Cup of coffee costs $120m for firm facing China backlash
- 16 Aug 2018 at 16:50
- WRITER: BLOOMBERG NEWS
Taiwan's President Tsai Ing-wen visits Paraguay's president-elect Mario Abdo Benitez' home in Asuncion, Paraguay, on Tuesday. (Reuters photo)
TAIPEI: Gourmet Master Co stock plunged as the cafe operator got caught in a crossfire with China over Taiwan President Tsai Ing-wen’s visit to an outlet in the US for a cup of coffee.
The shares slumped 7.5% in Taipei trading Thursday, wiping $120 million from its market value, after a newspaper in China published calls to boycott the chain for hosting the Taiwanese leader at a store in Los Angeles. Ms Tsai’s Democratic Progressive Party supports independence for the island, a policy opposed by China.
The Communist Party-run Global Times yesterday reported the incident earlier this week had angered Chinese consumers as it demonstrated Gourmet Master’s support for Tsai. The cafe operator, which counts the mainland as its biggest market, issued a statement on its China website stating its support for the so-called 1992 Consensus that the island and mainland are both part of "one China".
The incident highlights the political risks of tapping the market in China with a population 60 times that of Taiwan. In 2004, Chi Mei Optoelectronics Corp’s chairman stepped down after being singled out for his pro-independence views. International airlines were given a July 25 deadline to show Taiwan as part of China on their websites.
China last year accounted for 64% of Gourmet Master’s revenue, according to data compiled by Bloomberg. The market has become a big "uncertainty", where the government could punish it with measures including hygiene inspections, Reliance Securities Investment Consultant Co vice-president Richard Lin said by phone.
Ms Tsai’s spokesman Alex Huang condemned the need for Gourmet Master to issue a "humiliating" statement. "It shouldn’t have happened in a civilised society,” Mr Huang said in a text message.
The company’s Taiwan website was down after being hacked, Taipei-based Central News Agency reported Thursday, without saying how it got the information. The website earlier had "many photos" of Ms Tsai, CNA reported. Three phone calls to company spokesman Chris Lee went unanswered.