Lotte candy is target of China’s Thaad protest

Chinese customs agents recently blocked a shipment of Lotte candy from entering the country, the latest sign that the Chinese government is ratcheting up retaliatory measures against Korea for its decision to deploy a U.S. antimissile system in the region.

About 300 boxes, totaling 600 kilograms (1,300 pounds), of Lotte Confectionery’s yogurt-flavored candy from Korea were confiscated by Chinese quarantine officials in the northeastern city of Qingdao recently, industry sources said Thursday. The sources did not specify the date when it occurred.

The Chinese customs officials were said to have claimed the products contained additives prohibited under food safety regulations and ordered the shipment to be incinerated.

Sources in the retail industry believe this is part of China’s efforts to punish Lotte Group, Korea’s fifth-largest conglomerate, after it signed a contract this week to transfer a golf course in Seongju County, North Gyeongsang, to the Korean government. The land will be used to deploy the controversial antimissile system known as Terminal High Altitude Area Defense (Thaad), which the Chinese government says is obtrusive to its security.

Seoul and Washington agreed last July to deploy Thaad in South Korea and settled on the location, the Lotte Skyhill golf course in Seongju, at the end of September. In a board of directors meeting on Monday, Lotte reluctantly approved the deal, a decision it had delayed for over a month, ostensibly out of fear of Chinese retaliation.

Since November, Lotte Group has become a target of various inspections in China, including a tax audit on Lotte Group’s Shanghai headquarters, as well as stringent health and safety evaluations. Over 150 factories, storage facilities and stores of Lotte affiliates, including Lotte Confectionery, Lotte Chemical, Lotte Department Store and Lotte Mart, have faced some form of government inspection. In December, Chinese authorities also halted a 3 trillion won ($2.6 billion) construction project for Lotte World Town in the northeastern city of Shenyang.

Most recently, Lotte Group has faced a slew of e-commerce setbacks. On Tuesday, JD.com, China’s second-largest shopping site, decided to shut down a section dedicated to Lotte Mart products. That same day, a computer virus took down Lotte Group’s Chinese website. Then on Thursday, Lotte Duty Free’s site was down for about three hours starting at noon after a denial of service, or DDoS, attack that was traced to an IP address in China.

The Chinese government’s suspected retaliation has even touched K-pop, as Korean celebrities have been banned from appearing on Chinese broadcasts and Korean programming is no longer being updated on Chinese video streaming websites like PPTV and Youku.

Without overtly confirming Beijing’s boycotts on Lotte, Chinese Foreign Ministry spokesman Geng Shuang said in a press briefing on Tuesday that “the Chinese market and consumers will determine whether a foreign company is successful in China,” while describing Chinese people as being opposed to Thaad.

State-run Chinese media outlets have also been encouraging a boycott of Lotte and other Korean products.

On Thursday, the Korean Ministry of Foreign Affairs reiterated that Thaad deployment is a self-defense measure against North Korea’s nuclear and missile threats, and expressed worries about growing anti-Korean sentiment in China.

“We are concerned that some in China are calling to put our companies at a disadvantage,” Foreign Ministry spokesman Cho June-hyuck said during a press briefing Thursday.

Cho added that the Korean government is working closely with its consular offices in China and other related agencies to “come up with a multilateral plan so that our companies that have entered the Chinese market will receive fair treatment.”

Cho also noted that Seoul is “paying attention” to the Chinese Foreign Ministry’s statements that Beijing “welcomes foreign companies to make investments and do business in China” and “respects and protects the lawful rights and interests of foreign companies.”

BY KIM SARAH [kim.sarah@joongang.co.kr]