Growing Controversy Over Purmil Incident... Collective Backlash from Labor Unions and Dairy Farmers Continues

Controversy Over Purmil Business Closure Spreads
Dairy Farmers and Unions Hold Consecutive Protests in Front of Headquarters
Truck Drivers Join Collective Action
Distributors Busy Searching for Alternative Manufacturers

On the 26th, the Purmil labor union held a rally in front of the company's headquarters in Yeongdeungpo-gu, Seoul, protesting the company's unilateral business closure and dismissal notice. The photo shows the Purmil headquarters on that day. Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporters Song Seung-yoon and Jeon Jin-young] The controversy surrounding Purmil's business closure shows no signs of subsiding easily. Following dairy farmers and labor unions, collective backlash from freight drivers responsible for transporting Purmil products is also spreading comprehensively.

According to industry sources on the 27th, freight drivers who transported Purmil products are planning to hold a collective protest next week and are discussing the number of participants and methods. Protests in front of Purmil headquarters have been ongoing daily. The previous day, the Purmil labor union held a rally with about 100 participants. The union held a resolution meeting in front of Purmil headquarters in Yeongdeungpo-gu, Seoul, to prevent layoffs, holding signs with slogans such as "Layoffs are murder. Withdraw the layoffs" and urged, "Even now, please open a path for workers to survive through public sale procedures."

The Korean Federation of Chemical Workers' Unions also issued a statement on the same day, saying, "The company's notification of layoffs to all employees and the announcement of business closure instead of corporate liquidation raises suspicion that it is an attempt to avoid returning corporate tax benefits due to business losses and to pursue resale in the future," and "We repeatedly urge transparent disclosure of the causes and processes of the failed sale, withdrawal of the unilateral layoff policy, and negotiations to seek other alternatives such as resale."

One day earlier, on the 25th, farmers demanding the survival rights of dairy farmers held rallies. They have supplied raw milk to Purmil for over 40 years since 1979 but lost their supply destination overnight due to the business closure. Farmer representatives requested a meeting with Shin Dong-hwan, CEO of Purmil, but the meeting did not take place. They claim that after receiving a certified notice of termination of raw milk supply from Purmil, they requested a meeting with CEO Shin but received no response.

Union members of Purmil, opposing the business closure and layoff notice, held a rally on the 26th in front of the headquarters in Yeongdeungpo-gu, Seoul, urging the immediate withdrawal of the unilateral business closure and layoff notice and calling for the resumption of the sale process. Photo by Hyunmin Kim kimhyun81@

The repercussions of Purmil's business closure are growing. Approximately 360 Purmil employees who received layoff notices, 50 employees from partner companies, about 150 delivery drivers, and over 500 agency store owners and employees, as well as dairy farmers, totaling more than 1,000 people, are directly affected. Purmil announced on the 17th that it would end its business by the 30th of next month and sent emails notifying about the business closure and layoffs to about 400 employees. The reason cited was continuous deficits over several years, a sharp decline in sales due to the COVID-19 pandemic, and an inability to find a solution to overcome the accumulated losses. Previously, LG Household & Health Care attempted to acquire Purmil but ultimately failed.

Retailers that had supply contracts for private brand (PB) products with Purmil are also searching for alternative suppliers. Currently, Purmil manufactures 9 PB products for E-Mart and 5 for Homeplus, and they have yet to find replacements. E-Mart stated that there is no significant impact for now as they have other manufacturers besides Purmil. Homeplus also claims minimal sales impact but is focusing on finding alternatives. Additionally, CU entrusted Purmil with manufacturing 2 of the 4 'Heyroo Milk' products, E-Mart24 with 'Haru e One Cup Milk,' and GS Retail with 'Real Price' PB products, but they have not yet found substitute manufacturers. Group catering companies such as CJ Freshway, CJ Foodville, and Ourhome, which still have supply contracts, as well as the military, will need to find new suppliers after the business closure, raising concerns that some companies might initiate multiple lawsuits.

Purmil's website was inaccessible for a while after the business closure notice on the 17th but has since returned to normal. Purmil is a dairy processing specialist known for products such as 'Bifidus,' 'Milk with Black Beans,' and 'Banana Kick Milk.' It was spun off from Lotte Dairy under the Lotte Group in April 2007 and renamed Purmil in 2009. Since last year, the company has been solely operated by CEO Shin Dong-hwan, the second son of Chairman Shin.

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