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Unfair Competition? The Peñafiel Case

An investigation prepared by Consumer Reports, which analyzed 130 brands of bottled water marketed in the United States, revealed that at least six brands were above the arsenic limit recommended for human consumption. One of the brands on this list was the company of Mexican origin Peñafiel.

The research pointed out that Peñafiel mineral water contains an average of 18.1ppb of arsenic when the recommended limit is 10 ppb. It is known that prolonged exposure to arsenic is directly associated with conditions such as high blood pressure, skin disorders, diabetes and cancer risks.

Keurig Dr. Pepper, the company that owns the brand, sent a statement announcing the temporary suspension of production at its plants in Tehuacán, Puebla, and Tlajomulco, Jalisco, which is where the production that goes to the US market comes from. In addition, he informed that the installation of new filtering systems was being completed to reduce the amount of arsenic in the drink.

Faced with this situation, the Federal Consumer Protection Agency (Profeco) and the Federal Commission for Protection against Sanitary Risks (Cofepris) carried out visits to Peñafiel plants with the intention of determining if the product in Mexico is healthy for consumers. The results were favorable for Peñafiel. The Profeco indicated that, after making the corresponding tests, they concluded that the Peñafiel mineral water meets the standards stipulated in NOM-201-SSA1-2015 for commercialization.

Thus, on May 1, the Peñafiel factory in Puebla returned to normal operations. The company trusts that what happened will be overcome soon. Currently, on its website you can read the following: ” In Grupo Peñafiel we want to reiterate that our main priority is to provide products of the highest quality to each of our consumers. Therefore, we refer to the subject that has been commented in the media about the levels of arsenic contained in mineral water “ followed by the results of the studies carried out in their production plants.

On the other hand, the federal attorney of the consumer, Ricardo Sheffield, commented that it is probable that this situation has originated due to the particular interests of some of the sponsors of Consumer Reports since the arsenic exists of natural form in the water and in other products. In this sense, the Food and Drug Administration (FDA) of the United States did not issue any opinion regarding the product of the Peñafiel brand, so, the prosecutor concludes, it is likely that it was derived from a commercial ploy by the party. of the American competitors.

No figures have been revealed regarding the effects that Peñafiel suffered with these incidents, but it must be recognized that the effective and fast management by the directors helped to prevent this crisis from spreading.

GREENPEACE VS KIT-KAT

In 2010, Greenpeace uploaded a video to Youtube that shows an office worker opening a chocolate package Kit-Kat, from which comes an orangutan finger and begins to eat while blood stains. Its purpose was to generate awareness in the consumer about the death of orangutans caused by the felling of trees for the extraction of palm oil, one of the necessary ingredients for the manufacture of chocolate bars. As part of the campaign, the NGO also denounced Sinar Mas, the then-leading supplier of Nestlé palm oil.
The campaign went viral and Nestlé opted to ask Youtube to withdraw the video, arguing copyright infringement for the use of the chocolate logo, but by the time the video was removed, it had already gone viral. At the same time, they issued a statement denying their relationship with Sinar Mas. Both actions caused Greenpeace to start another campaign, but this time requesting a boycott against all Nestlé products. Thus, Greenpeace began to circulate the video again, but now on alternative platforms to YouTube, in addition to publishing Kit-Kat logos rewritten with the word “Killer” and images of orangutans.
Despite the fact that the censorship strategy against Greenpeace was not well received by consumers, Nestlé continued with the same strategy, threatening – for example – to block Facebook users who continued to make negative publications towards the brand. Afterwards, he asked that users who did not agree with it stop following the Kit-Kat page on Facebook and began to eliminate negative comments. Being social networks a means that can give companies the opportunity to create a more personal link with consumers, it also means a risk since it allows users to maintain greater vigilance over the actions of a company and that they can not simply censor.
Due to the elimination of comments, many users created accounts with the sole purpose of continuing to disparage Kit-Kat. In response, Kit-Kat took a confrontational attitude with users, raising a lot of controversy about how the company answered its consumers. The damage to the reputation of Kit-Kat was greater since the users evidenced the inattentive answers of the company, in addition to the environmental issue that caused the crisis initially.
Eventually, Kit-Kat gave in to the pressure. That is why, in 2013, Nestlé released a statement in which it set a series of environmental objectives to meet before 2020, among which was the use of sustainable palm oil. It is not the first time that a company is affected by GreenPeace activism, for example, in 2014 when Greenpeace launched a campaign against Lego for the trade agreements it had with Shell. Brands should not forget that social networks have made companies more vulnerable by becoming the means by which users ask them to be held accountable for their actions in an organized manner.

