montebello President Alfred Bernstein is trying to help solve the problems and win back what appeared to be a terrific market.

Montebello had sold half a million bottles of its Sam Hack brand shoju since November to a New York-based importer, which has offices near Seoul, he said.

The approximately $200,000 order was only a small part of Montebello's thriving kosher vodka and (alcoholic) iced tea business. Montebello sells about $25 million worth of niche liquor products a year, he said.

But, he said, he thought "we were on to something really big."

Mr. Bernstein is puzzled by allegations that his shoju isn't legitimate. It is an unflavored mix of about 25 percent grain alcohol and 75 percent water, he said. While Korean-made shoju is distilled from local crops, it ends up being the same thing, he said.

Officials at the Korean Embassy in Washington wouldn't comment on the case, but reporters at Korea-based newspapers said that, even if Montebello clears its name, the shoju import business might still be in trouble.

The Korean importers were also charged with trying to evade about $200,000 worth of Korean taxes on the imported shoju and attempting to bribe government officials with payments of between $4,000 and $8,000, according to reports in the Korea News.

The owner of the importer, a Korean emigre, John Chung, insists that the arrests of his Korean employees are politically motivated.

Shoju is a $2.5 billion-a-year business in Korea, and Mr. Chung said he suspects the Korean distillers didn't want any American competition. The arrests, he said, smacked of "anti-Americanism."

In a telephone interview, Mr. Chung said the "Sam Hack Shoju" he bought from Montebello was superior to the shojus made in Korea. He priced Sam Hack at about $3 a bottle, more than twice the cost of most domestic Korean brands.

Mr. Chung said he has all the paperwork needed to show that his taxes and import duties were paid.

The bribery charges might stem from a simple misunderstanding, he said. It is customary in Korea to wine and dine government officials to thank them for assistance and it might have been misinterpreted, he said.

Song Chul Kim, a teacher of Korean at the University of Washington at Seattle, said he wasn't familiar with the case, but said "it is accepted as polite manners to bring token gifts to facilitators." But if the gift is very large, then it is recognized as a bribe, he said.

Mr. Kim said the Sam Hack brand is famous in Korea and that shoju is a favorite drink to accompany Korean barbecue. But, he said, Koreans feel sentimental and protectionist about certain local industries. He didn't know if it extended to shoju.

"We do have feelings about American rice and cigarettes," he said, explaining "these products are the major income source for the poor Korean peasant."

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