SEOUL, July 5 (Korea Bizwire) — Japanese consumer goods producers in South Korea saw their operating profits plunge by more than 70 percent on-year in 2019, data showed Sunday, due to the prolonged trade dispute between the two neighbors that led to a boycott against Japanese products here.
The combined operating profit of 31 Japanese companies surveyed dropped 71.3 percent in 2019 compared with the previous year, while their sales also decreased by 6.9 percent, according to the data compiled by industry tracker CEO Score.
Seoul and Tokyo have been at loggerheads since July 2019 after Japan abruptly rolled out restrictions on exports of key industrial materials to South Korea, which are crucial in the production of chips and displays.
Tokyo says South Korea did not effectively control sensitive items that could be used for military purposes, while Seoul considers its retaliation against a court’s decision that ordered a Japanese firm to compensate victims of forced labor during the 1910-45 colonial rule.
Amid the prolonged “boycott Japan” movement among South Korean consumers, Japanese foodstuffs producers saw their sales decrease nearly 20 percent over the period here while turning to net losses, the industry tracker said.
Lotte Asahi Liquor Co., which distributes Japanese beer here, saw its sales halve to 62.4 billion won (US$52 million) in 2019, while posting an operating loss of 30.8 billion won.
South Korea used to be the biggest overseas destination for Japanese beer before the trade row.
Japanese fashion retailer Uniqlo also saw its sales in South Korea dip 31.3 percent over the period to reach 443.9 billion won while posting an operating loss of 240 billion won, the data showed.
Japanese cosmetic makers and retailers also saw their sales drop 7.3 percent and 3.4 percent, respectively, on-year in 2019 from their South Korean branches.
The trade row has been causing more damage to Tokyo’s exports than the other way around. South Korea’s exports to Japan slipped 6.9 percent to US$28 billion in 2019 from a year earlier.
Its imports from Japan fell at a wider margin of 12.9 percent to $47 billion.