Dongsuh Food accused of deceiving customers

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Dongsuh Food accused of deceiving customers

Namyang Dairy Products said yesterday it will file a complaint with either the Fair Trade Commission or the Korea Food & Drug Administration against Dongsuh Food, claiming that the firm falsely advertised its latest coffee mix product.

According to Namyang, No. 1 player Dongsuh advertised its Maxim White Gold product as being entirely free of sodium caseinate, an artificial chemical widely used by coffee mix makers. Dongsuh implied it had replaced this with fat-free milk.

When Dongsuh launched its product on the market in February, it promoted it with the following catchphrase: “All the fresh aroma and tasty flavor of coffee with fat-free milk.”

Citing a report of the product’s ingredients that Dongsuh submitted to Bupyeong District Office in Incheon in mid-January, Namyang said Dongsuh had deceived its customers because it wrote in the report that the mix contains 1.38 percent sodium caseinate. Dongsuh runs a manufacturing factory in the region.

Dongsuh countered that it never marketed the product as being free of the chemical. It is now considering filing a lawsuit against Namyang.

Controversy over the safety of sodium caseinate began in December 2010 when Namyang jumped into the market by rolling out its ready-to-drink French Cafe Latte as a coffee mix in the form of slim pouches of ground instant coffee with cream and sugar.

To differentiate itself from Dongsuh, Namyang promoted its product as including fat-free milk, unlike rival products that use chemical additives.

Namyang’s marketing tactics worked, and it managed to secure 17 percent of the coffee mix market share at local discount chain stores last November, claiming the No. 2 spot long held by Nestle, according to Nielson Korea.

Nielson Korea said instant coffee is the top-selling product in Korea’s coffee market, which was worth 1.4 trillion won ($1.3 billion) last year.

The domestic coffee mix market was a two-horse race between Dongsuh and Nestle until Namyang and other players jumped into the fray.

The Korea Food Safety Research Institute said on Tuesday that sodium caseinate poses no threat to people’s health.

By Kim Mi-ju [mijukim@joongang.co.kr]

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