This article was published on March 4, 2025, at 5:21 a.m. on the ChosunBiz RM Report site.
In connection with the incident in December last year involving cleaning water being mixed into Maeil Dairies' sterilized milk, an administrative action by the relevant local government, Gwangju Metropolitan City, is expected to be decided in March. Initially, the goal was to conclude whether to suspend operations of the Maeil Dairies Gwangju factory by the end of February, but it has been confirmed that Gwangju City Hall plans to carefully consider the level of administrative action since Maeil Dairies has actively provided an explanation regarding the incident.
On the 4th, a Gwangju City Hall official noted in a call with ChosunBiz, "We were scheduled to conclude the administrative action regarding the Maeil Dairies Gwangju factory by the end of February, but after Maeil Dairies submitted a letter of opinion, we decided to review it carefully," and added, "Since the Lunar New Year holiday was included during the review period in January, we did not set a tight timeframe."
A Maeil Dairies official said, "As the matter is still under review, we cannot discuss specific details, but we have submitted an opinion urging consideration of the impact on the local community and nearby dairy farmers if the Maeil Dairies Gwangju factory is to be suspended," adding, "We expect a conclusion regarding the level of administrative action to be reached by the second week of March at the latest."
Earlier in December last year, news emerged through an internet community that cleaning water had been mixed into Maeil Dairies' sterilized milk. Photos of milk with brown liquid were also shared. A post stated that an employee at Hyundai Motor's Namyang Research Center was hospitalized after vomiting blood from consuming 200㎖ of Maeil milk provided in a meal. A report has also been filed with the Ministry of Food and Drug Safety, and an on-site investigation is underway.
According to the investigation, it was confirmed that on September 19 last year at the Maeil Dairies Gwangju factory, while producing the product, the valve of the sterilizer was open for about one second, resulting in cleaning water (2.8% sodium hydroxide) being mixed into the product filling line. Sodium hydroxide is an ingredient used in cleaning agents for CIP (cleaning in place). It is reported that workers usually wear protective masks and goggles when handling sodium hydroxide.
The sterilizer should originally be separated from the filling line, but it was revealed that due to a worker's mistake during the internal cleaning process of the sterilizer, the valve opened, allowing cleaning water to enter the product.
The Ministry of Food and Drug Safety determined that the incident constitutes a violation of the Livestock Products Sanitation Control Act and requested administrative action from the relevant authority, Gwangju Metropolitan City. The incident may lead to a maximum operational suspension of one month. As administrative action has considerable discretion from the local government, there is also a possibility of reducing it to a penalty surcharge.
Immediately after the incident, the stock price of Maeil Dairies stagnated but began to decline gradually from January. On the 3rd, the price fell to 31,700 won during trading, marking a new low. Although the stock price has since rebounded, it is still about 5% lower compared to the period immediately after the incident. An industry insider said, "Maeil Dairies' management did not post an apology on their official website until three days after the incident," adding, "Their response to restore consumer trust has been inadequate."
Meanwhile, Kim Sun-hee, vice chairperson of Maeil Dairies, acquired 19,710 shares of Maeil Dairies stock on the 14th as a bonus for company stocks, amounting to a value of 656 million won.
An industry insider noted, "The consumer distrust regarding the products mixed with cleaning water and the overall difficulties faced by the dairy industry are acting in combination, resulting in a situation where the stock price has halved compared to three years ago," adding, "Last year there was the cleaning water incident, and the conclusion on administrative action has not been reached, which may lead shareholders to perceive Vice Chairperson Kim's bonus as excessive."