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The Born Korea moves to liquidate subsidiary Food Incu… streamlining liquor business

[비즈한국] It has been confirmed that The Born Korea475560 is undergoing liquidation proceedings for its subsidiary, Food Incu. Food Incu is a wholesale liquor company 100% owned by The Born Korea. According to the corporate registry, Food Incu held an extraordinary general meeting of shareholders on October 21 and resolved to dissolve the company. Food Incu has appointed its current CEO as the liquidator.

The predecessor to Food Incu was Dongbang Distribution, a subsidiary established by The Born Korea in 2019. At the time, The Born Korea had another liquor business affiliate also named Food Incu, but that entity was merged into The Born Korea in 2023. Subsequently, Dongbang Distribution changed its name to Food Incu, leading to the current state.

Food Incu failed to demonstrate significant performance. According to business reports and other filings, it recorded 288.74 million won in revenue and a net loss of 60.18 million won in 2023, followed by 142.51 million won in revenue and a net loss of 329.45 million won in 2024. Considering that The Born Korea's total consolidated revenue last year was 464.2 billion won, Food Incu did not contribute meaningfully to the company's performance.

The Born Korea has been streamlining its liquor business throughout this year. A representative example is the brewery Paiksul-doga (formerly Yesan-doga). The Born Korea produced the makgeolli 'Paikgeolli' through Paiksul-doga. However, the company ceased operations of Paiksul-doga this year and transferred the Paikgeolli brand to a separate legal entity, 'Agricultural Corporation Paiksul-doga.' The Born Korea does not hold a stake in the agricultural corporation, and the Paikgeolli-related business is now operated independently. At the time of the shutdown, The Born Korea cited concerns from overseas investors and limits to profitability as reasons.

The Born Korea stated that the liquidation of Food Incu is also part of its effort to streamline the liquor business. A spokesperson for The Born Korea explained, "We decided to liquidate Food Incu as part of the process of organizing our liquor business this year."

In reality, the liquor business has never had a significant presence at The Born Korea. Of the 464.2 billion won in revenue last year, liquor products accounted for only 1.2 billion won, or about 0.27%. The company is also in a position where large-scale investment is difficult. Negative public sentiment toward The Born Korea CEO Paik Jong-won has emerged this year, and as a result, The Born Korea’s recent performance has been poor. The company’s revenue dropped 21.51% from 346.9 billion won in the first three quarters of last year to 272.3 billion won in the same period this year. Profitability is also poor, as evidenced by an operating loss of 20.6 billion won in the first three quarters of this year.

Instead of the liquor business, The Born Korea is focusing on new business areas such as sauces and consulting. However, it is difficult to guarantee a positive future as its core food and franchise businesses are not performing as they used to. Choi Sung-hwan, a researcher at Research Alum, commented on The Born Korea, saying, "The decline in brand trust has dampened consumer sentiment, accelerating sluggish sales across all channels including home shopping, online, and dining out." He added, "This has heightened concerns about decreasing revenue per franchise store and franchisee attrition. A vicious cycle is forming where increased marketing and promotional expenses aimed at preventing this lead to further deterioration in profitability."

Researcher Choi further added, "These structural risks are difficult to resolve through simple cost control or one-time subsidies. Unless consumer trust is fundamentally restored, there is a high possibility that the slowdown in growth will continue."