BEHIND THE HEADLINES: Consumer and financial PR clash at Iceland

It must be puzzling and disheartening when your latest PR, ad or marketing campaign is widely praised by so-called experts, only for the product it is working for to fail.

It must be puzzling and disheartening when your latest PR, ad or marketing campaign is widely praised by so-called experts, only for the product it is working for to fail.

PR staff at Iceland may be pondering this, as the supermarket chain is embroiled in a week of bad news culminating in the resignation of chairman Malcolm Walker on Wednesday (31 January).

Up until now, Iceland has enjoyed much goodwill from the media and the City. With its innovative policies on food - banning GM foods, artificial colours and flavours, and a commitment to organic food - plus the media-friendly Walker, the company was winning praise. Not least from this magazine, which named Iceland's PR team 'in-house department of the year' at last year's PRWeek Awards.

But last week Iceland suddenly issued a profits warning and had to explain its chairman's pounds 14m sale of shares only five week's previously.

The current state of Iceland shows how a small point can become a national news story. It all began with one line in a profits warning trading statement. But when that one line concerns organic food (and, indirectly, the whole issue of whether ethics and profits are compatible), it simply blew up.

For those in PR, it is also an interesting lesson in how consumer and financial PR work together - or not. Hilary Berg, head of public relations, has gone on the record about her policy of openness and availability to the media. The consumer PR function also has a philosophy of consultation with the public, to make sure it is listening to its customers.

But financial PR for listed companies, with all its regulations on disclosing sensitive information, is a different animal. Financial PR shop Hudson Sandler deals with Iceland's City relations, and reports directly to the board and the financial director. It can't have the same openness towards the media.

So, what now for Iceland?

As far as the 'Food you can trust' brand value goes, 'we will continue to pioneer good quality, safe food, and we will listen to and champion consumer concern,' says Berg.

All that goodwill hasn't been for nothing, either. Berg says she has received messages of support from not only customers, but also from consumer media journalists.

Berg believes that in times of trouble the secret is to 'apply the same principles which make you successful'. So openness and availability are here to stay for Iceland's PR team?



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