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Shown above is Ben Verhaert, who took charge of Oriental Brewery (OB) in early 2020. Photo courtesy of OB

Walkout starts on June 28

Union members of Oriental Brewery (OB), the Korean affiliate of Anheuser-Busch (AB) InBev, plan to go on strike beginning on June 28 as wage negotiations fell apart.

The strike is strongly supported by OB workers _ a total of 1,404 out of its 1,474 union members took part in the vote, and 87.5 percent of them agreed with collective action.

The trade union asked for a wage increase of 7.5 percent. In response, the management offered 2 percent on top of a one-time bonus of 500,000 won ($440).

OB is Korea’s dominant brewery, which has ruled the market over the past few decades with its flagship OB beer.

AB InBev, the global brewery giant, spent $5.8 billion acquiring OB in 2014. Of note is that it sold the Korean company for $1.8 billion five years earlier.

In early 2019, there were rumors that AB InBev will shy away from OB, but the Leuven-based outfit sustained its commitment to OB.

Yet, the virus pandemic negatively affected the bottom lines of OB whose 2020 operating profit amounted to 409 billion won ($363 million), down 28 percent from a year before.

Against this backdrop, OB tried to reduce its payroll by conducting early retirement programs twice last year. The Seoul-based company carried out a similar program this year, too.

Of note is that OB struggled after incumbent CEO Ben Verhaert took the helm of the company on Jan. 1, 2020, according to the labor union.

“The 2-percent increase is guaranteed under our salary system. Hence, the company offers to freeze the wage and give us just 500,000 won,” an OB union member said.

“After three ERP programs since last year, the company threatens to shift our female employees in the back office to the sales department, which we regard as improper downsizing efforts.”

The union member noted that OB management is shifting the responsibility to employees.

“I admit that COVID-19 weighed on our business. But the management, including CEO Ben Verhaert, is at least partially responsible for the reduced profits last year,” he said. “However, the management tries to pass the buck to the workers. We are protesting this.”

When contacted, an OB official said that the company will continue efforts to persuade the union so as to minimize the damages posed to its customers and business partners.

“The coronavirus substantially chipped away at our sales and profits last year. But we attempted to make best offers to our employees,” an OB representative said.

Asked about the union’s claim that OB is set to shift female employees to the sales team, the OB official negated the accusation.

“We are now thinking of merging regional offices, with which some employees are not happy,” the official said.

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