Waste dumping sparks consumer uproar

Koren rose up in protest after conglomerate Doosan was found to be dumping toxic waste. Their outraged boycott hurt some of the country's major marketers.

CONSUMER BOYCOTT OF Products made by a Korean conglomerate at the centre of a major waste dumping scandal is a clear warning to potential marketers in Seoul that the environment is a major political issue now. The lesson for foreign companies hit by consumer reaction against the Doosan Group — one of the oldest of the Korean chaehols — is that any orchestrated campaign, either by the government or citizens’ watchdog groups, can have a disastrous effect on sales. The response for most companies in Korea has been to sit tight and hope the campaign will go away.

In the case of Doosan. the company admitted negligence straight away and immediately paid compensation. Several foreign companies with joint ventures with Doosan chose to do nothing to control damage. "We felt that it was best to adopt a low profile." says one executive involved in a joint venture with Doosan.

It was feared that the pollution issue could spark more anti-foreign sentiment in an already xenophobic country if any of the companies made a move to defend themselves. Cigarette manufacturers have long memories of the student movement urging Korean smokers to boycott foreign brands.

Most damage affected Koreans rather than foreign companies. One Doosan affiliate, Oriental Brewery. had about 30.000 cases of its beer withdrawn from supermarkets after protesters launched an effective prctest. according to market analysts.

The campaign began in March when Doosan Electro-Materials was found to have been dumping waste phenol in the Naktong River in such quantities that it contaminated the drinking supply to 15 million residents of Pusan city and Kyongsang province.

The Doosan Group makes beer and whisky and also has the franchise for Coca-Cola, Kodak Color Film and, in the Seoul area, for the fast-food marketers, Kentucky Fried Chicken which was relatively unscathed with only a small drop in revenues, said company officials. Oriental Brewery’s OB beer is the nation’s most popular beer and is now being referred to jokingly in bars as "Naktong River Dry".

After the dumping was discovered, 17 civic groups in Pusan, including the YMCA and local environmentalists, staged a rally which featured the emptying of bottles of OB down drains. In Kwangju, a noted opposition stronghold, anti-American activists said their main target would be Coca-Cola.

The incident caused a public furor and roused anger against the government for lack of controls, especially as the pollution was discovered only when citizens noticed a foul stench coming from their taps. The government countered by arresting Doosan officials and promising heavy sentences, even life imprisonment, for major polluters.

Riding on the wave of public indignation. representatives of the Federation of Supermarket Cooperative Associations, which comprises some 30,000 shops, announced that they would no longer stock Doosan products in order to "punish the immoral business tycoon".

Before the incident, OB’s market share for beer was 68 per cent with its only rival, Crown, taking 32 per cent. Daily production for OB was between 280,000 and 300,000 crates, while Crown produced between 120,000 and 140,000 crates. After the pollution issue errupted, the picture changed dramatically with OB’s share shrinking to 44 per cent and daily production dropping to between 200,000 and 220,000 crates. Crown stepped up production to between 250,000 and 260,000 crates a day, taking a 56 per cent share of the market. In the Kyongsang province region, OB sales were down 40 per cent.

Despite a second, allegedly accidental, spillage of phenol by the same Doosan company later in April, sales for OB appeared to be picking up. Market analysts said that the warmer summer weather, which encouraged more beer drinking, and Crown’s limited production capacity had helped OB recover.

But, the YMCA and consumer groups are still boycotting Doosan products. With the beer market forecast to open to foreign competition in the next year or two, analysts are predicting an end to OB’s domination of the market.

The campaign has been so successful because, when an appeal is made to Koreans’ national conscience. they rise as one and are capable of heroic sacrifices. And after the long years of dictatorship they respond well to emotional appeals from the government. Campaigns are mounted all the time, whether on civic mores, such as no spitting or littering, or attempts to curb the suicidal tendencies of Korean drivers.

Almost nonexistent as an issue in Korea up until four years ago, the environment is an area where Koreans now need no encouragement. Because of years of unlimited dumping of effluent into the nation’s main rivers and the unlimited and unrestricted pumping of chemical waste into the sky while the economic miracle was engineered, the environment is now an issue on which Koreans rally round the flag. Even politicians are beginning to address the country's environmental issues because they are a sure-fire vote winner. Bruce Cheesman