Purmil Resale Again in Uncertainty... Union Proposes '30% Restructuring and Sale'

Purmil Labor-Management 3rd Negotiation Also Fails
Union Proposes Sale Condition with 30% Restructuring
If Management Rejects, Corporate Liquidation Expected

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@

[Asia Economy Reporter Song Seung-yoon] The possibility of reselling Purmil, a dairy company embroiled in controversy over business closure and layoff notices, has become increasingly uncertain. With the third round of labor-management negotiations breaking down, the union proposed selling the company on the condition of a 30% restructuring.

According to the Purmil union on the 5th, the labor and management held a third negotiation session for three hours yesterday afternoon at Purmil’s headquarters in Yeongdeungpo-gu, Seoul, but ultimately failed to reach a conclusion. It is reported that the meeting discussed the previously considered plan to resume the sale and restructuring measures.

Previously, during the second negotiation on the 31st of last month, CEO Shin Dong-hwan proposed selling the company on the condition of a 50% restructuring, which the union rejected. This time, the union countered with a proposal to sell the company on the condition of a 30% restructuring. The management is expected to respond next week on whether they will accept this proposal. If the management does not accept the union’s proposal, the company is likely to proceed with corporate liquidation rather than the initially announced business closure. In this case, all former Purmil employees will be offered voluntary retirement. The management proposed a fourth negotiation on the 14th, but the union refused, stating that further negotiations would be meaningless.

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 Hyunmin Kim kimhyun81@

Earlier, on the 28th of last month, Purmil’s management announced the recruitment of voluntary retirement applicants, stating that they would accept applications from all general and technical staff until the 9th of this month. The conditions included severance pay equivalent to two months’ wages combining regular pay and bonuses, retirement pay, and annual leave allowances. During the second negotiation, both labor and management agreed to extend the voluntary retirement application deadline to the business closure date of the 30th of this month. Although the agreement seemed to progress as both sides consented to proceed with the sale process during the second negotiation, the breakdown of the recent talks has cast doubt on the deal’s success. Moreover, after the second negotiation, it was revealed that Purmil’s management notified dealers and directly affiliated dairy farmers of the planned business closure as scheduled, further complicating the situation.

Purmil had previously decided to close its business on the 30th of this month and sent emails notifying about the business closure and layoffs to approximately 400 employees on the 17th of last month. This decision was due to continuous losses over several years, making it unsustainable. LG Household & Health Care had previously attempted to acquire Purmil but ultimately failed.

The aftermath of the Purmil incident is intensifying. Following dairy farmers and the union, truck drivers responsible for transporting Purmil products and dealers are also showing signs of collective resistance. A Purmil Dealers Association has been formed, mainly among dealers in the Gyeongnam region. Previously, dairy farmers and the union held rallies condemning the management in front of Purmil’s headquarters in Yeongdeungpo-gu, Seoul, for two days starting on the 25th of last month. Dealers and truck drivers are expected to begin collective action after hearing the company’s stance following negotiations. Distributors that had contracts to supply Purmil’s private brand (PB) products are also seeking alternative suppliers.

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