Purmil Labor and Management Hold 2nd Negotiation Today... Discussion on Layoff Issues Planned

Purmil Management and Union 2nd Negotiation on 31st
Management to Accept Voluntary Retirement Applications Until 9th Next Month

[Asia Economy Reporter Song Seung-yoon] Regarding the business closure situation of Purmil, the company and the labor union will hold a second negotiation on the 31st to discuss solutions.

The Purmil management and the union will conduct the second negotiation from 2 p.m. at the headquarters in Yeongdeungpo-gu, Seoul. Discussions are expected to focus on the business closure issue and the policy on layoffs. Previously, the labor and management held the first negotiation on the 24th. It was the first meeting between labor and management after the business closure was announced, attended by Shin Dong-hwan, CEO of Purmil, and Kim Seong-hwan, chairman of the labor union, and lasted about two and a half hours. The parties agreed not to disclose the specific details discussed that day. However, the union only stated, "We proceeded with discussions in a direction that allows coexistence, and the management also agreed to make sincere efforts."

Earlier, the management caused controversy by suddenly deciding to accept voluntary retirement applications while negotiating with the union. CEO Shin announced on the 28th a recruitment notice for voluntary retirement applicants and stated that applications would be accepted from all general and technical staff until the 9th of next month. The conditions included severance pay equivalent to two months’ wages combining ordinary wages and bonuses, retirement pay, and annual leave allowances.

The impact of Purmil’s business closure is growing. Purmil decided to end its business on the 30th of next month and sent emails on the 17th of this month to about 400 employees notifying them of the business closure and layoffs. The reason given was that despite continuous deficits over several years, sales sharply declined due to the COVID-19 pandemic and other factors, and the accumulated deficit grew without finding a way to overcome it. Previously, LG Household & Health Care attempted to acquire Purmil but eventually abandoned the plan. Retailers that had contracts to supply Purmil’s private brand (PB) products are also looking for alternative suppliers. Approximately 360 Purmil employees who received layoff notices, about 50 employees of partner companies, around 150 delivery drivers, and more than 500 agency store owners and employees, as well as over 1,000 people including dairy farmers, will be directly affected.

Earlier, on the 26th, the union held a rally in front of Purmil’s headquarters protesting the business closure and layoff notices, demanding "the immediate withdrawal of the unilateral business closure and layoff notices and the resumption of the sale process." The day before, farmers held a rally demanding the survival rights of dairy farmers.

Purmil is a dairy processing company famous for products such as 'Bifidus,' 'Milk containing black beans,' and 'Banana Kick Milk.' It was spun off from Lotte Dairy under the Lotte Group in April 2007 and changed its name to 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.