Vitasoy sparks renewed public anger for blaming mainland consumers for profit loss, not reflecting upon own misdeeds
Published: Aug 07, 2021 07:31 PM
Vitasoy Photo: VCG

Vitasoy Photo: VCG

An interim forecast statement issued by Hong Kong-based beverage company Vitasoy once again sparked anger among netizens for attributing the decline of its profits to Chinese mainland consumers but not reflecting enough upon its own misdeeds that sparked calls for boycotts.

According to a profit warning Vitasoy published on the Hong Kong stock exchange on Friday, its operating profit in the six months ending on September 30 is expected to see between a loss of HK$50 million ($6.43 million) and a profit of HK$60 million, down 91 to 107 percent from the same period last year. The drop was mainly due to the sharp fall in market demand in the second quarter of the 2021/22 fiscal year.

The company went on to explain that an internal memo containing inappropriate contents was widely circulated among social media which resulted in "repercussions" from customers in the Chinese mainland. Therefore, during the month of July, Vitasoy's drink products were removed from shelves by many retailers and merchants in the Chinese mainland.

"While our products are gradually returning to the shelves in some channels, sales losses during the summer season are expected to have a significant impact on the group's revenue and earnings for the six months ending in September 2021," the statement said.

Chinese netizens questioned the statement, saying that it was phrased in such an improper way that it didn't mention the company's previous inappropriate remarks, serving to pass the buck to others.

Many Sina Weibo users said they would continue avoiding Vitasoy products as the company apparently lacks sincerity toward mainland consumers.

"How to restore trust and regain the favor of consumers is a big problem for Vitasoy," read one post.

Vitasoy triggered a strong boycott against its liquid beverages in early July after an internal memo expressing condolences to the family of an employee who stabbed a police officer and then killed himself got circulated online. The memo angered netizens who criticized the company for indirectly condoning violence and terrorist acts. The attacker has been described by the police as a "lone-wolf domestic terrorist."

In the following statements, Vitasoy apologize for the "improper wording" of the memo and said the company supports the long-term stability of Hong Kong and severely condemns violence that harms the city's social stability, but it did little to calm online anger.

Ever since the incident, the stock price of Vitasoy has continued to slide, closing at HK$21.45 per share on Friday, down about 30 percent from its level on July 2.

According to its latest financial results released on June 17, revenues generated in the mainland market stood at HK$5.01 billion, accounting for 66.6 percent of its total revenue in the 2020/21 fiscal year, up from 62.3 percent the previous fiscal year.

Global Times