Stocks of Choco Pies are piling up in the warehouses of suppliers because the Gaeseong Industrial Complex has remained shut down for the last two months

2013-06-13 17:15

Choco Pie stocks pile up as Gaeseong closure continues

By Nam Hyun-woo

Stocks of Choco Pies are piling up in the warehouses of suppliers because the Gaeseong Industrial Complex has remained shut down for the last two months.

A large quantity of chocolate-covered marshmallow-filled snacks were sent to the joint industrial complex just north of the Demilitarized Zone (DMZ) because South Korean companies offered incentives to 53,000 Gaeseong workers, including the round chocolate snack. Since incentive money was banned for being too “capitalist,” the snacks were provided instead of currency. North Koreans there were fascinated with the sweet taste. Indeed, the snacks became so sought after in the complex, that it became clear they might even help soothe the North’s saber-rattling.

Orion, Korea’s second-largest confectionary company that manufactures Choco Pie, said that tens of thousands of Choco Pies were distributed to employees at Gaeseong every day.

However, when the communist regime launched its third nuclear test on Feb. 12, tension between the two countries escalated and it unilaterally shut down the joint industrial park, leaving piles of Choco Pie stocked there.

There are six Choco Pie wholesalers in the South, which buy the snack from the South’s confectionary makers such as Orion and Lotte Confectionary.

One of the wholesalers, Samwoo, has supplied food products such as Choco Pies and instant noodles to companies in the industrial park since 2010. Since the park closed in April, it has accumulated Choco Pie stocks amounting to 281 million won ($246,000), according to Gyeonggi Provincial Government, where the company is based.

Since the weight of one Choco Pie product for the complex is lighter than others for the domestic markets ― 32 grams against 35 grams ― it is difficult to distribute the stock to local retailers.

According to an official at Lotte Confectionary, the company produces the two types of Choco Pies to reduce the unit price.

As the stock piles up, Samwoo, which recorded average sales of 300 million won monthly, gave eight employees time off.

Lotte also said they have an inventory of Choco Pies for a week.

“As the South-North stalemate protracts, some of our North Korea products are bound here,” the Lotte official said.

Orion said they have sold March products and have no stocks, but there are no additional orders for Choco Pies heading across the border between the two Koreas.

“North Korean authorities are very sensitive about the snack attracting Gaeseong workers, but it is certain that Choco Pie is one of their most favored snacks,” said an official at Orion.

As wholesale firms struggle, Gyeonggi Province is considering buying some of these stocks and providing it to students and children from underprivileged families.

“Nothing has been confirmed yet, but if the current standoff between the two Koreas continues, we will positively review providing the snacks to 24 schools and 735 community child centers in the province,” said Lee Yong-hee, the Director of Lifelong Education Bureau at Gyeonggi Provincial Government.