Even the Last Lifeline of Ramen, Snacks, and Milk Withdraws... Suppliers Sever Ties with Homeplus

Nongshim and Seoul Dairy Suspend Deliveries After Termination of Rehabilitation Process
Continued Transactions Until Recently Under Prepayment Terms
Many Food Companies Withdrew Early Amid Deteriorating Cash Flow
Prospects for Restarting Rehabilitation Remain Slim Despite 2-Week Appeal Clause

On July 7, at a Homeplus store in the Seoul metropolitan area, the so-called "Mega Food Market" title, meant to highlight its food specialty, seemed almost meaningless. The shelves intended for fresh produce, frozen foods, ready-made (deli) items, and meat and seafood were mostly filled with Homeplus's own private brand (PB), Simple+ products. In the sparsely populated store, temporary displays selling apparel such as underwear and tracksuits at discounted prices were set up at intervals, and frying pans and household goods were shelved away from their usual sections. At the meat section, only a small quantity of beef and pork with discount stickers remained, while the deli section had virtually no food available.

Nongshim ramen, which was supplied until the corporate rehabilitation procedure was terminated, is displayed at a Homeplus store in the Seoul metropolitan area. Photo by Heungsun Kim

Five days after the Seoul Bankruptcy Court’s Fourth Division decided to terminate Homeplus’s corporate rehabilitation procedure on July 3, the atmosphere at the operating stores now resembles that of a business winding down. Some established brand food manufacturers continued to supply products to Homeplus until recently, but halted transactions following the court's decision. Notably, Nongshim ceased supplying ramen, snacks, and other products as of last weekend. At this store, among all the major food brands, only a significant amount of Nongshim's main ramen and snacks remained, but even these were just leftover inventory supplied before the decision to end the rehabilitation procedure; these products filled only half the shelves, with the rest replaced by empty boxes.

A Nongshim representative stated, "While we cannot disclose the specific terms, we continued supplying small quantities to Homeplus on the condition of immediate payment until recently," adding, "After the decision to terminate the rehabilitation procedure, we decided not to make any further deliveries." They continued, "For any future outstanding receivables, we plan to seek recovery in accordance with legal procedures."

In the dairy sector, Seoul Dairy Cooperative continued transactions with Homeplus until the decision to end the rehabilitation process. A spokesperson for Seoul Dairy said, "Due to the termination of Homeplus’s rehabilitation procedure, we have suspended deliveries since last weekend," adding, "We will monitor the situation and decide whether to resume deliveries in the future." They further stated, "We do hold rehabilitation claims against Homeplus, but it is difficult to disclose the specific amount."

Products previously supplied by established brand food companies until the decision to terminate corporate rehabilitation procedures are displayed on the frozen food shelves at a Homeplus store in the metropolitan area. Photo by Heungsun Kim

In addition to these manufacturers, frozen foods, processed products, and sauces from brands such as CJ CheilJedang, Sempio, Dongwon F&B, and Harim also remain on the shelves. However, this is understood to be leftover stock of previously delivered products with long shelf lives, unrelated to the termination of the rehabilitation procedure. An industry official explained, "Until now, within the limits of manageable receivables, food companies supplied products only for the items requested by Homeplus," and added, "As Homeplus’s cash flow rapidly deteriorated in May and June, most food companies suspended additional deliveries during that period." He continued, "Currently, large food companies have managed their outstanding receivables to reduce risks, but some small and medium-sized suppliers are understood to have accumulated considerable unpaid balances."

Previously, the Seoul Bankruptcy Court, in its decision to end the Homeplus rehabilitation process, included a condition that the company must secure urgent operating funds of around 200 billion won within 14 days, and that upon immediate appeal, the court may recognize this as a valid reason. However, as the gap between key shareholders and the largest creditors over operating fund support has not narrowed, and as food companies and other suppliers that had continued product supply have now completely suspended deliveries, finding a breakthrough has become even more difficult.

The harsh reality facing Homeplus is evident not just in the food section, but also in the home appliance department. At the Samsung Electronics appliance section in the Homeplus store, which until recently had been running a 'Thank You Festival,' only a notice advertising a discount on a previously 2.4 million won air conditioner to the 1.5 million won range remained, while most products had disappeared from the shelves. An industry official commented, "For high-priced appliances, manufacturers either shipped products to Homeplus after considering its payment ability, or operated by directly setting up shop-in-shop sales. The absence of these products on the shelves means that either all inventory has been sold out, or the lease contract has ended and the manufacturer has withdrawn from the store."

This content was produced with the assistance of AI translation services.