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The Aftermath of the Dumpling Scandal

Posted August. 06, 2004 22:52,   


The so-called “dumpling scandal” broke out exactly two months ago on June 6. Although some time has passed, the aftermath of the crisis still lingers with dumpling sales not showing signs of recovery and the dumpling manufacturers facing chronic financial difficulties.

In the middle of the event and the actual facts coming to light, it has been confirmed that the most regrettable victims are two famous dumpling producers that went bankrupt.

Doturak, a famous dumpling manufacturer that was branded as one of the companies that used substandard dumpling fillings, has persistently requested the Korean Food and Drug Administration (KFDA) for another investigation since mid-June and was found innocent of using garbage fillings in late June. However, during that period, over 125,000 boxes of dumplings or 1.5 billion won worth of merchandise was returned, worsening the financial situation of the company and finally resulted in the company’s bankruptcy when it dishonored a bill of 1.2 billion won on July 19.

A company official sighed, “We are still selling only five percent of what we used to sell before the dumpling scandal. And even that number was possible due to Pyongtaek City’s, where our 15,000-pyong factory is located, ‘Buy Hometown Dumpling Campaign’.”

Jinyoung Food, which had annual sales of 10 billion won, also went bankrupt on July 1 after failing to pay a 75 million won bill of debt. The company had constructed a 13 billion won factory to exclusively produce dumplings early this year in Paju, Gyeonggi, and had produced daily over 100 tons of dumplings. Nevertheless, with the dumpling scandal in full throttle, the company lost over 1.5 billion won including 500 million won worth of dumplings exported to the U.S. that were returned.

Chewyoungroo, which was also declared as using substandard ingredients by the KFDA, was also declared innocent the following day, but the damage was already done. A company official said, “For two months after the police announced the results of the investigation we stopped our processing line at the Paju factory, but we started producing dumplings again on August 5 because we thought the machines would have problems if they were not operated for a long time.”

Over 200 small businesses such as “Saeahchim” that were not even mentioned in the KFDA’s substandard dumpling manufacturers are also going through hardships. The president of Saeahchim, Kim Gwang-chul, said, “Due to the traits of the food business, it takes over a year to return to the original state. If the present situation continues, it is likely that an additional three or four big dumpling manufacturers will go bankrupt.”

Dumpling manufacturers have filed a suit against broadcasters and other media that extensively reported the dumpling scandal to the Press Arbitration Committee early last month, and are preparing a lawsuit against the National Police Agency and the KFDA. Even so, the manufacturers pleaded, “How will such measures actually help restore our businesses?”

Above all, the sales of dumplings are still weak. A worker at a department store in Gangbuk said, “The consumers still feel there is a problem. The total sales of dumplings are only 50 percent of last year’s, and the sales of companies on the list for using substandard fillings are merely 10 percent of last year’s.”

Accordingly, not only the companies that were harmed but also even normal citizens are complaining, “Someone, such as the National Police Agency, the KFDA, or the media, such be responsible for spreading the case to this point without even grasping the facts accurately.”

In particular, the police agency is likely to breed controversy regarding unreliable investigation because 14 – including Morningwell of CJ Group - of the 25 companies listed as having received ingredients from the substandard dumpling manufacturer Eutteum Food were later acquitted.