South Korean retailer drops Reckitt Benckiser products after sterilizer scandal

SEOUL (Reuters) - South Korean retailer Lotte Mart stopped ordering Reckitt Benckiser products on Wednesday along with some e-commerce sites, after the British firm apologized for selling humidifier sterilizers linked to deadly lung injuries.

Family member of victims who have injuries linked to the use of humidifier sterilizers, some marketed by Reckitt Benckiser, complains to Ata Safdar (R), head of Reckitt Benckiser Korea and Japan, during his news conference to apologize for deadly lung injuries linked to the use of the humidifier sterilizers in Seoul, South Korea, May 2, 2016. Yonhap/Yun Dong-Jin/via Reuters

During an emotional televised news conference on Monday, the head of the company’s South Korean unit accepted responsibility. South Korea said last year that 92 people were thought to have died from causes related to the humidifier products, not all of them made by Oxy Reckitt Benckiser.

South Korea says 530 people registered claims of lung ailments from using humidifier sterilizers made by over a dozen companies. The government banned the products, which it believes were only sold in South Korea, in 2011.

Of those claims, 221 were assessed by the government as being eligible for compensation. Of those, 177 had used the sterilizer sold by Reckitt, which was the market leader, having been on sale for more than a decade.

Reckitt says it has settled about 80 percent of any cases that resulted from those claims. It also set up a 5 billion won ($4.3 million) humanitarian fund in 2013 to aid the afflicted while the claims were making their way through the court system.

Humidifiers are widely used in offices and homes across north Asia where the winters are dry. The sterilizers, in liquid form, were added to the water to keep it clean.

“This is not an issue just for the Korean branch and the victims but for the head of the main office to get on his knees and apologize to the victims,” Choi Ye-yong, who heads the Asian Citizens’ Centre for Environment and Health, said on Wednesday.

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Lotte Mart, part of Lotte Shopping and one of South Korea’s biggest discount store chains, stopped ordering Reckitt Benckiser products on Wednesday, company spokesman Yoon Ji-yoon told Reuters.

Lotte Mart was among supermarket chains that sold the sterilizers under their own brand, and last month made its own public apology.

South Korean e-commerce companies Coupang and Ticketmonster Inc said on Wednesday they would stop selling Reckitt Benckiser products. Its global brands include Dettol antiseptic wash and Durex condoms.

South Korean prosecutors, who have opened a criminal investigation, arrested a university professor on suspicion of fabricating data in a report for Oxy Reckitt Benckiser, a prosecution official involved in the case told Reuters.

The South Korean unit of Reckitt Benckiser did not have immediate comment when asked about the arrest, although the head of the unit Ata Safdar, said in his apology on Monday the company was cooperating with prosecutors.

Choi and Kim Deok-jong, the father of a five-year-old boy who died in 2009 from lung disease linked by the South Korean government to the use of humidifier sterilizers, plan a protest at Thursday’s Reckitt Benckiser shareholders’ meeting in London, according to an activist group.

Reckitt Benckiser spokeswoman Patty O’Hayer in London said the company respected everybody’s right to demonstrate.

“We have stepped up and acknowledged our responsibility in this tragedy and are working hard to make amends and to address the issues of all those who have been impacted,” she said.

“The impact on the business is understandable. People are outraged and they need to find remedy,” she said, adding that the company was working with the government to get results for people. “That’s what’s important, not a boycott.”

Globally, the Reckitt Benckiser group posted revenue of 8.87 billion pounds ($12.9 billion) in 2015.

Additional reporting by Jee Heun Kahng in SEOUL and Martinne Geller in LONDON; Editing by Nick Macfie and Elaine Hardcastle