Business in Belgium is braced for a year of political upheaval after the elections for the regional, community, federal, and European parliaments on June 13. Prime minister Jean-Luc Dehaene and his coalition colleagues lost their majority, winning around half the seats in the 150-seat federal parliament, and ending an 11-year run for left-center coalitions.
Many felt the government had mishandled a string of scandals?ranging from Mafia-style murder to bribery?and shattered public faith in the authorities. Last September, in the wake of the bungled inquiry into alleged pedophile Marc Dutroux, Belgians gritted their teeth over the 'trial of the century'. The new year found former NATO chief and ex-Belgian economics minister Willy Claes - plus two other prominent politicians?guilty of corruption over procurement deals with the defense industry.
The recent food safety scandal put the final nail in the ruling coalition's coffin. Belgian chicken, eggs, and all products linked to them?including widely exported Belgian chocolates?were swept off the shelves. For a nation weary of airing its dirty linen on the world stage, the elections signaled a clean start, with the leftist Liberals and the Greens gaining most seats.
'There is the promise of a young breed of politicians who will provide the country's business community with a new agenda based on true relationships, rather than the old suspicion that money buys favors,' says Jean-Leopold Schuybroek, ICO president and Interel Marien managing partner.
Election fever has brought renewed interest in public affairs work. Schuybroek says growth in this area is so strong that last year his organization set up a special Belgian public affairs division.
However, in common with much of the rest of Europe, this activity is also tied in to a raft of high-profile acquisitions and mergers. In 1998, the privately-owned French utilities group Suez Lyonnaise des Eaux bought a 100% stake in Societe Generale de Belgique following a public share offer, and so gained control of more than 50% of Belgian utility Tractebel.
In addition, Brussels-based oil and petroleum company Petrofina?Belgium's largest corporation?was taken over by French-owned Total to form TotalFina.
However, Johan Ral, chairman of the Belgium public relations association BGPRA/ABCRP and senior partner of European Communication Strategies, the agency at number 12 with 50% growth, believes such moves have benefitted the industry. 'Five or six years ago, we were lagging behind compared to the rest of Europe,' he says. 'But with these fundamental changes in the business environment in Belgium, we have seen both growing professionalism and an acknowledgement by companies that communication is an integral part of their business strategy.'
In 1998, to provide greater rigor and transparency for its clients, the association rolled out a new Code of Practice to its 15 members. This nine-point charter includes a commitment to evaluation of PR activities based on pre-determined methodology and objectives, and an agreement to be independently audited at least once a year.
Ral says this move underlines the fact that the PR industry in Belgium is expanding and being taken more seriously. Figures from members indicate that business is booming. In 1998, total fee income was up by more than 20%?a little more than dollars 25 million?and this was matched by an increase in staffing levels.
Stock market activity was a major boost to PR agencies during 1998. Shandwick Belgium managing director Eric Potier says his agency worked on a raft of IPOs including Mobistar, Belgium's second largest mobile phone operator.
However, the shopping spree undertaken by foreign players on the country's home-grown multi-nationals and state-owned operations also brought its fair share of crisis work in 1998.
Last June, when the Fortis group's bid to buy Generale Banque was under threat from a counter offer by Dutch banking giant ABN Amro, Shandwick was brought in to handle the emergency. This in turn led to the PR firm outlining a big restructuring program. Potier says: 'Every sector from the financial to the automobile market is seeing spectacular closures and downsizing. You have to remember that our labor costs are extremely high because of the tax system. For a Belgian worker to have the same amount of money in his pocket as a worker in the UK, you need to pay him almost twice as much.'
As a result of this punishing tax regime, companies with large manual workforces such as luggage company Samsonite and jeans giant Levi Strauss scrapped their Belgian manufacturing operations in 1998?the latter at the expense of 15,000 jobs. But Schuybroek highlights the flip side of the situation: 'There is a major move by foreign multi-nationals to locate their European coordination centers in Belgium, so we are now in a situation where we have a very strong service economy, with over 65% of GNP,' he says. Only last month Coca-Cola, now facing a contamination crisis of its own, announced plans to open its largest operation outside the US in Belgium within two years.