Do you think your company may be vulnerable to social media activism? Contact us to make a damage control and containment plan, you can write us at info@riesgospoliticos.com.mx.

 

Photo by Abi Schreider on Unsplash

AIR EUROPE, A DISCRIMINATION CRISIS?

In 2013, a Spanish airline known as Air Europa had an incident with a wheelchair passenger after denying access for not carrying a passenger. The passenger Mara Zabala, of Spanish origin, complained to the employees of the airline for not allowing her to board the plane. The employees of the airline argued that, due to security policy, it was necessary for the passenger to have a companion who could assist her in case of an emergency.
Zabala, who by the way is an expert in social communication, used Twitter to denounce the company that forbade her to travel unaccompanied when other companies do. Under the hashtags “#denuncia #discapacidad #denuncia”, in a short time reached thousands of retweets, so the message of denunciation quickly gained popularity.
The tweet generated many criticisms of the company not only for denying the service to Zabala – when she had previously traveled alone with Air Europa – but also for not having facilities for people with reduced mobility that other airlines offered. The mistake of Air Europa was to ignore the damage to its image that comments on social networks were causing. The company chose to ignore the incident. The most he did was to reiterate to Zabala what his internal policy stipulated about passengers in need of additional assistance. In the absence of a communication strategy focused on mitigating the crisis, comments on social networks continued to escalate. Eventually, a problem in customer service escalated to touch a much larger issue: that of discrimination.
The problem escalated to attract the attention of Spanish legislators and, eventually, the European Commission. The Popular Party of Spain asked Air Europa to hold a meeting to discuss the incident. Given the refusal of Air Europa, the Spanish Popular Party presented the case to the European Commission through the Group of the European People’s Party.
Soon, the European Commission published a report on current legislation that allows airlines to request a passenger in a wheelchair to travel with a companion. The report stated that the legislation helps airlines benefit from forcing users with disabilities to buy another plane ticket. Based on this report, Zabala appealed to various organizations for the protection of persons with disabilities, stating that the legislation is clearly discriminatory. One of these bodies, the Spanish Committee of Representatives of Persons with Disabilities, demanded that Air Europa change its internal policy on its own initiative, since the current regulation does not guarantee them. For its part, the European Commission announced that the regulation of airlines in terms of security would be reviewed in order to address problems such as Zabala, but to date there have been no changes.
The case of Air Europa demonstrates that the omission of a problem is a problem in itself, sometimes just as damaging to reputation as making an equivocal decision about it. Starting with a tweet, the magnitude of the crisis escalated to reach the halls of national and supranational governmental instances. A strategy of silence before the problem contributed to increase the crisis since, for many users, it seemed that the company was not doing anything to solve the problem.

Do you have doubts about how to handle reputation crises? Write to info@riesgospoliticos.com.mx to provide you with the advice you need.

 

 

Photo by Doug Maloney on Unsplash

GOOD PRACTICES IN RISK MANAGEMENT: SHELL SCENARIO PLANNING

A useful tool in risk analysis is scenario planning. More and more organizations are incorporating this tool into their strategic planning. The planning of scenarios, or scenario planning , is used to map the possible outcomes of a decision and, of course, the risks and opportunities inherent in the outcome. It is a tool that, given the impossibility of predicting events, can generate adaptability to the uncertainty of the future.

In the 1960s, Shell initiated the creation of a team responsible for scenario planning, which has developed a methodology that has allowed them to anticipate major changes and disruptions in the energy industry. The postwar period of the Second World War seemed to guarantee the stability of oil prices. However, in 1965, the team that would later be known as Shell Scenario Planning , was asked to think about reasons that would cause volatility in the energy market.

