Vitasoy, a Hong Kong-based soy milk company, is under threat in its most important market, after Chinese consumers called for boycotts and accused the firm of being too supportive of the family of a former employee that stabbed a police officer in Hong Kong.
The consumer boycotts spawned from an incident last Thursday, in which a 50-year-old assailant stabbed a police officer in the Hong Kong shopping district of Causeway Bay. The man then stabbed himself and was subdued by police, videos of the incident show. The attacker later died in a nearby hospital. The police officer whom he stabbed is in stable condition.
Hong Kong authorities classified the episode as a “lone-wolf” attack, but it occurred on a tense day for the city. Thursday marked the one-year anniversary of Hong Kong’s new National Security Law, which Beijing imposed on the city to quash dissent following the 2019 protests. That day, Hong Kong police deployed thousands of officers across the city to enforce the government’s ban of a planned pro-democracy march.
Local media reported that the assailant used to work as a purchasing agent for Vitasoy, a popular soy milk brand sold in Hong Kong convenience stores and shops for decades, and that Vitasoy had expressed condolences to the man’s family in an internal memo to company employees. On Sunday, Vitasoy confirmed the existence of the email but denied responsibility for sending it.
The email “was written and forwarded by an employee in private who was neither authorized by the group nor followed the internal approval process,” Vitasoy said in a post on the Chinese social media platform Weibo. Vitasoy also said it maintained the right to pursue legal action against the employee for writing the email.
“[We] severely condemn violence and actions that harm the city’s social stability,” Vitasoy wrote. Vitasoy did not respond to Fortune’s request for comment.
Vitasoy’s explanation hasn’t quelled outrage among some Chinese consumers who now accuse the company of “protecting a terrorist.” The boycotters view anything less than unequivocal support for Hong Kong’s police force as an affront to the city’s government and Beijing, and see Vitasoy’s supposed support for the attacker’s family as tantamount to endorsing the man’s actions.
As of Monday, two Chinese actors Gong Jun and Ren Jialun had cut ties with Vitasoy.
“[Gong will] resolutely boycott all forms of violence and terrorist radical acts,” a representative for Gong said in a Weibo post on Sunday. “[We] insist on having zero tolerance towards any violence and behavior supporting violence.”
As a result, Vitasoy’s stock is taken a beating.
On Monday, Vitasoy shares on the Hong Kong Stock Exchange opened 15% below their closing price on Friday. The stock pared some of those losses on Monday, but remains down 11% for the day, a slide that cut Vitasoy’s market cap by $500 million to $3.6 billion on Monday.
Vitasoy was founded in 1940 by Dr. Lo Kwee-song, who started the company with door-to-door deliveries of soy milk in Hong Kong. In the 1970s and 1980s, Vitasoy began packaging and selling its core soy milk products in bulk quantities and expanded to markets like the U.S. and Canada.
Vitasoy says it sells its products in over 40 countries around the world, but Mainland China is the company’s largest market. In its 2020 financial report, Vitasoy said that Mainland China accounts for 62% of total sales. Hong Kong is its second-largest market, with 29% of sales; Australia and New Zealand account for 7% of sales combined.
Vitasoy is only the latest company to endure a boycott for crossing what Chinese consumers see as a red line.
For Vitasoy, it was the matter of Hong Kong police; for H&M, it was Xinjiang. In March, Chinese consumers targeted the Swedish fashion chain after Internet users dredged up a statement from the previous year in which the retailer had raised concerns about potential forced labor violations in China’s western region of Xinjiang, an accusation Beijing denies.
Major e-commerce platforms like the Alibaba-owned Tmall dropped H&M products from their online stores, and search engine Baidu scrubbed H&M stores from its online maps.
Amid the fallout, H&M replaced its initial statement with one that did not mention Xinjiang and pledged to “regain the trust and confidence” of consumers and partners in China. Even with H&M backtracking, the controversy was costly. From March to May, H&M’s sales in China dropped 28% to $189 million compared to 2020, the fashion retailer reported last week.
Still, other companies like shoe giant Nike that were engulfed in the recent consumer boycotts have emerged relatively unscathed.
In March, Chinese consumers also called for a Nike boycott and posted viral videos of burning Nike shoes after Internet users found a similar statement from Nike condemning forced labor abuses in Xinjiang. Nike did not take down its statement on Xinjiang, but it managed to maintain its China business. Last week, Nike reported that its sales grew 17% in China in the quarter from March to May compared to the previous year.
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