Chain reactions: suppliers can be hazardous to rep
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Holmes Report
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Chain reactions: suppliers can be hazardous to rep

Paul Holmes

Earlier this year, Cohn & Wolfe’s Geoff Beattie predicted—as part of our corporate trend forecast—that supply chain issues were going to rise to the top of the agenda. “Companies are under more scrutiny than ever before on all aspects of supply chain…. Recent cases have shown that even the biggest brands can be vulnerable on these issues.” Kudos to Geoff for his prescience (not so much to me, since I placed this fifth on my list of five trends) because events in the UK over the past couple have surely moved supply chain issues to the top of the corporate reputation agenda for smart PR executives. Several iconic British brands—from food manufacturer Findus to retail giant Tesco—have been reeling from the revelation that several products marketed as beef actually contained horse meat (anywhere from 60 percent to 100 percent, according to media reports). The companies in question have reacted with varying degrees of aplomb. Tesco’s swift action earned the company plaudits from Jeff Randall in the Telegraph, despite the upscale media’s slightly snobbish contempt for everything the supermarket chain stands for. (Although Randall has a pretty jaundiced view of the public relations business.) Findus, which remarkably appears to have no full-time communications staff, fared slightly worse, especially when it was claimed that the company sat on information about horsemeat for days before pulling its products off the shelves. But the larger point is that this crisis should provide a wake-up call for companies in the food business and beyond. Until recently, many consumers have been inclined to cut companies some slack for the activities of their suppliers. In some cases, there has even been the suggestion that companies whose suppliers failed to live up to certain health and safety or product quality standards were “victims” just as much as consumers. But in the wake of this crisis—and others involving brands ranging from Nike to Ford to Apple—that’s no longer going to be viable. Companies will be—as they should be—held responsible for the actions of those with whom they choose to do business. If problems do arise, they will need to show that their due diligence went beyond pro forma paperwork. With that in mind, public relations people should be taking a hands-on role, instigating and leading (or at least monitoring very closely) internal investigations to assess the potential reputation risk from supplier relationships.
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