ANALYSIS: PUBLIC AFFAIRS; Film giants snap at each other’s heels

As the World Trade Organisation investigates alleged restrictive practices in the consumer photographic market, film giants Kodak and FujiFilm are gearing up for a PR battle royal

As the World Trade Organisation investigates alleged restrictive

practices in the consumer photographic market, film giants Kodak and

FujiFilm are gearing up for a PR battle royal



Although Kodak’s yellow insignia helps light up Tokyo’s neon skyline,

the US company has a mere ten per cent of the Japanese consumer

photographic products market - the second largest in the world.



Arch-rival Fujifilm, on the other hand, has around 70 per cent - the

result, says Kodak, of an anti-competitive collaboration between the

Japanese government, Fujifilm and Japanese retail groups.



The row over alleged Japanese protectionism has been running for

decades, including disputes over passenger aviation, insurance and semi-

conductor products. It is a war fought on many fronts, including an

increasingly fierce public relations battle.



Last week, Kodak appointed Leedex for a pan-European media relations

drive, while Fujifilm is poised to hire Edelman Europe for media

relations and lobbying.



So why has the PR battleground in a dispute between American and

Japanese companies shifted to Europe?



For 18 months, Kodak’s team in Washington, supported by lobby firm

Fratelli Group, has lobbied the Clinton administration claiming it has

lost dollars 5.5 billion in potential trade. It has been successful. The

US trade representative investigated the Japanese film market and found

Japan guilty as charged.



However the US government decided against unilateral trade sanctions,

referring the issue to the World Trade Organisation in Geneva.



The US has broadened the issue to win multi-lateral support in prising

open the huge Japanese market. Indeed, any WTO decision would set a

precedent and Europe’s companies stand to benefit.



The WTO decision could take anything from six to 18 months and the two

film giants are pulling out the stops to influence the outcome.



As a quasi-judicial body it’s virtually impossible to lobby the WTO

directly. So Kodak and Fujifilm’s programmes are designed to win a broad

spectrum of support, and build a solid case for their lawyers.



Peter Boyce, UK PR manager for Kodak, says: ‘Until now we’ve been

supplying information to people who ask for it, but activity in the UK

has been at a low level. But now the focus is on Europe and whether

European companies are facing the same problems as Kodak.’



Kodak’s European campaign is being co-ordinated by European director of

public relations Michael O’Farrell. He says: ‘The case has had wide

coverage in the US and Japan, but little in Europe. Our corporate

presence in Europe hasn’t been strong historically. So we appointed

Leedex to build our profile.’



O’Farrell says he doesn’t believe PR can actually influence the

decision, but it will help people understand the issues and Kodak’s

position.



Kodak staff in each European country will be undertaking government

relations, while director of European affairs Bengt Eklund is

concentrating on public affairs in Brussels.



Fujifilm has also been involved in high-level US activity. Its response

to Kodak’s accusations is that its Japanese market domination is the

result of competition and consumer preference rather than protectionism.



In August, the US president of Fujifilm, Osamu Inoue, welcomed the fact

that the WTO was reviewing the case.



He said: ‘We are confident that Fujifilm’s position will be vindicated.

Fujifilm is ready to put its products and services up against Kodak,

without governmental favouritism, in Japan, the US and everywhere else

in the world.’



In other words, it wants to move the emphasis away from perceived

Japanese barriers to trade, towards a global view. Fujifilm claims that

it faces barriers in the US market and that Washington is seeking

special treatment for Kodak.



But, despite bullish words from Fujifilm’s US management, Edelman will

be embarking on a European campaign, ranging from government relations

to influencing its consumers.



Tom Shaw, Fujifilm’s director of corporate communications in the US,

says: ‘We’re just finalising our European strategy, but it will be

similar to that in the US. We’re convinced the facts are on our side and

our goal is to enlighten our publics as much as possible.’



Independent observers are uncertain about the likely outcome. Paul

Adamson, chairman of European public affairs specialist Adamson

Associates, says: ‘In the past, specialist trade disputes were

characterised by specialist legal input, but the WTO is a new body and

there are no set rules of approach - in this sense it’s up for creative

thinking. I would favour targeted lobbying, but media relations may

prove a valuable tool.’



Public affairs consultant Clare Wenner, who lobbied for Geest on the

ongoing EU-banana trade dispute, is sceptical about whether lobbying

will affect the decision: ‘The WTO can be difficult to lobby and it may

prove counter-productive. Both companies have their national champions,

but when it comes to the panel’s decision, this will prove very

difficult to influence in PR terms.’



The stakes are high. Once the WTO has made the decision, it will be

virtually impossible to overturn. Neither side is giving any quarter.

‘We believe our case is exceptionally well documented and extremely

strong.’ says O’Farrell.



Shaw counters: ‘If the judgment is made on the facts rather than

politics, we’ll win.’



As Adamson says: ‘Many in the public affairs community will be watching

this one very closely’.



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