No doubt such decisions are heavily influenced by Brussels' position at the heart of the European Union. The deregulation of markets such as telecommunication and energy, coupled with increasing questions of competition arising from mergers and acquisitions, means access to and influence over the European Commission is a serious matter. GPC Brussels managing director Caroline Wunnerlich says, 'The commercial opportunities around influencing decisions have become more apparent. For example, what goes for the free market in the UK should apply to France, so companies need to report to regulators and inform them of successes and failures.'
Over the past 10 years, GPC has built itself up to be the leading public affairs and government relations consultancy in Brussels, with a staff of approximately 40. In this time Wunnerlich says, her organization has moved from a simple monitoring role to a more strategic position. 'The market is becoming more competitive for higher-end services, so we now provide more sophisticated input into clients' business objectives,' she explains.
Working with clients ranging from chemical and food manufacturers to trade associa-tions such as the Association of Plastic Manufacturers in Europe (APME), GPC's environmental practice remains its largest. However, Wunnerlich says recent growth has also come from developing a stronger relationship with the media. 'In trade or policy-led disputes, we understand the issues so we have become more proactive in briefing the Belgium press corps,' she says.
Burson-Marsteller, which did not enter the ratings last year, took top position this time. However, the top of the Belgian table is set to look very different next year. Earlier this month, Ellips Communication and Country-wide Porter Novelli, number seven and nine respectively, merged, with CPN Brussels managing director Dominic Lyle as chairman. The merged company will have a projected fee income of more than dollars 6.4 million, and will move to new premises in 2000.
EUROPEAN AGENCIES: BELGIUM
Rank Company Fee income (dollars) Growth
98 98 97 %
1 Burson-Marsteller* 4,828,800 5,478,400 -12
2 GPC 4,819,765 3,495,306 38
3 Interel Marien* 4,043,200 3,200,000 26
4 H&K Int. (Belgium)* 3,683,200 2,998,400 23
5 GCI/APCO 3,056,000 1,808,000 69
6 The Rowland Company* 2,880,000 3,360,000 -14
7 Ellips 2,795,341 2,316,139 21
8 Ogilvy PR Worldwide* 2,726,400 1,731,200 57
9 Countrywide Porter Novelli 2,593,600 1,755,075 48
10 Shandwick* 2,380,800 2,086,400 14
11 Edelman PR Worldwide 1,517,690 1,227,694 24
12 Euro Comm Strategies* 1,499,128 999,554 50
13 Praaning Meines Cons 1,280,000 1,280,000 0
14 PRP* 1,254,400 1,368,000 -8
15 Decitime* 1,120,800 1,019,200 10
16 European Strategy 1,042,720 672,232 55
17 Attitudes PR* 894,738 578,947 55
18 Anthonissen & Assoc* 697,518 556,270 25
19 Luna 653,333 493,333 32
20 Leads United 522,022 287,112 82
21 Pyramid* 448,000 448,000 0
22 Kate Thomas & Kleyn* 288,000 240,000 20
23 Communication Partners* 239,600 190,349 26
24 Europublic 180,672 179,200 1
Rank Company Location Status
1 Burson-Marsteller* Brussels B-M subsidiary
2 GPC Brussels GPC Group subsidiary
3 Interel Marien* Brussels PROI network
4 H&K Int. (Belgium)* Brussels H&K subsidiary
5 GCI/APCO Brussels GCI subsidiary
6 The Rowland Company* Brussels Rowland network
7 Ellips Brussels Independent
8 Ogilvy PR Worldwide* Brussels Ogilvy subsidiary
9 Countrywide Porter Novelli Brussels CPN subsidiary
10 Shandwick* Brussels IPR subsidiary
11 Edelman PR Worldwide Brussels Edelman subsidiary
12 Euro Comm Strategies* Brussels Independent
13 Praaning Meines Cons Brussels Praaning Meines Group
14 PRP* Brussels Independent
15 Decitime* Brussels IPR Network
16 European Strategy Brussels Grayling subsidiary
17 Attitudes PR* Brussels IPREX network
18 Anthonissen & Assoc* Antwerp Independent
19 Luna Hoeilaart Independent
20 Leads United Antwerp InterPR
21 Pyramid* Brussels ECCO network
22 Kate Thomas & Kleyn* Brussels ERIC network
23 Communication Partners* Brussels Independent
24 Europublic Brussels Independent
All figures relate to the year ended 31 December 1998;
Fee income = PR fees only;
* Denotes membership of BGPRA/ABCRP