Corporate Reputation: Tarnished image is Golden Arches’ prize -

It was lucky for McDonald’s that the final day of its costly trial against two environmentalists last week coincided with William Hague’s election as leader of the Conservative Party. The top burger chain’s PR people must have breathed a sigh of relief that pictures of the crusading duo outside the High Court were pushed off the front pages of the papers by Hague’s grinning mug.

It was lucky for McDonald’s that the final day of its costly trial

against two environmentalists last week coincided with William Hague’s

election as leader of the Conservative Party. The top burger chain’s PR

people must have breathed a sigh of relief that pictures of the

crusading duo outside the High Court were pushed off the front pages of

the papers by Hague’s grinning mug.



But it was a small mercy. Although Mr Justice Bell ruled that McDonald’s

had been libelled by eco-warriors David Morris and Helen Steel and

ordered them to pay pounds 60,000 costs, he also ruled that some of the

allegations they had published in a leaflet were true, specifically that

McDonald’s exploited children through advertising targeted at them,

treated animals cruelly, and paid its staff lousy wages.



Morris and Steel’s leaflet was part of an anti-McDonald’s campaign

started in 1985 by their organisation London Greenpeace.



The case was billed as Goliath against David. A dollars 31billion a year

chain with 21,000 outlets in 101 countries versus an ex-postman (Morris)

and gardener (Steel) with a combined annual income of pounds 7,000.



’People don’t like Goliath beating David and that is the fundamental

image problem McDonald’s have,’ says Nigel Kennedy, managing director of

Grayling.



After the judgment, McDonald’s UK chief executive officer Paul Preston

said the firm was ’broadly satisfied’ with the outcome. But the case

cost them around pounds 10 million and loss of reputation because, as

one commentator put it: ’They were kicking Morris and Steel where it

hurt, a little harder than they needed to.’



Furthermore, while the original leaflet was seen by a handful of people,

the Web site set up by the campaigners’ supporters has now been accessed

over 13 million times.



So why did McDonald’s persevere with the case, dragging it through the

media for 18 months? According to one source: ’They were heavily advised

by their lawyers and did not listen to PR advice at the time. ’Preston

pursued the case with a vengeance and took it extremely personally.’



Initially, claims the source, ’Preston was supported by the corporation

in the USA, based on the fact that everyone thought that it would all be

over in 90 days. No-one could have predicted the resilience and stamina

of the defendants, but still, that advice looks rather poor now.’



Several industry commentators share the view that McDonald’s was

ill-advised.



Crisis management consultant John Stonborough says although a company

has to defend itself, ’my conclusion was that it was probably not the

right decision. However there are times when you have to stand up to

this kind of attack.’



McDonald’s communications director Mike Love told PR Week that the

allegations could not be ignored because people would assume they had

some foundation.



’The allegations were being constantly repeated by third parties. We had

children of employees coming home and asking their parents if this was

what McDonald’s did,’ he said.



As yet, sales appear to have been unaffected by McLibel with the average

Big Mac eater oblivious to the issues raised. So it may appear that

McDonald’s has suffered only superficial wounds. Alison Canning,

managing director of First and 42nd, which specialises in brand

protection and risk management, certainly thinks so.



’The good news for McDonald’s is that it won’t stick in people’s minds

for long.’ But, she concedes: ’the case has damaged their image to a

certain extent and makes McDonald’s look less ethical than it should

have done.’



Although it is not expected that McDonald’s will react immediately to

the rulings that went against it, there is some feeling within the

industry that it needs to address the judge’s criticisms.



Graham Goodkind, a director with Lynne Franks PR suggests that

McDonald’s needs to be seen to improve the conditions under which they

rear and slaughter animals and improve wages for staff. He believes that

all corporations, not just McDonald’s, will increasingly fall under this

kind of spotlight.



He says: ’People who spend millions glossing over the less pleasant

aspects of their business are going to have to see their company warts

and all.



And if those warts are not the sort they want to have exposed then it’s

up to corporate communications people to make sure those warts are dealt

with.’



Consumers are increasingly calling the shots. And the success of

single-issue eco-warriors like the McLibel Two, in at least raising

awareness, if not winning the battle, is a phenomena that is likely to

grow rather than diminish. Consumers are already expecting higher

standards from multinationals and increasingly associate the brand with

the corporation behind it.



Although the die-hard burger fan will not be put off, the creeping

influence of the ethical consumer cannot be underestimated. A food

company which has been found to be ill-treating animals and exploiting

children is a long-term PR nightmare, whatever the result of the case.



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