Brands face trust issues with ‘Made in China’

madeinchina
Glancing through this site’s visitor stats, I noticed a high number of inbound connections coming from Google searches on ‘cadbury recall products’ and ‘cadbury list of recalled products.’

Those searching arrived at “Cadbury product recall needs two-way dialogue,” a post I wrote in June 2006 regarding the salmonella contamination scare in the UK confronting Cadbury at that time that led the chocolate maker to recall thousands of its products from store shelves.

Looking at the stats a bit closer, I see that the majority of searchers are in the US. Not unexpected from a geographical point of view. But I also notice a large number from countries in South-East Asia, notably Singapore, Malaysia, Taiwan, China and (curiously to me) Vietnam.

Why are people searching today for Cadbury’s recalled products’?

It must surely coincide with news today that Cadbury is recalling eleven of its chocolate brands from certain Asian markets because the products concerned, manufactured in China, allegedly contain melamine, a chemical substance used in plastics manufacture.

Melamine is at the heart of the contaminated milk scandal in China which has so far led to over 50,000 Chinese children being hospitalized with poisoning.

You’ve probably seen news reporting about this scandal during the past week. It hasn’t spread beyond China but as news travels fast, it clearly is of concern to consumers in other countries in that part of the world – and it looks like people in countries further afield are now becoming concerned.

In today’s FIR #384 podcast, our correspondent in Singapore, Michael Netzley, reports on what the owners of a number of well-known consumer brands are doing in his part of the world in their attempts to reassure consumers that their products are safe.

Global brands Michael mentions include Dutch Lady (Friesland Foods), Oreo (Nabisco), Wall’s Ice Cream (Unilever), Dove Candy (Mars), M&Ms (Mars), Snickers (Mars) and Nestle cereals.

In most cases, the brand owners are placing prominent ads in local newspapers in Singapore in tandem with government assurances that such products are safe.

Whether that will be enough to persuade consumers that it’s safe to purchase and eat these milk-based products – all manufactured in China – is pretty doubtful.

We’re talking about people’s perceptions, what they’re seeing on the news, and 50,000 ill children. This is about emotion, not logic, and word of mouth.

And what about China itself? What impact will this situation have on other, related, perceptions – from manufacturers – that establishing a significant part of your supply chain in China is too risky a venture?

After all, this isn’t the first such scandal this year – think about toothpaste and Mattell toys.

The real crisis test is likely to be when (not if) word of mouth about brands and how trusted people regard them travels to major markets in the US and Europe.

I hope that all of these companies have crisis communication plans well in hand for eventualities such as this.

Neville Hobson

Social Strategist, Communicator, Writer, and Podcaster with a curiosity for tech and how people use it. Believer in an Internet for everyone. Early adopter (and leaver) and experimenter with social media. Occasional test pilot of shiny new objects. Avid tea drinker.

  1. brian

    Hi Neville, I’ve been keeping up with this incident, and i can comment that information does spread fast here in Singapore -)

    local ads, product spokespeople addressing the issue in the news, the Agri-food and Vetirinary Authority of Singapore (AVA) have disseminated a list of unsafe products through all the major news channels, and this list has proven very useful in that many bloggers are picking it up, and sticking it on their blogs.

    Currently all tainted products have been pulled off shelves, and since 19 Sep, the AVA has introduced a blanket ban on all milk prodcuts from China.

    Do get in touch with me if you’re like mroe correspondence from this part of the globe -)

  2. Michael Netzley

    Hi Neville,

    This morning’s Straits Times ran an article describing public reactions to the ads I mentioned in the FIR report (you describe above). To some degree, the ads seem to be causing confusing. Singapore’s AVA says be cautious while the brands are running ads claiming everything is safe here in Singapore.

    Now this creates some interesting issues. Foremost, corporate communicators must go head-to-head with the government, and Singapore’s government has a 40+ year history of being competent and trustworthy. Not an enviable task for the corporate communicator.

    Second, we have the presumption that newspaper ads will change behaviors during a crisis. You have to respond, of course, but I must wonder about the assumptions behind newspaper ads plus little else (at least that I can see, and I am watching this issue each day).

    Here is a link to a newspaper article. http://news.asiaone.com/News/the%2BStraits%2BTimes/Story/A1Story20080930-90793.html

    Moving over to the business side, and since you mention Mattel, the melamine crisis once again raises the issue of quality fade in China’s manufacturing sector. When the manufacturer believes that you have invested too much into them, and thus you don’t have good or easy manufacturing alternatives, then some (not all) respond by taking shortcuts and quality fades. Sadly, this view is much too common.

    The link is here. http://knowledge.wharton.upenn.edu/article.cfm?articleid=1776

    The sad thing is that companies relying heavily on China’s manufacturing capacity had plenty of early warning from Mattel, the not-so-flame-retardant children’s pajamas, and the bead toys which had a chemical reaction when mixed with a child’s saliva and turned in GBH (the date rape drug). All these manufacturers should have been monitoring the situation closely and protecting their business by ensuring alternate manufacturing capacity as an incentive for sustaining quality. It would seem that did not happen, or at least not successfully.

  3. Chris

    Interesting. When reading I thought of the ads that British Airways (BA) has been ubiquitously entering into British newspapers and media telling the public that ‘Terminal 5 is working well’ – after the horrendous opening parade where thousands of people lost luggage and suffered delays.

    Do I believe the BA ads now? Absolutely not. I guess it would be the same with Cadbury and other manufacturers.

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