City & Corporate: In the News ... E.ON

- Bring us up to speed

A senior executive at E.ON caused outrage last Wednesday after joking that a harsh winter would 'make more money for us'. The German power firm's head of emissions trading Mark Owen-Lloyd was speaking at a seminar hosted by industry regulator Ofgem when he was asked what would happen to oil and gas prices in a cold winter. The gaffe comes just weeks after E.ON raised its gas prices for UK consumers by 26 per cent and electricity bills by 16 per cent.

- The reaction?

His off-the-cuff comment made all the nationals as well as major TV and radio news bulletins, and was met with a similar level of scorn at every turn. Politicians also weighed in on the PR disaster, with Labour MP Roger Godsiff saying it showed the 'contempt' that major energy companies have for the general public. Environment Secretary Hilary Benn also failed to see the funny side.

- How did E.ON respond?

E.ON reacted quickly, putting out a statement apologising for the 'thoroughly inappropriate' comments and noting that 'in no way is this the company's view of the very serious issue of fuel poverty'. Both E.ON and Edelman, its agency adviser since March, are well aware of the need for a robust and reactive comms strategy, having both recently come under concerted PR pressure from climate change activists.

- What happens next?

The short-term damage may have been averted, but it can only add more pressure on a sector increasingly portrayed as greedy and uncaring. Already in the public dog-house over price hikes, this is unlikely to further endear energy firms to the public. The £910m energy efficiency package should buy the industry some goodwill, but many more PR disasters could make calls for an energy windfall tax harder to resist.

£877m - Annual profit of E.ON in 2007.

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