How G-Dragon’s Drug Scandal Affect Brand Image of BMW, Chanel, and More + Potential Penalties
G-Dragon has been booked with violating drug control laws, causing a stir in the advertising industry
While G-Dragon has completely denied the drug allegations, the issue of penalty due to damage to the image of the brands he represents as a model is expected to be difficult to avoid.
As a fashion icon who has taken on numerous advertising and brand modeling roles, some brands that had G-Dragon as their model are reportedly considering cutting ties with him. This is seen as a precaution to prevent damage to the brand’s image.
Recently, some brands have made G-Dragon’s advertisements private. BMW Korea took down G-Dragon’s advertisements that he appeared in on its official channel on October 26th. G-Dragon has been an ambassador for BMW’s “New XM” since the beginning of 2023. BMW Korea also invited him to major promotional events.
G-Dragon was selected as Chanel’s first Asian male global ambassador in 2016. He has been actively participating in various Chanel events even during his hiatus.
With suspicions arising about G-Dragon’s alleged drug use due to certain videos and photos featuring clothing with Chanel logos, the impact of this scandal on the brand’s image could be significant.
Chanel has not provided any official statements regarding this matter, but they are aware of the situation. As of now, Chanel has not removed G-Dragon’s videos and photos.
If it is revealed in the future police investigation that G-Dragon indeed used drugs, Chanel may also take steps to distance themselves from him.
Nike, while G-Dragon is not an exclusive model, gained popularity for their collaboration with him on various items from sneakers to jackets, pants, and more, with some reselling for as much as 40 million KRW. G-Dragon has been working with Nike since 2019.
Advertisers may take legal action to claim penalties from G-Dragon. In the industry, it is common to include a clause in advertising contracts that allows advertisers to claim penalties, typically ranging from two to three times the advertising fee, if the advertising model tarnishes the brand’s image through law violations or other actions.
A representative from the advertising industry said, “In G-Dragon’s case, he has been on a hiatus from BIGBANG activities since the release of ‘Flower Road’ in 2018 and has not been actively engaged in his main job apart from social media activities. With over 10 advertising deals in various movies and OTT projects, his penalties may be less than those of Yoo Ah-in, who was put in crisis with over 1 billion KRW. However, due to the significant image damage to the luxury brand Chanel, if Chanel demands penalties and compensation from G-Dragon, the amount could be large.”
Currently, G-Dragon maintains his denial. He declared “I have never used drugs.” However, the legal community suggests that even if the allegations turn out to be untrue, if the advertising model was partly responsible for the decline in the brand’s image, advertisers could claim penalties.
JY Law Firm’s Attorney Jung Chong-myeong told Sports Seoul, “Usually, clauses that include the obligation to maintain dignity are included in advertising model contracts. Even before the court verdict is released, if there is a suspicion to a certain extent, or if it is not revealed, advertisers can demand penalties if the celebrity’s image declines and, as a result, the brand’s image is also damaged.“
Source: Nate
