On Wednesday, South Korean law enforcement carried out a raid on the national headquarters of Starbucks Korea, the local operator of the global coffee giant confirmed to Agence France-Presse. The action comes in the wake of widespread public outrage over an ill-judged advertising campaign that stands accused of defaming pro-democracy activists killed in the 1980 Gwangju uprising.
The controversy erupted in May this year, when Starbucks Korea launched its ‘Tank Day’ promotion to coincide with the annual anniversary of the historic 1980 pro-democracy movement. The campaign centered on marketing a new line of extra-large tumblers, named to reference the large volume of coffee they could hold, timed to drop on May 18. For South Koreans, this date carries profound national meaning: it marks the day a military dictatorship deployed tanks to Gwangju to crush the popular pro-democracy uprising, a crackdown that left at least 165 civilian protesters dead. Those who lost their lives in the movement are widely revered as national martyrs across South Korea.
Critics quickly condemned the promotion for trivializing one of the most significant and traumatic events in modern South Korean history, and for insulting the memory of the fallen. A complaint was formally filed by a local civic group and family members of the Gwangju victims, who accuse senior leaders of Shinsegae Group — the South Korean conglomerate that holds the license to operate Starbucks Korea — of defamation and insult against the uprising’s victims and their surviving relatives.
“The Seoul police raided the headquarters of Starbucks Korea this morning as part of the ongoing investigation,” a spokesperson for Shinsegae Group told AFP, declining to share additional details on the search operation. Seoul police have only confirmed that the investigation into the company is ongoing, and have also declined to comment further on the specifics of the raid.
The formal complaint names two high-profile executives: Shinsegae Group chairman Chung Yong-jin, and Son Jung-hyun, the former CEO of Starbucks Korea who stepped down from his position in the immediate aftermath of the public furore. Further controversy also emerged when it was revealed that the campaign also used language that echoed phrases used by former authoritarian officials to dismiss claims that they had tortured a student activist to death during the uprising period.
South Korea is Starbucks’ third-largest market globally, trailing only the chain’s founding home the United States and China, making this controversy particularly high-stakes for the brand. Within weeks of the scandal breaking in May, Starbucks Korea issued a formal public apology, and took the extraordinary step of temporarily closing all more than 2,000 of its locations across the country for a one-time staff education event focused on the history of the Gwangju uprising in June.
Shinsegae Group previously conducted its own internal audit of the controversy, which found no evidence that the campaign was intentionally harmful. However, the conglomerate acknowledged that the internal probe faced significant limitations, most notably that the executive in charge of planning the ‘Tank Day’ promotion refused to hand over their mobile phone for investigation.
According to reports from South Korea’s Yonhap News Agency and national public broadcaster KBS, Wednesday’s police raid is aimed at gathering evidence that was not turned over or uncovered during the company’s internal investigation. The fallout from the controversy has already hit Starbucks Korea’s bottom line: Shinsegae confirmed that the chain saw a ‘sharp decline in sales’ in the first weeks after the scandal broke, and data from local platform provider IGAWorks shows that combined credit and debit card payment volume at Starbucks locations fell 17 percent between May and June.