Shinsegae chair controversy deepens amid Starbucks ‘Tank Day’ backlash

Shinsegae Group Chairman Chung Yong-jin speaks to journalists at JFK International Airport in New York ahead of his trip to Washington, D.C., to join a presidential inauguration ceremony for Donald Trump, Jan. 18. Yonhap

The renewed scrutiny of Shinsegae Group Chairman Chung Yong-jin’s political views, following Starbucks Korea’s recent promotion controversy — which critics say referenced Korea’s pro-democracy movements of the 1980s in an inappropriate manner — is beginning to spill over into the group’s broader business portfolio beyond the coffee chain.

Chung’s long-running controversies are now raising concerns that the conglomerate’s ongoing development projects and its partnership with Starbucks headquarters in Seattle could come under pressure. The fiasco has also reignited questions over his leadership and management judgment.

His far-right views began drawing public backlash in 2021 and continued into the following year, when he repeatedly used the word “myeolgong” — meaning “eradicate communism” in Korean — in Facebook posts. He also uploaded posts condemning communism with the hashtag “myeolgong” and mocked reporters who questioned his social media activity by leaving sarcastic comments on their news articles online.

The provocative rhetoric sent shockwaves through the country’s retail industry, consumers and the broader public, fueling concerns that his unrestrained online behavior had exposed a worldview seen as being at odds with democratic values.

Beyond his keyboard warrior-like online activity, Chung in 2021 attended the musical “Park Chung Hee,” an event that attracted a number of far-right public figures. In 2023, he also sent a congratulatory video message to Build-Up Korea, another event associated with far-right political groups.

Amid mounting criticism and public polarization, Chung faced growing backlash over his use of social media and public appearances to openly express his personal beliefs without restraint, with critics arguing that such behavior was inappropriate for someone serving at the time as vice chairman of the conglomerate and carrying significant corporate and social influence.

A protestor in front of a Starbucks shop in Seoul's Gwanghwamun area condemns Starbucks Korea's "Tank Day" promotion and urges boycotting the brand, Thursday. Yonhap

The owner-related risk surrounding Chung has resurfaced following Starbucks Korea’s latest marketing blunder. Critics speculated that the fiasco — sparked by the company’s “Tank Day” tumbler discount promotion held Monday during the anniversary period of the May 18 Gwangju Uprising — would have been unlikely had it not been for the chairman's long-standing political controversies.

They warned that the backlash could spread across the wider business empire of Shinsegae Group, which spans shopping, retail distribution, e-commerce, restaurants, hotels, leisure, fashion and construction.

“Based on his past, this is more than a mere incident. This cannot be confined to a certain brand or product. I think the Starbucks controversy revealed how Shinsegae Group as a whole views Korean society,” said An Chong-ki, a professor at Korea University Institute for Research on Labor and Employment.

“Chung bears the greatest responsibility, not former Starbucks Korea CEO Sohn Jeong-hyeon, who was removed Monday following the controversy. How long the anti-Shinsegae sentiment continues will depend on whether Chung and the group move beyond superficial gestures and sincerely demonstrate their values to the public. In the United States, companies facing similar crises have responded by presenting concrete plans for social contribution and commitments to public values.”

The controversy centered on the wording used throughout the promotion by Starbucks Korea. The phrase “Tank Day,” used as the event’s title, drew backlash for evoking memories of the military vehicles deployed by Chun Doo-hwan, who would later become president, to suppress protesters during the 1980 Gwangju Uprising. At the time, citizens had risen up against Chun’s military regime, demanding an end to martial law and the establishment of democracy.

The promotion also included the phrase, “Put it on the table with a sound of ‘Tak!’” — wording critics said recalled the infamous explanation surrounding the 1987 torture death of student activist Park Jong-chul under Chun’s regime. The incident later became a major catalyst for Korea’s democracy movement.

Members of a civic group in Gwangju protest in front of Gwangju Shinsegae Department Store, Wednesday, condemning Starbucks Korea’s “Tank Day” promotion and its parent company, Shinsegae Group. Yonhap

The promotion event sparked a major backlash instantly, causing the company to shut it down just hours after its launch. Public protests developed to boycotting Starbucks, getting refunds for cash-value deposits and sharing online clips smashing the brand’s tumblers or cutting prepaid cards.

The company’s major blunder and Chung’s controversial stance have raised speculation over whether Starbucks’ global headquarters in Seattle will continue running the brand in Korea under Shinsegae. Emart, a retail group under Shinsegae, currently owns 67.5 percent of Starbucks Korea’s shares while the Government of Singapore Investment Corporation owns the rest.

Emart became the largest shareholder in 2021 under certain conditions. A call option agreement between Emart and Starbucks Global allows the U.S. coffee giant to repurchase Emart’s entire stake in Starbucks Korea if the licensing agreement is terminated or the contract is canceled for reasons attributable to Emart.

Under the agreement, if the termination is caused by reasons attributable to Emart, the U.S. firm can repurchase the shares at a 35 percent discount to the estimated fair value of the brand. In such a scenario, Emart would have to return shares worth about 1.8 trillion won ($1.2 billion) to Starbucks, with the discounted buyback potentially resulting in losses of around 600 billion won for Emart.

“We are taking this matter with the utmost seriousness,” Jaci Anderson, a spokesperson for U.S. Starbucks, told The Korea Times. “Leadership accountability actions have been taken, and a thorough investigation is underway. We are implementing stronger internal controls, review standards and companywide training to ensure this does not happen again.”

Interior Minister Yoon Ho-jung visits a community center in Seoul's Yeongdeungpo District where a government's high oil price relief fund was provided, Tuesday. Yonhap

Amid the escalating controversy, Interior Minister Yoon Ho-jung said Thursday that the government will no longer use products from Starbucks Korea in response to what he described as the company’s failure to respect the history of democracy and social values, effectively signaling a boycott in government-related activities.

"Democracy is built on the sacrifice and dedication of countless citizens,” Yoon said in a post on X, formerly Twitter, adding that any act that treats its history lightly or turns it into a commercial tool is not something that can be taken lightly.

He also expressed “deep regret over the anti-historical conduct.”

Yoon further noted that the Ministry of the Interior and Safety and other government agencies have been using coffee vouchers and mobile gift cards in public programs such as surveys, competitions and citizen participation initiatives, but said these practices will be reconsidered going forward.

Shinsegae's ongoing development projects in Gwangju are also emerging as a potential Achilles’ heel. The Gwangcheon Terminal complex redevelopment project linked to Gwangju Shinsegae Department Store and Shinsegae Property’s Grand Starfield Gwangju project — together worth about 4 trillion won in investment — may no longer be assured of a smooth path forward under the group’s current controversy, which has stirred strong backlash in a city widely regarded as a symbol of Korea’s democratic history.

Chung had already come under pressure in April after abruptly abandoning the group’s much-publicized artificial intelligence partnership with OpenAI just 11 days later in favor of Reflection AI. The move drew criticism over the group’s hasty decision-making process and what critics described as a lack of sufficient technological due diligence.