It was confirmed on the 21st that Hyundai Department Store set up a so-called control tower overseeing food safety and hygiene following the "pesticide oolong tea" incident. This refers to the incident in Feb. in which illegally imported oolong tea was sold at some Hyundai Department Store locations and pesticide components exceeding the standard were detected.
According to the related industry, Hyundai Department Store recently created a food hygiene unit within the headquarters food business division through an organizational reshuffle to exclusively handle food safety and hygiene management. Until now, food hygiene labs at each branch had handled hygiene inspections, but this is the first time a higher-level unit at headquarters has been put in place to organically manage food safety.
A Hyundai Department Store official said, "We created a food hygiene unit to strengthen food hygiene and quality control," and added, "It will oversee Hyundai Department Store's food hygiene and safety management policies and serve as a control tower for each store and related departments."
The newly formed food hygiene unit will establish mid- to long-term food safety and hygiene policies and oversee related units such as the food business division, business sites, and hygiene labs. This measure shifts the existing branch-centered inspection system to a headquarters-led integrated structure.
The reason Hyundai Department Store reorganized is the incident in Feb. in which pesticide components exceeding the standard were detected at a cafe inside Hyundai Department Store. According to an investigation by the Ministry of Food and Drug Safety, drink stores at the Hyundai Department Store Trade Center and Jung-dong locations sold illegally imported tea for about five months from Apr. to Sep. last year, and the pesticide component dinotefuran was detected in oolong tea above the standard. The drink stores are said to have sold about 15,890 cups of tea and beverages during that period. Sales amounted to 80 million won.
Related questions also concentrated during this year's parliamentary audit. After the incident, product sales were halted and refunds were made, but criticism followed that the department store failed to properly vet the tenant brand. The parliamentary audit also pointed to the department store sector's unique special-purchase structure. Special purchase is not a consignment form in which the tenant brand sells directly, but a method in which the distributor purchases goods, holds inventory, and then sells them. Because the authority for product registration, pricing, and inventory management is concentrated with the distributor's buyer, it is difficult to view the tenant as solely responsible when a problem occurs.
Han Ji-a, a People Power Party lawmaker, said at the Health and Welfare Committee's parliamentary audit held at the National Assembly on Oct. 21, "Because it was operated as a special purchase, Hyundai Department Store is the de facto seller and responsible party, yet it received no sanctions," and added, "Hyundai Department Store's share of special-purchase brands averaged 64.7% over the past four years, the highest among the three major department store companies in Korea. If the department store takes only the revenue and only the tenant brands are sanctioned, isn't that an unfair contract?"
Chief Executive Officer Jeong Ji-young of Hyundai Department Store appeared as a witness at the audit and said, "We have absolutely no intention of evading responsibility," and noted, "We will do our best to prevent a recurrence." This is the first year that a Hyundai Department Store chief appeared at the audit over a food safety incident.
Hyundai Department Store's latest organizational overhaul is viewed as the first substantive response related to the oolong tea incident. However, some say that simply setting up a new unit is not enough. It is said there were no notable changes in existing core departments such as the executive in charge of food, the food MD, the quality control team, and the store sales management heads. An industry official said, "More fundamental measures need to be taken in parallel, such as strengthening pre-screening of tenant brands, making hygiene inspections routine, and immediately disclosing incidents when they occur."