Photo Vitasoy: VCG
An interim statement released by Hong Kong-based beverage company Vitasoy once again angered internet users for attributing declining profits to mainland Chinese consumers, but failed to give sufficient thought to its own misdeeds which sparked boycott calls.
According to a Vitasoy profit warning issued to the Hong Kong Stock Exchange on Friday, its operating profit for the six months ending September 30 is expected to be between a loss of HK $ 50 million (6.43 million dollars) and a profit of HK $ 60 million, down 91 to 107 percent from the same period last year. This decrease is mainly due to the sharp drop in market demand in the second quarter of fiscal year 2021/22.
The company went on to say that an internal memo containing inappropriate content had been circulated widely on social media, resulting in “knock-ons” from customers on the Chinese mainland. Therefore, during the month of July, Vitasoy drinks were pulled from the shelves by many retailers and traders in mainland China.
“As our products are gradually returning to the shelves of certain channels, the sales losses during the summer season are expected to have a significant impact on the group’s revenues and profits for the six months ending in September 2021,” the communicated.
Chinese netizens questioned the statement, saying it was worded so inappropriately that it failed to mention the company’s previous inappropriate remarks, serving to pass the buck to others.
Many Sina Weibo users have said they will continue to avoid Vitasoy products because the company apparently lacks sincerity towards mainland consumers.
“How to restore confidence and win back consumer favor is a big deal for Vitasoy,” one article read.
Vitasoy sparked a firm boycott of its liquid drinks in early July after an internal memo expressing condolences to the family of an employee who stabbed a police officer and then committed suicide circulated online. The note angered internet users who criticized the company for indirectly tolerating violence and terrorist acts. The perpetrator has been described by police as a “lone domestic terrorist”.
In the following statements, Vitasoy apologizes for the “incorrect wording” of the memo and states that the company supports Hong Kong’s long-term stability and strongly condemns the violence which undermines the city’s social stability, but this does not hasn’t done much to calm the anger online.
Since the incident, Vitasoy’s share price has continued to decline, closing at HK $ 21.45 per share on Friday, down about 30% from its July 2 level.
According to its latest financial results released on June 17, the revenue generated in the mainland market was HK $ 5.01 billion, representing 66.6% of its total revenue in fiscal year 2020/21, compared to 62. , 3% the previous year.