British alcoholic beverage producer Diageo’s unit Diageo Korea is reportedly planning to close its Korean whisky manufacturing facility amid low sales and challenging market conditions.

The facility in Icheon, Gyeonggi Province has been annually producing up to two million boxes of whisky. It is expected to shut down production in June next year.

The facility was established in 1981 and is involved in the bottling of Smirnoff vodka for the international markets. It also ships Windsor Scotch whisky to the Korean market.

Diageo Korea offers whisky brands including Johnny Walker, Windsor and J&B. The company also owns beer brands such as Guinness and Hop House 13.

The decision to shut down the facility is expected to impact 90 staff members, 29 of whom were hired by the company and others from affiliates.

Diageo reported an 11% fall in net sales in Korea in its fiscal 2019 results.

Many anticipate that other manufacturers could also follow, as many producers are reportedly facing financial difficulties.

Korean manufacturing has been operational for almost four decades, producing nearly two million boxes of whisky on an annual basis.

Last December, Diageo partnered with Delta Corporation to sell its sorghum beer business, United National Breweries (UNB), in South Africa.

Financial details of the deal are yet to be disclosed by either company.

UNB produces and offers a wide range of beers, including Chibuku, Tlokwe and Joburg.

Its other beer brands include zebra beer, shake shake, country brew and Kalahari sorghum.