[비즈한국] SPC Group Chairman Hur Young-in, who faces charges of directing unfair labor practices, has been released after five months in custody. With Chairman Hur released on bail, attention is focused on whether SPC's global business, which he has been spearheading, will regain momentum.
Character
SPC Group Chairman Hur Young-in was born in Hwanghae Province on May 17, 1945. He is the second son of the late Honorary Chairman Hur Chang-sung, the founder of SPC. After graduating from Seongnam High School in 1968, he entered the Department of Economics at Kyung Hee University and graduated in 1972. Deeply interested in baking techniques, Chairman Hur even studied abroad at the American Institute of Baking (AIB) in 1981. He is married to Lee Mi-hyang, the younger sister of the late Kolon Group Honorary Chairman Lee Dong-chan and the youngest aunt of current Kolon Group Honorary Chairman Lee Woong-yeol, and they have two sons.
His father, founder Hur Chang-sung, ran a bakery called 'Sangmidang' starting the year he was born. Thanks to this, 'bread' has always been a part of Chairman Hur's life. It is a famous anecdote that he was so passionate about bread that after entering college, he would buy a used car and drive around looking for places rumored to have delicious bread. When the KBS drama 'King of Baking, Kim Takgu' aired in 2010 and gained popularity, rumors spread that Chairman Hur was the real-life model for the protagonist. The story of 'King of Baking, Kim Takgu' follows a protagonist who learns how to bake delicious bread, inherits the family business, and finds success. Since then, Chairman Hur has been nicknamed the 'Bread King'.
He is known for his cautious and meticulous personality. He tends to avoid external activities and interviews.
Career
He joined Samlip Foods in 1969 to gain field experience and took over the management of Korea International Foods (now Shany) in 1982. In 1985, he partnered with the U.S. Dunkin' Group to establish BR Korea, and in 1988, he began the franchise business for the ice cream brand Baskin-Robbins. In 1986, he introduced the French-style premium bakery brand Paris Croissant in Banpo-dong, Seoul, and in 1988, he launched the bakery franchise Paris Baguette to make the brand popular. In 1993, he drew attention by bringing Dunkin' Donuts to Korea. After Samlip Foods, led by his older brother Chairman Hur Young-sun, went bankrupt and entered court receivership in 1997, Chairman Hur acquired Samlip Foods in 2002 and launched the SPC Group in 2004.
Capability
In the industry, Chairman Hur is called the 'King of Franchises'. Although all he inherited from his father was a small bread factory, he aggressively pursued the franchise business and turned SPC into the country's largest bakery company. Paris Baguette is the No. 1 bakery franchise with 3,400 stores nationwide. Currently, there are about 1,700 Baskin-Robbins stores and 700 Dunkin' stores in operation.
SPC Samlip005600 joined the '3 Trillion Won Club' in 2022 with revenue of 3.3145 trillion won. It maintained a revenue scale in the 3 trillion won range last year as well, recording 3.4333 trillion won.
Chairman Hur has shown a strong will to grow the SPC Group into a food service brand. A prime example is his introduction of the U.S. burger brand Shake Shack to Korea in 2016. Shake Shack currently operates 29 stores in Korea and is continuously increasing the number of locations. He is also expanding overseas by acquiring operation rights for Singapore and Malaysia.
Critical
Chairman Hur's judicial risk is pointed out as a major weakness for SPC. Chairman Hur was arrested in April on charges including violating the Trade Union and Labor Relations Adjustment Act. Prosecutors determined that from July 2019 to August 2022, Chairman Hur pressured bakers at PB Partners, an SPC affiliate, to withdraw from the Paris Baguette branch of the Korean Confederation of Trade Unions (KCTU) Chemical, Textile and Food Workers' Union. It was reported that unfair labor practices, such as disadvantaging union members in promotions, continued, and that SPC CEO Hwang Jae-bok reported the status of withdrawals by department to Chairman Hur. Prosecutors summoned Chairman Hur for questioning several times, but he did not comply, leading to his arrest and indictment.
On the 12th, five months after his arrest, the court accepted his bail request, and Chairman Hur was released. The court set bail conditions including residential restrictions, a 100 million won bail bond, the obligation to attend trials, a ban on destroying evidence, and a ban on contacting people involved in the case.
Chairman Hur was previously indicted on charges of breach of trust for directing the sale of affiliate shares at low prices to avoid gift taxes. In 2012, he sold shares of Mildawon, a flour production affiliate held by Paris Croissant and Shany, to Samlip at 255 won, which was lower than the fair market value (estimated at 1,595 won by prosecutors). While prosecutors judged this as an act to evade gift taxes that would be imposed on the owner family, the court acquitted him in both the first and second trials. On the 13th of this month, the prosecution appealed the second trial verdict in favor of Chairman Hur.
Controversies over Chairman Hur's management responsibility are also growing as safety accidents continue to occur at SPC. In 2022, a worker died after getting caught in a sauce mixer at an SPL bakery factory, an SPC affiliate, and last year, a worker died after getting caught in a bread dough machine at a Shany bakery factory. This led to an SPC boycott movement, and Chairman Hur issued a public apology for the consecutive serious industrial accidents.
Challenges
With Chairman Hur's arrest in April, a red light turned on for SPC's global business. This is because it became difficult to speed up overseas expansion as his decision-making on global projects became restricted. Starting with China in 2004, Chairman Hur has been seeking to enter the global market by expanding his business to the U.S., France, the U.K., Canada, Singapore, Vietnam, Cambodia, Indonesia, and Malaysia. The domestic franchise business has reached a limit in terms of growth due to various regulations.
Chairman Hur has proposed a goal of increasing the share of overseas business to over 50% and expanding Paris Baguette's overseas presence to 20 countries by 2030. Now that Chairman Hur has been released on bail, attention is focused on whether SPC can drive the expansion of its global business once again.