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| Pernod Ricard Korea CEO Jean Touboul |
Pernod Ricard Korea (PRK) is facing investigations from three government agencies ― the Fair Trade Commission (FTC), the Ministry of Food and Drug Safety and the Ministry of Employment and Labor ― for offering bribes, violating a business suspension order and abusing employees.
Amid its deteriorating profitability in recent years, the Korean unit of the French distiller said Tuesday it has been waiting anxiously for decisions by the authorities on each allegation.
The FTC has been investigating PRK since earlier this year on an allegation of bribing dozens of wholesalers nationwide to ask them to sell PRK's whiskies, instead of its rivals.
In January, five officials from the antitrust watchdog reportedly raided the PRK headquarters in Seoul.
The Fair Trade Act prohibits companies from unfairly luring or forcing their rivals' clients to trade with them. The National Tax Service also bans distillers from bribing their clients with regard to liquor supply.
In addition to the FTC probe, PRK has been investigated by the food and drug safety ministry for doing business during its three-day business suspension in March, after the company sold a bottle of Imperial 12 Year Old whisky containing a glass fragment measuring 8 millimeters in diameter.
The distiller was found to have submitted an import declaration via its distribution agency at that time.
The violation can lead to a revocation of its business license, according to the law.
If the health authorities revoke the license, PRK will have to wait six months to reapply for its business license, so the revocation will deal a severe blow to the French distiller's operation in Korea.
Some industry officials expect the ministry will impose a fine on PRK, rather than revoking its license.
Against this backdrop, a lingering conflict between management and labor weighs on PRK as well.
The labor ministry has reportedly been investigating an executive of PRK, who is alleged to have verbally abused and sexually harassed his subordinates. The company also failed to reach an agreement with the labor union in the wage bargaining.
"As a company doing business in Korea, we regularly communicate with government authorities and agencies to abide by Korean laws and regulations," a PRK official said. "We are fully cooperating with any government authorities we communicate with as usual."
According to industry officials, some PRK employees regard CEO Jean Touboul's leadership as the reason for the series of unfavorable issues.
They were reportedly not aware of the food safety ministry's investigation before the media report.
However, Touboul and other executives have been criticized for going on month-long vacations, despite the unfavorable factors.