Thus, they began an analysis that led them to consider events in Israel, Iran and other countries in the Middle East, which they identified as a risk factor. They did not predict the explicit creation of OPEC, but they did manage to determine that a stable oil price scenario was more unlikely than it appeared. As a result of this work, Shell was prepared to face the energy crisis of 1973 and decided to incorporate scenario planning permanently into its decision-making strategy. Different media have attributed to this methodology the anticipation of events, the reappearance of Russia as an emerging power, the liberalization of global markets in the eighties and the emergence of China as the largest consumer of energy worldwide.

Far from assuming the ability to predict events, Shell explains that it is just this inability that makes the Scenario Planning office necessary . Geraldine Wessing , Shell analyst, explains that we can only imagine the future based on past experiences. This sometimes leads decision makers to assume that the current course of action is the one that will remain, just as many oil companies assumed that the price of oil would remain stable after the Second World War.

The scenarios do not predict events, but help to understand the technological, social, demographic and political forces that affect companies and the way they evolve. Understanding these forces, in turn, stimulates the analysis of problems from multiple perspectives. This helps to contemplate trends that could impact the interests of organizations.

 

 

Approach Political Risks to provide you with the necessary advice in the implementation of scenario planning strategies to understand the trends that will impact your organization. Write to info@riesgospoliticos.com.mx .

 

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HANDLING AND PREVENTION OF CRISIS, VITAL FOR FEDEX

FedEx is the largest parcel and logistics company in the United States. He currently has a ” Superhub ” in Memphis, Tennessee, which covers an area of ​​356 hectares. This ‘ supercenter ‘ manages approximately 240 flights every day. This means that an aircraft lands every 40 seconds on average, almost the same as a military aircraft carrier. Approximately, 35% of the packages that FedEx transports pass through this node.

One of the planes that FedEx uses is the Airbus A300 of Flight 1311. Every night it moves from Denver to Memphis. It flies empty and often deviates from the direct route to Memphis, which generates a cost of approximately $ 30,000. It works as backup in case a package has been left behind, an airplane has a mechanical failure or drastically increases the activity in another operations center.

This flight works as a risk mitigator since it is present in case something does not go as expected. And it also works as an indicator of risks since it is a signal to know the vulnerability of the FedEx system. If the plane flies empty, then it indicates that everything operates normally. If the plane has to be loaded with a package it is that there is a fault in the chain, and it has to be found and fixed.

The implementation of this flight was thought by the Global Operations Control Center (GOCC), the risk unit of FedEx. This unit is installed in Memphis and is responsible for: monitoring meteorological risks, constructing scenarios and contingency plans, reviewing changes in customs regulations and coordinating operations centers in Europe and Asia with the United States, to mention some of its tasks. This unit works 24 hours a day and aims to ensure that the FedEx logistics chain remains operational in times of crisis.   

The GOCC knows that the risks for FedEx to fulfill its promise, to deliver on time, are not focused on the last link in the chain, but on its most important asset : the Superhub . Therefore, it is crucial that risk mitigation is carried out in accordance with the vulnerability of the company’s assets, not its operation. “Correct operation” is not synonymous with “Absence of risks”.

Addressing targeted risks such as theft of packages, moving trucks in dangerous neighborhoods and protecting packages of damage is important. But for many companies, the most intuitive thing is to manage the risks as if they were concentrated in the last link of the chain. “If the final part of the process is working well, then it is obvious that the rest of the chain is working correctly,” is what you tend to think.

Tools are needed to indicate the presence of a risk even if it has not yet affected its operation. Flight 1311 is an example of a resource that serves to alert about risks that are not at first sight. It exposes the vulnerability of the system and encourages the FedEx team to search for and attend it.

Most companies can not afford a risk unit with the technical rigor of the GOCC. But they can integrate risk mitigation using the reasoning behind the empty Airbus.

No company can identify and anticipate its risks completely. However, they can develop a system to prepare for a crisis and cultivate a corporate mentality in anticipation of a crisis that, in a rapidly changing world, will definitely occur. As FedEx stated: “It is possible that the GOCC fails to foresee what will cause the next carrier strike in Europe, but it does know that delays on land will occur at some point and, when they do occur, the backup plans are ready to begin.”

 

Political Risks can help your organization implement effective risk management and crisis management mechanisms. Contact us at info@riesgospoliticos.com.mx .

 

Photo by Erda Estremera on Unsplash