[Inside Chodong] No Consumers Left to Support Namyang Dairy Products

"Not only did they unjustly interfere with management, but they also refused to fulfill prior agreements and violated confidentiality clauses. I have decided that we cannot hand over Namyang Dairy Products, which has been carefully built over 57 years since my father's time, to such an immoral private equity fund that easily changes its words. I judged that this is the final responsibility of the major shareholder to the executives, shareholders, dealerships, dairy farmers, and customers." (Hong Won-sik, Chairman of Namyang Dairy Products)

"After the announcement of the main contract, Chairman Hong's side made requests such as price renegotiation, which were difficult to accept, calling them 'favors,' and after mid-August, suddenly presented unreasonable demands as 'preconditions' for closing the deal." (Han & Company)

The sale of Namyang Dairy Products, triggered by the so-called 'Bulgaris incident,' has ultimately returned to square one. As the claims from the party offering the company and the party intending to buy it clash fiercely, the responsibility for this incident will be judged in court, but the situation revealed so far appears quite unfavorable to Namyang Dairy Products.

Within the industry, there is more weight given to the speculation that Chairman Hong changed his mind after the sale contract. After the sale news, the real estate value held by Namyang Dairy Products alone exceeds 400 billion KRW, and the sale price of 310 billion KRW has been called an absurd 'fire sale.' The soaring stock price is also one reason. The stock price of Namyang Dairy Products, which had been below 400,000 KRW for years, surged to over 810,000 KRW at one point in May when the sale news was seen as good news. There are various rumors that Chairman Hong's side demanded unreasonable changes such as "guaranteeing the positions of his two sons," "trying to keep Baekmidang separate from the company sale," and "demanding a higher sale price," which Han & Company did not accept.

The problem lies in Chairman Hong's sudden change of words and evasive tactics at the time of contract execution, which damaged trust in the market and consumers. Chairman Hong, who wiped tears at a national press conference and announced that he would step down and not pass management rights to his children, still retains the chairman title. Moreover, his eldest and second sons, who were dismissed amid allegations of embezzling company funds, have been reinstated or promoted, raising suspicions that there was no sincerity in resignation or sale from the beginning.

Consumers, who had already turned their backs due to boycott campaigns over the past few years, are not particularly surprised. Online, criticism is rampant with comments such as "It was a show to calm public opinion from the start," "A company sale is not like a transaction on Danggeun Market that can be reversed so easily," and "The boycott will continue." Even in the stock market, expectations for Namyang Dairy Products are not high. Among individual investors, some say, "This farce is no less than the Bulgaris incident," and "It would be better to cut losses than wait for the sale."

The financial investment and legal sectors foresee a prolonged mudslinging lawsuit between Chairman Hong and Han & Company. The corporate image of Namyang Dairy Products, tarnished by unreasonable management behaviors such as pushing out dealerships, false slander controversies against competitors, and the founder's granddaughter's drug charges, seems unlikely to recover with this sale reversal added. Whether the owner ultimately keeps his position or sells the company, the aftermath is a responsibility that Chairman Hong and his family, as major shareholders, must bear. However, how to compensate the dairy farmers, dealership owners, and employees who have worked quietly and maintained relationships with Namyang Dairy Products for over half a century remains a question. Chairman Hong must sincerely reconsider what the final responsibility of a major shareholder is for the executives, shareholders, dealerships, dairy farmers, and customers.

/Consumer Economy Department Deputy Chief ikjo@

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