Monday, October 13, 2008

The Worst Kind of PR (reposted from The Pitch)

The Chinese poisoned milk scandal just goes from bad to worse. It kind of reminds me of George W Bush’s American presidency, it started off in controversy, took some more big hits and still continues to get worse at an alarming rate.

The complete inability of the Chinese government and the Sanlu Group (the company at the centre of the crisis) to actually deal with the scandal is astounding. The latest installment, according to a story in today’s Straits Times, is that Sanlu had actually asked the Chinese government for help in covering up the crisis. The authorities were made aware of the problem about a week before the Beijing Games began, and chose to sweep it under the carpet.Apparently they were worried about the scandal ‘tarnishing’ China’s image before the Games, and wanted to “avoid creating a negative influence in society”.

Well they were ‘successful’, on some levels, as they did cover up it during the Games so that China’s first Olympics went off without a hitch. That is of course if you forget the dramas surrounding the Olympic torch and Free Tibet protests, the pollution in Beijing and the attempts to stifle the freedom of world media before the Games started. Yeah sure, the 2008 Olympics were problem-free.

And trying to avoid creating a negative influence in society? Well they’ve failed miserably at that. When babies die, you have your negative influence right there. It’s unavoidable. Child fatalities kind of do that to you. Any sort of cover up of that is simply pointless.

The reaction to the tainted milk crisis from those involved as been pitiful at best. It took the intervention of the New Zealand Prime Minister Helen Clark to spur the Chinese government in to action. Since then panic has spread, and more milk related products have been pulled from the shelves on a daily basis. The affect on the milk, confectionary and dairy sectors has been devastating, and will continue to be so for months, maybe years to come. The crisis has spread from China to the rest of APAC, and global giants such as Nestle, Cadbury, Unilever and Heinz been tainted.

China has not managed to contain the crisis, or managed to minimize its fallout. Some of this could have been avoided by going on the offensive.

Taking cues from the reactions to other product contaminations in other countries, the Chinese government and Sanlu should have ordered a massive product recall. Before there is a chance to test all the products, get them out of stores, even if some may be OK. The mere question of possible contamination should be enough to pull it off the shelf.

Secondly, there should have been a huge public information campaign to inform consumers of what was happening and why, and to reassure them that the problem will be fixed. At a time like this information is vital, and to stop harming more people and creating more hype you have to get active. But now this is basically too late. 53,000 children are ill and four babies are dead. Consumers in China are enraged, and rightly so, while consumers the world over are skeptical about buying anything that might hail from Asia and be milk-related.

Trying to cover up information that will eventually get out is pointless and very harmful. It is much better to try engage with the community, to work to solve the crisis, rather than trying to avoid it or to point fingers at those responsible.

The damage has been done now, and it’s going to take a hell-of-a-lot of advertising and marketing dollars to put the likes of Sanlu and the other brands involved back to the position they were in before the scandal began.

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