Namyang Dairy Products Faces Suspension Risk... Fallout Hits Dairy Farmers and Distributors

[Asia Economy Reporter Seungjin Lee] Namyang Dairy Products is facing strong backlash after announcing that its fermented milk product 'Bulgari' has an effect in suppressing COVID-19. With a two-month suspension of operations at its Sejong factory, which accounts for about 40% of the product output, it is expected that dairy farms supplying milk to Namyang Dairy Products and dealerships selling its products will also be affected.

According to the industry on the 24th, Sejong City gave prior notice on the 16th that it would impose a two-month suspension of operations on Namyang Dairy Products' Sejong factory for violating the Food Labeling and Advertising Act. The city plans to finalize the disposition after reviewing opinions from Namyang Dairy Products by May 3.

A boycott movement against Namyang Dairy Products is also continuing. Criticism has been raised that the company exploited the urgency of COVID-19 for marketing purposes, and online, voices are calling for a boycott by sharing lists of Namyang Dairy Products' items, including representative products such as Bulgari. Some parents are also insisting that Namyang Dairy Products' items provided in school meals should be replaced.

With the announcement of the two-month suspension and the ongoing boycott, the fallout has spread to dairy farms supplying milk to Namyang Dairy Products and dealerships. The Sejong factory is a large-scale facility responsible for 38% of the total products. If the Sejong factory stops operations, about 230 tons of milk per day will have nowhere to go and become unmanageable, affecting at least 200 farms.

About 1,000 dealership owners are anxious that the damage from the 'gapjil incident' eight years ago might be repeated. In February, dealership owners lamented in a Blue House petition that "the company is now trying to coexist, but the boycott of Namyang continues, and posts encouraging the boycott are being spread, causing sales damage and making life difficult," and the situation has now worsened.

Financial authorities are also conducting investigations. After the announcement regarding Bulgari's COVID-19 suppression effect, Namyang Dairy Products' stock price surged nearly 30%, and the Korea Exchange is examining whether there was an intention to manipulate the stock price. After the investigation, financial authorities will decide whether to file charges.

On the 13th, Namyang Dairy Products held a symposium titled ‘Development of Antiviral Foods in the COVID-19 Era’ at a conference hall in Seoul, announcing that "the Bulgari fermented milk product was confirmed domestically for the first time to have an antiviral effect against COVID-19." However, Namyang Dairy Products caused controversy by not disclosing any animal or clinical trial results related to this claim.

This content was produced with the assistance of AI translation services.