26 September 2013

Plots and plants that fascinate the milk powder industry


About a month ago, one of the many scurrilous gossip-mongering websites that pretends to be posting news published a story about a conspiracy.  The claim was that there was a conspiracy to attack the milk powder brand Anchor in order to better position another brand in the market. That conspiracy or ‘plot’, it was claimed, was masterminded by Namal Rajapaksa, with the prominent stock market investor Dilith Jayaweera and this writer (among others) being part of the implementing team.  Big claims, zero substantiation. 

One thing was clear: whoever runs the website doesn’t have a pulse on the media, for the issue was first raised by The Nation way back in March 2013.  The Nation named Fonterra and its most prominent brands.  It took the rest of the media at least 4 months to consider the issue ‘newsworthy’. 

But that was a website run by nameless people and one that is yet to get to A in the alphabet of media ethics.  On September 12, a daily English newspaper announced, ‘Plot Exposed’, with a say-it-all over-line, ‘A small milk supplying company attempts to create fear psychosis among public’.  The author: ‘A Special Correspondent’.   Now anyone who knows anything about public relations will immediately think ‘plant’. 

The plot-claim is basically one of false advertising which ‘cast doubts (about) competitors while misleading the public about the safety of Fonterra, Maliban and Nestle brands’.  The ‘small’ brand, owned by a famous supermarket chain, is said to own just 8% of the market.  A ‘leading media network’ apparently had rejected one such advertisement, on the grounds that it violated media ethics.  The correspondent cites a Health Ministry notice on labeling and advertising: ‘No person should label, package, sell or advertise in a manner which misleads, creates a wrong impression or contains false information about the nature, standard, consistency and quality of a certain food item’.
The media network is not named in the article.
On the morning of Saturday, September 14, 2013, MTV unveiled a hoarding promoting ‘News 1st’.  The screaming claim was, ‘The plot that failed’.  The tagline, ‘Stock Market Mafia enters “Milk Industry”.’

A clever PR campaign, then? 

All this follows a raging controversy over contaminated milk powder and vexed questions regarding regulations, implementation of regulations, adequacy or otherwise of testing facilities, inexplicable behavior on the part of informal (dis)approving entities such as the Nutrition Society of Sri Lanka and questionable solicitation of sponsorship and agreement on the same involving Fonterra and the Sri Lanka College of Paediatricians.  

What’s MTV’s beef?  Theoretically, it can be argued that the similarity of ad lines is coincidence.  It could be just that MTV was self-righteously acting in the larger public interest, convinced perhaps that there was no contamination in Fonterra brands and oblivious to behavior which, though legal, is at best mischievous. 

Then again, it could have been inspired by nostalgic attachment to the flagship Fonterra brand, Anchor, which MTV’s parent company, Maharaja, introduced to Sri Lanka.  Coincidentally, again, that venture followed a similar contamination scandal in the aftermath of the Chernobyl disaster.   


Anchor’s entry followed a concerted campaign against Nespray and Lakspray spearheaded by Ravaya which included numerous articles on the subject as well as ‘ads’ parodying the payoff lines of these brands.  The Anchor line when the ads began to appear, interestingly, was ‘From New Zealand only’, clearly playing off the legitimate fear of contamination in products originating in Europe. Perhaps Maliban has taken a leaf off Fonterra’s book with the ‘Only from Australia’ strategy.

Victor Ivan, then Editor of Ravaya told The Nation that a spoof of the Nespray ad was used because it was felt that this was the best way to warn/convince the public, especially since many countries had stopped milk powder imports from European countries.  According to Ivan, this was not a ‘planted’ campaign, with even the testing being done free by a Tokyo University professor, who promised to visit Sri Lanka and testify if a case was filed against the paper.

‘Using taglines such as “From New Zealand only” and “From Australia only” could be unethical,’ Ivan said, noting that after the Ravaya revelation, Fonterra used the controversy to increase its market share.

Leon Clement, Managing Director, Fonterra Brands Lanka, told The Nation that he hadn’t seen the ‘Plot Exposed’ story and did not want to comment on a matter about two other institutions.  He diplomatically declined to comment when asked whether local milk producers were indulging in scaremongering, ‘You can come to your own conclusions’.  Unlike Ivan, Clement said there was nothing unethical about Maliban using ‘Product of Australia’, since it was not directly casting aspersions on rival brands.    

He said that Fonterra takes food safety issues seriously:

‘When DCD was found in milk products sold in some countries, Fonterra removed those products from the market. However, now it has been found that DCD is not a food issue. Sri Lanka is the only country that keeps on insisting that DCD poses a threat to food safety. Only some New Zealand dairy farmers used DCD. Now even they do not use it.’

He claimed further, that Fonterra was ethical in its marketing.  Fonterra, though, is clearly walking on the edge in the ethics of advertising, as evidenced by clever sponsorship of events (see The Nation of September 8, 2013) and doesn’t come off looking squeaky-clean in the eyes of the alert consumer when it plants representatives even in informal approving bodies such as the Nutrition Society.  It is certainly legal and there’s nothing wrong in a corporate ‘covering bases’; in this instance it is the Nutrition Society that has to answer the tough questions (which, by the way, it consistently refuses to do). 

There is no evidence (so far) that Fonterra (or MTV) is part of a ‘plot’ or rather counter-plot to the claimed plot, even though the coincidences raise the eyebrows of even the most gullible.  What is strange is that the aforementioned ‘special correspondence’ seems to have totally missed out on Fonterra’s culpability in violating the said Health Ministry notice on labeling and advertising.  The Nation, on April 28, 2013, delved into the issue of exaggerated claims and scaremongering in a story titled ‘Anlene’s Calcium myth’ (Anlene is a Fonterra brand).  The advertisements for its infant formula brands are classics of exaggerated claims.  These do not tread on competitors’ toes, true, but they do warrant ethics query.  For the record, Fonterra did not respond to this story. 

Throughout the process (and it is far from over) there were many who cried that if Fonterra were to pull out, it would be hard to meet the demand.  Dire warnings were posted in social media sites such as Facebook, warning that such an eventuality would result in dampening investor confidence.  Babies would starve, some said.  Some of the objectors did not reveal at the outset that they had in fact serviced Fonterra brands. These are not important matters, though. 

What is important is that this country has better regulatory systems in face.  If food security is part of national security, then self-reliance cannot be pooh-poohed.  A better idea of overall demand has to be obtained, considering that demand can be inflated (Sri Lanka’s per capita consumption of powdered milk is a regional high).  There should be systems to ensure that loopholes are eliminated.  Relevant organizations should have clear, unambiguous guidelines for sponsorship that don’t leave question marks regarding integrity and which inspire and not dull consumer confidence.  Human resource problems should be addressed and resolved.  The consumer has to be alert. All the time.  All this is good for the consumer and good for the corporates, at least in the long run. 

As things stand, whatever assurances that officials may give about Fonterra brands, poor communication and other errors did nothing to make the consumer believe Fonterra. 

Finally, here’s something that policy makers, regulators, distributors, advertisers, media networks, purveyors of gossip labeled ‘news’ and the general public would do well to reflect on.  Neither during nor after the whole Fonterra contamination issue did we see even an inkling of concern about a milk powder shortage. 

It looks like true supply is matching true demand.  And there’s no plot there.  No plant either. 


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