An alleged commercial dispute involving a New York-style delicatessen has turned ugly and played out publicly, sparking a flood of memes and outpouring of online vitriol against a fellow bagel business in Hong Kong.
Mendel’s Delicatessen in K-Town, which opened in April, posted a video to its Instagram account on Saturday, apparently showing hired security guards posted outside their premises. As of Wednesday afternoon, it had been viewed more than 16,100 times.
In a lengthy caption accompanying the footage, Mendel’s said that it was “involved in a complex commercial dispute,” adding that the case was “in the hands of the court to decide.”
Explaining the security presence – who Mendel’s claimed never leave the property – the deli said that the guards had been “hired by another party to verbally and physically prevent guests and the Mendel’s team from entering the [premises], and create crippling disruption such as turning off the main power.”
Subsequent Instagram posts have detailed “harassment, hired thugs, violence, destruction of property, [and] public disturbance.” At least two featured footage of a woman – sometimes carrying a baby – who social media users identified as Rebecca Schrage, the founder of Schragels, a business that supplies bagels to a number of hotels and restaurants.
Social media storm
Amid a food and beverage scene muted by Covid-related restrictions, the viral drama quickly drew attention. The spectacle also proved to be fodder for meme accounts.
Many on social media were quick to assume that Schragels in Central – promoted as Hong Kong’s “1st and only” purveyor of New York-style bagels – was trying to intimidate its new rival.
Comments – some vicious – were left on Schragels most recent Instagram post on Saturday. Some users attacked Schrage personally, accusing her of running a campaign of intimidation. In recent days, Schragels has received a series of one-star Google reviews, including one that said: “Vile owner. Avoid.”
“It was not competitor on competitor,” Ryan Nightingale, one of the partners behind popular Central bar Shady Acres, which also has a stake in Mendel’s, told HKFP on Wednesday, alluding to a business relationship that began some time ago. “I don’t have much to add, it’s going through the courts,” he said, adding that it had already been tried in “the court of public opinion.”
In a statement released on Wednesday afternoon, Schrage said: “I am the majority shareholder [of Mendel’s Delicatessen] with 60 per cent of the equity, in addition to being the director and liquor license holder of Joy Lox Club Ltd., of which Mendel’s Delicatessen is a branch.” She added that the deli was named after her father, Michael Mendel.
According to Schrage’s statement, the dispute arose when she was asked to invest twice as much money as expected by minority shareholder, Jones Crusher Ltd, in Mendel’s. Jones Crusher Ltd is connected to Shady Acres and represented by Michael Watt.
Schrage claimed that her request for documentation to support the increased investment was denied.
Separately, the statement said “it would appear that sales generated are being diverted into other businesses that I am not a part of.” Watt was removed from the position of director, Schrage wrote, “and was informed that he was no longer to be involved in the operations.”
“This was why there was a need for security on the premises,” the statement read. “It seemed appropriate to take steps to protect the business, my concept and prevent any potential illegal activities.”
Schrage added that “Police have attended the scene many times and determined that no crimes have been committed on-site by security and no one was assaulted, contrary to the claims on social media.”
In conclusion, Schrage wrote: “I regret that a private dispute between shareholders has become ugly and so public. The matter is now before the courts and I look forward to the proper authorities settling the situation.”
On Thursday morning, Jones Crusher Ltd released its own statement, saying that “the core of the dispute involving Rebecca Schrage is the fact that while she has paid for approximately 15% of the total project cost she is attempting to take 100% of the business using hostile tactics which have outraged the public.”
“Crucially, Mendel’s was created, developed and executed by us. Rebecca had little to no involvement in the project, despite her assertions otherwise,” the statement read.
Jones Crusher continued to say that the matter had been brought to the High Court and that it “eagerly” awaited the outcome of those proceedings.
“Until that time we look forward to being able to operate our business free of the harassment and malicious activity Rebecca has become known for. We continue to believe that Hong Kong is big enough for our little bagel business to peacefully coexist with hers.”
Neither party has revealed when the dispute will be heard by the court.
Despite getting ready to close for the day, the small deli was bustling when HKFP visited on Wednesday afternoon, having been closed for two days “for the team to take a breath,” according to Mendel’s Instagram. The security guards were nowhere to be seen.
Taking sandwich orders and making coffees, Nightingale said that business had been brisk on Wednesday. “You couldn’t buy [it] today,” he said.
In Mendel’s most recent Instagram post, the deli said that the “outpouring of support was unexpected, and warms our broken spirits,” adding, “we ask that if you would like to support Mendel’s, let’s do so positively. Please lay down the pitchforks.”