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Findus pays price for cutting costs on PR

Financially stricken companies will inevitably slash costs in 'non-core' areas.

Alec Mattinson:

Alec Mattinson: "Findus dispensed with its entire senior UK comms team in 2011. It is now feeling the effects of that decision."

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In the past this has often meant gutting in-house comms teams as struggling companies see little need for the supposedly nebulous benefits of PR. Findus is proving to be a compelling counterpoint to that.

Amid breaking its banking covenants and racking up huge annual losses, the company dispensed with its entire senior UK comms team in 2011. It is now feeling the effects of that decision.

The disaster afflicting the private equity-backed frozen food firm is not of PR’s making. But a company with corporate reputation in its DNA would surely have had a better chance of limiting the damage.

The differences in the crisis response of Findus and Tesco look stark. Tesco has been largely praised for its proactive response, which saw the company take responsibility and apologise in newspaper adverts, TV interviews and even the CEO’s personal blog.

Findus, in contrast, gives the impression of being overtaken by events – from its initial statement last week identifying mere ‘labelling issues’ to its tardiness in informing the public in the first place.

Treating PR as an optional add-on may initially look good on the balance sheet – but Findus’ owners may find the long-term damage to the brand extends beyond a few bad headlines.

Tesco and Findus have become the face of the crisis, but its impact is likely to reach far wider.

Reports continue to circulate about the possible presence of veterinary drug ‘bute’ in beef products that contain horsemeat. While the saga has revolved around horsemeat and mis-labelling, it would surprise no-one if the story now morphs into one of public health and food safety.

The horsemeat scandal clearly calls into question the integrity of the food chain – and thus far neither Defra nor the Food Standards Agency has appeared overly keen to own the issue and lead efforts to inform and reassure the public.

The FSA has concentrated on process and testing issues, but surely an organisation with food safety as its USP needs to be on the front foot and providing exhaustive information to a public no longer even able to trust a simple list of ingredients?

The issues involved are far-reaching, complex and crucial details remain undiscovered. Reacting in haste is a sin in itself, but some participants have allowed the impression to build that they lack urgency in dealing with the crisis – the public has a right to expect better.

Read the latest news on Findus' comms crisis handling, including video of major shareholder, Lion Capital chief executive Lyndon Lea, saying that the company had ignored his advice on tackling the crisis proactively, in an exclusive interview with Sky News.

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