South Korea’s Kwangdong Pharmaceutical Co. and LG Household & Health Care Ltd. won the preliminary joint rights to sell the country’s bestselling mineral water brand Jeju Samdasoo outside the Jeju Island.

Jeju Province Development Co. (JPD) said on Thursday it named Kwangdong Pharmaceutical and LG Household & Health Care as the top bidders eligible to market Jeju Samdasoo bottle outside the island province.

After two days of reviewing from September 6 to 7, JPD decided to grant Kwangdong Pharmaceutical the rights to retail the water at online and offline grocery, convenient stores. The drug maker sold the water outside Jeju exclusively for the last four years. It now has to share the market with LG Household & Health Care that won the right to distribute the water elsewhere at non-retail stores like restaurants and hotels.

Once sealed in late September, the two will sell the volcanic bedrock water for four years.

The competition over the dominant mineral water brand drew five contenders including Kwangdong Pharmaceutical, LG Householder & Health Care, Crownhaitai Holdings Co. and Hyundai Green Food Co.

According to market research firm Nielsen Korea, the Korean bottled water market was estimated at 740 billion won ($656 million) in 2016, up 15.5 percent a year ago. The bottled water market, which had remained at around 300 billion won until 2010, expanded to 501.6 billion won in 2012. Jeju Samdasoo dominates over 40 percent of the market, while each other brands compete for a share below 10 percent.

Considering such high demand for bottled water in the country, the deal is unlikely to fall through, market experts anticipated. Kwangdong Pharmaceutical that has been selling Jeju Samdasoo to retail stores since 2012 after it successfully snatched away the sales rights from Nongshim is aggressive in renewing the contract with JDC, which sources water from Jeju Island.

In case they do not reach an agreement, the second preferred bidder receives the opportunity, according to sources.

As of 2:30 p.m. Friday, shares of Kwangdong were 0.35 percent down at 8,500 won, while shares of LG Household & Health Care were 2.16 percent down at 908,000 won.

By Lee Hee-soo

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]