Declaring and using MySQL varchar variables

This works fine for me using MySQL 5.1.35:

DELIMITER $$

DROP PROCEDURE IF EXISTS `example`.`test` $$
CREATE PROCEDURE `example`.`test` ()
BEGIN

  DECLARE FOO varchar(7);
  DECLARE oldFOO varchar(7);
  SET FOO = '138';
  SET oldFOO = CONCAT('0', FOO);

  update mypermits
     set person = FOO
   where person = oldFOO;

END $$

DELIMITER ;

Table:

DROP TABLE IF EXISTS `example`.`mypermits`;
CREATE TABLE  `example`.`mypermits` (
  `person` varchar(7) NOT NULL
) ENGINE=InnoDB DEFAULT CHARSET=latin1;

INSERT INTO mypermits VALUES ('0138');

CALL test()