“SERIOUS FLAWS” EXPOSED
Starbucks Korea’s e-commerce team organised the campaign and received final approval from team leaders and executives, the official said.
The investigation had not been able to conclude whether there was intentional wrongdoing, but the incident exposed serious flaws in Starbucks Korea’s risk management framework, the company said.
The e-commerce team had been overly focused on sales amid a large volume of weekly promotional events, leading staff to approve the campaign without proper review or legal scrutiny, it said.
Starbucks global headquarters in the United States was aware of the gravity of the situation and had been receiving updates on the investigation and the company’s response, it added.
Shinsegae fired the head of Starbucks Korea last week after apologising over the campaign. Starbucks Global also apologised and said an investigation had begun.
Starbucks is the leading food and beverage chain in South Korea in terms of the estimated number of customers in the six months to February, according to data firm WISEAPP.
Shinsegae operates Starbucks Korea through SCK Company, which is 67.5 per cent owned by E-Mart and 32.5 per cent by Singapore’s sovereign wealth fund GIC, according to a company filing.
Chung’s apology “seemed sincere” and Shinsegae’s internal probe appeared to have been “wrapped up well”, a spokesperson for South Korea’s ruling Democratic Party was reported as saying by the Yonhap news agency. The spokesperson added the party would seek to ensure such campaigns did not happen again.