No End in Sight to Lotte Mart Closures in China

  • By Chae Sung-jin

    April 03, 2017 12:51

    There are no signs so far that Chinese authorities will lift closure orders for most Lotte Mart stores in the country, which were transparently imposed last month in retaliation for Korea's deployment of a Terminal High-Altitude Area Defense battery from the U.S.

    As of Sunday, 87 of 99 Lotte Marts in China were closed, 75 of them over ostensible health and safety violations and the rest voluntarily amid a boycott from customers. Another month of closures could result in W200 billion worth of losses for Lotte (US$1=W1,119).

    More than a dozen of the Lotte Marts have come to the end of their one-month suspension, but Chinese authorities have yet to notify them that they can reopen, which will require a fresh inspection.

    Police patrol around a Lotte Mart in Shenyang, China on March 3, 2017. /Yonhap

    One industry source in China said, "In principle they could just delay the new safety inspections indefinitely." Or inspectors could "find" fresh violations and impose another closure.

    Lotte Mart lost W100 billion in China last month after being picked out as the whipping boy after the company agreed to hand over land to the Korean government for the THAAD deployment.

    It may run into trouble paying its 13,000 Chinese staff. A Lotte spokesman said, "We need to pay full wages for the first month of closure, and while some salary cuts are possible later on, our policy is to ensure that they are minimal to protect our Chinese staff."

    Lotte last month announced W360 billion in emergency support funding for Lotte Mart in China.

    Korea's Ambassador to China, Kim Jang-soo, has written to several Chinese ministries urging them to end the closures, but there has been no response so far. 

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