Chief Executive Officer Jung Ji-young of Hyundai Department Store apologized on the 21st at the National Assembly in Yeouido, Seoul, during a National Assembly inspection by the Health and Welfare Committee over the "pesticide oolong tea incident." Pesticide components were detected in Taiwanese oolong tea sold at cafes inside Hyundai Department Store from April to September last year. Hyundai Department Store was embroiled in controversy over lax food safety management.
The National Assembly Health and Welfare Committee selected Jung as a witness for the audit that day. This is the first time a Hyundai Department Store CEO has appeared in person at a National Assembly inspection.
Han Ji-a of the People Power Party said, "About 15,890 cups of oolong tea with dinotefuran exceeding the limit were sold at Hyundai Department Store. This means there was no monitoring at the department store for five months," and noted, "Because it was operated under a special purchase agreement, Hyundai Department Store is the de facto seller and responsible party, yet it received no sanctions."
She went on, "If the department store takes only revenue and only the tenant brands are sanctioned, isn't that an unfair contract?" and said, "Brands under special purchase at Hyundai Department Store account for about 60%, the highest among the three major department store companies."
Previously, from April to September last year, Hyundai Department Store prepared and sold illegally imported teas at drink stores located in its Trade Center branch and Jung-dong branch, among others. In some oolong teas, "dinotefuran," a type of insecticide, was detected above the allowable limit.
This store was operated under a special purchase contract in which the department store retained ownership of the products. Hyundai Department Store later released an apology on Feb. 14. Regarding this, Jung said, "It was excluded from the items we had been checking, so we failed to verify it."
Jung added, "Special purchase is a unique structure of Korean distribution," and explained, "The department store covers everything from interior work, rent, taxes, and water charges, allowing small businesses to open without capital. It is not a systemic problem overall, but one with pros and cons."
On the point that the notice was posted a few days after the incident, Jung said, "After seeing the news reports, there was a preparation period of about two days to arrange exchange and refunds."
Jung stressed, "We accepted applications for about 40 days through the application for exchange, refunds, and for all customers who experienced problems with the product. We had no intention whatsoever of evading responsibility."
Jung added, "We feel sorry that such an incident occurred at a department store that puts customers' trust first."
Meanwhile, questions were also raised that day about the background to Hyundai Department Store being designated as the industry's first "food safety zone." Hyundai Department Store received this certification from the Ministry of Food and Drug Safety in May after the oolong tea incident came to light in February. Regarding this, Jung said, "There was no (prior) communication with the ministry."