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South Korean police carried out a search and seizure operation at Starbucks Korea headquarters in Seoul on Wednesday as authorities pursue a criminal defamation case tied to the company’s ill-fated Tank Day promotion. The raid focused on gathering evidence related to the planning and approval of the campaign launched on May 18 according to multiple reports citing police actions. Civic groups and bereaved families had filed complaints alleging the marketing violated the Special Act on the May 18 Democratization Movement by insulting victims of the military crackdown. Police had earlier booked both the conglomerate chairman and the sacked chief executive as suspects in the matter a Shinsegae Group official confirmed in statements to reporters.
The promotion for oversized coffee tumblers dubbed Tank featured the slogan thwack it on the table which critics immediately linked to a 1987 police cover-up in the torture death of pro-democracy activist Park Jong-chul according to an assessment published by The Diplomat. Civic organizations argued that naming the event Tank Day on the Gwangju anniversary amounted to trivializing a painful chapter in the nation’s history. A Britannica overview of the uprising states that official government figures place the civilian death toll at nearly 200 although some contemporary estimates ranged significantly higher. Protesters gathered outside stores smashing promotional tumblers in displays captured by local media.
Shinsegae Group which operates Starbucks Korea through a joint venture in which its E-Mart subsidiary holds a 67.5 percent stake according to The Diplomat launched an internal review that determined the historical connections were overlooked rather than intentional. The company said in a statement that the planning team had not drawn links to past events while senior management failed to catch the oversight during approvals. Five employees involved in developing the campaign were removed and the firm pledged ethics training across its workforce as part of corrective measures.
Chairman Chung Yong-jin issued a public apology on May 26 during a televised news conference where he bowed three times and stated I take it very seriously the fact that many people felt deep pain and anger because of Starbucks Korea’s inappropriate marketing campaign. The global Starbucks corporation separately expressed deep sorrow in its own announcement and said it was reviewing training standards while confirming it held no equity in the Korean operations. Former CEO Son Jeong-hyun was dismissed immediately after the backlash erupted with the company emphasizing that any staff found to have acted deliberately would face full civil and criminal accountability.
The controversy delivered a sharp blow to sales with a Shinsegae official telling Reuters that the operator had seen a very significant drop following the outcry. Market data cited by The Guardian showed card payment volumes at Starbucks stores plunged 26 percent in one week while May payments fell 10 percent from the prior month and customers sought refunds on an estimated 400 billion won held in prepaid cards. The chain runs more than 2,100 outlets across South Korea making it the company’s third-largest global market by store count according to industry figures referenced in the report.
President Lee Jae-myung publicly condemned the campaign as low-class peddling that insulted victims and their struggle according to accounts carried by the BBC and other outlets. Government ministries including defence suspended partnerships with the chain while the episode became a talking point during local elections with parties trading criticisms. The Seoul Metropolitan Police Agency’s Serious Crime Investigation Unit consolidated complaints originating from both Seoul and Gwangju and continues to examine materials seized during the headquarters raid.
