Starbucks Korea's 'Tank Day' promotion, launched on May 18, has triggered widespread backlash, causing a sharp sales drop and raising financial risks for parent Shinsegae Group.
Starbucks Korea launched a promotion for its 503-milliliter 'Tank' tumbler on May 18 but suspended it within hours. The campaign drew sharp criticism because the words 'Tank' and 'Tak' evoked the 1980 Gwangju Uprising and the 1987 torture death of student activist Park Jong-chul.
Shinsegae Group Chairman Chung Yong-jin apologized at a May 27 news conference and said he and other executives would take responsibility. Starbucks Korea dismissed its CEO and opened an internal investigation. Koreans in the United States have also sent protest emails to the Seattle headquarters.
Sales fell sharply. According to MobileIndex, weekly payments from May 18 to 24 dropped 26.3 percent from the prior week to 23.69 billion won. The company will refund prepaid card balances totaling 428 billion won from June 1 to 14.
Shinsegae faces a potential 640 billion won loss if Starbucks Corp. exercises its call option. The Fair Trade Commission said it sees no grounds for an investigation unless intent to deceive is proven.
