Distributor commits suicide citing pressure to sell

Only a week after the nation’s largest dairy maker Namyang Dairy Products was found to be abusing their power over small retailers and distributors, a distributor of the traditional liquor company Bae Sang-myun Brewery committed suicide Tuesday.

The distributor killed himself by burning charcoal briquettes in the warehouse of his retail store at around 2 p.m. Tuesday.

He claimed he was constantly being pressured by company headquarters to receive and sell an excessive amount of products, including those nearing expiration dates and even inducing debt to dispose of these stocks.

Earlier, Namyang Dairy Products was criticized for having strong-armed a distributor with foul-mouthed language to order more products and domineering small suppliers and retailers.

The 44-year-old distributor surnamed Lee said in his suicide note that the Namyang incident was only the tip of an iceberg and that he suffered from the headquarters’ constant pressure to sell off all the products and repay the debt.

“The liquor distribution branch business I started with the cash of 50 million won [$44,850] as a premium was a total mess,” Lee said in his note.

“It was a fraud acquiesced by the headquarters. I endlessly conducted sales promotions in order to survive, but the only thing that was left was the constant pressure from the headquarters.”

As the Namyang incident and the suicide of the Bae Sang-myun Brewery’s distributor revealed the unfair business practices, including forcing products on distributors and retailers, threatening the livelihoods of sales branches, demanding bribes and distributing products nearing their expiration dates, other retail corporations are also coming under fire for potentially having conducted such business practices.

“All the retail corporations do the same thing. The big businesses abusing their economic power were not publicized only because small retailers hadn’t been able to speak about them,” said a fellow branch retailer of Lee.

“When we cannot meet the sales goal, the headquarters threaten us to close the store. But many of us cannot give up our stores because of the premiums we have paid.”

The food and beverage industry as well as the liquor industry have yet again been put on notice about the situation.

Although the liquor industry says it is not easy to force more products on distributors as the liquor trade is only made through the payment system by the National Tax Service, many liquor companies tend to forcibly foist poor-selling liquor on distributors for the monthly shipment result at the end of every month, retailers say.

“As Bae Sang-myun Brewery produces traditional liquor with shorter expiration dates compared to soju and beer, there is a possibility it inflicted heavier pressure on the dealers than other liquor companies,” said an industry official.

Other food and beverage companies such as Nongshim, Binggrae, Lotte Chilsung Beverage, Haitai Beverage and Donga Otsuka, all of which have been embroiled in the controversy over similar malpractices, are strengthening communications with their subsidiary business partners.

Lee Geon-young, CEO of Binggrae, recently made a post on the company’s Web site emphasizing compliance with the fair trade law, saying the company will strongly punish improper business activities as a warning to others.

Meanwhile, the ruling Saenuri Party is set to revamp the nation’s fair trade law to prevent large companies from bullying their suppliers and punish the offending party through paying punitive damages to victims.

By Kim Jung-yoon [kjy@joongang.co.kr]