[Column] Leave with Applause

Namyang Dairy Products has long been a frequent target of consumer boycotts. Starting with the 2013 agency power abuse controversy, followed by the COVID-19 Bulgari incident, and even the drug scandal involving the founder’s granddaughter... Consumers have labeled this company as a ‘bad company’ and participated in boycotts in three main ways over the past decade: consumers who absolutely refuse to buy, those who buy only during special sales, and those who reluctantly purchase only irreplaceable products like Choco Emong.

However, a shift is being sensed in the ‘history of the Namyang Dairy Products boycott.’ At the end of last month, the company’s largest shareholder changed to the private equity firm Hahn & Company (Hahn & Co). Consumers are now asking in online communities whether it is okay to stop boycotting Namyang Dairy Products, and some have even posted verification that they visited Baekmidang, Namyang’s ice cream specialty store, for the first time in a while. This changing atmosphere can be seen as evidence that the underlying reason for the boycott was not the ‘company’ or the ‘products,’ but the ‘people.’

Due to the long-standing boycott, Namyang Dairy Products has recorded losses for 18 consecutive quarters. This contrasts with its competitor Maeil Dairies, which has achieved operating profits of 60 to 80 billion KRW annually despite the low birthrate crisis. Since its founding in 1964 by the late Honorary Chairman Hong Doo-young, Namyang Dairy Products had reigned as the absolute leader in the dairy industry, but its miserable current state can only be attributed to the failure of its largest shareholder to gain consumer trust.

Therefore, Hong Won-sik, the founder’s son and the one who brought about the current crisis, must make a decisive move. According to insiders, Chairman Hong continues to commute daily to the Gangnam headquarters even after handing over the largest shareholder status to Hahn & Co. Despite consumer pressure, he refuses to step down from his chairman position and is holding out by demanding an advisory role from Hahn & Co. In response, Hahn & Co is trying to break Chairman Hong’s stubbornness through various injunction applications, but if this continues, the normalization of Namyang Dairy Products’ management will only take its first step in April.

Due to accumulating operating losses and the prolonged management dispute, even mid-level executives who were loyal to the owner family are hoping for Chairman Hong’s resignation. It is already too late to say ‘leave while the applause lasts.’ Looking at the returning consumers, what Chairman Hong must decide is to retire gracefully with applause wishing for the company’s development. For the employees and agency owners of Namyang Dairy Products who have suffered being labeled a ‘bad company,’ he must finally drop his stubbornness.