"Pesticide Barrel Apple Juice" Baek Jong-won Risk... Sales Drop Up to 45%

[Financial News]  The repeated 'Baek Jong-won Risk' has directly hit the sales of The Born Korea's franchises. Sales of major brand franchises such as Hong Kong Banjeom and Saemaeul Sikdang have decreased by nearly 20% in two months. 

On the 25th, according to the sales data of four card companies (Samsung, Shinhan, Hyundai, KB) submitted by the Financial Supervisory Service to Cha Gyu-geun, a member of the Democratic Innovation Party, the sales of major brand franchises of The Born Korea have sharply declined since February. The daily average sales of Hong Kong Banjeom franchises decreased by 18.5% from 74.53 million won in February to 60.72 million won last month.

During the same period, Saemaeul Sikdang's sales decreased by 17.6% from 99.45 million won to 81.90 million won. Additionally, Paik's Coffee saw its daily average sales increase by 11.76% in March compared to the previous month, but the growth rate plummeted to 1.86% last month.

Various controversies and scandals are analyzed as the cause of the sales decline. The sales drop became noticeably larger after the controversy over 'spraying apple juice with a pesticide barrel' arose on March 16. In particular, comparing franchise sales on March 15, the day before the controversy, and on the 5th of last month, three weeks later, Saemaeul Sikdang decreased by 45.3%, Paik's Coffee by 28.1%, and Hong Kong Banjeom by 26.0%.

Previously, The Born Korea has been embroiled in continuous controversies starting with the expensive price issue of 'Paik Ham'. Basic hygiene and safety issues such as false labeling of origin and content, cooking with rusty engine oil drums, and using unauthorized cooking equipment have erupted one after another. Currently, there are a total of 14 cases related to CEO Baek and The Born Korea under police investigation.

Meanwhile, among The Born Korea's 25 dining franchises, 10 had more closures than new openings. Four brands had no new openings at all. 

Investor damage is also severe. According to NH Investment & Securities, 99.5% of the 16,640 people holding The Born Korea stocks are experiencing losses. The average loss rate is 25.38%, which means about a quarter of the investment has evaporated. The Born Korea was listed on the KOSPI on November 6 last year, surging to 64,500 won during the day on the first day, but has continuously declined and is now hovering in the 20,000 won range.


hsg@fnnews.com Han Seung-gon reporter