Food fault fraud and the risk to reputation

Fraudulent claims about alleged problems with food are a very real risk to reputation, and social media has made it even easier to create fakes. So how should companies respond to protect the brand?

Supermarket chain Woolworths showed one effective response recently, when a woman posted a photo on their Facebook page complaining about rotten avocados she said she had bought from a Sydney suburban store. However some sharp-eyed folks in the Woolworths social media team recognised the photo from a two year old complaint and responded; “Hey (name redacted), we think you may have taken your photo from another customer’s Facebook post in 2014” along with a link to the original complaint (which earned praise at the time for a prompt offline response).

The story went viral around the world, with customers and social media commentators applauding the company and pouring scorn on the failed scammer.

Contrast this with another case in the same week when a self-described gay pastor in Austin, Texas, told a press conference he would sue over a cake he bought from a Whole Foods Bakery. The cake was ordered with the message “Love wins” but he claimed it was handed to him with the homophobic text “Love win fag.” But within a day the store announced it would counter-sue for $100,000 in damages after releasing in-store security footage said to clearly contradict the pastor’s claim.

We know that most law suits never actually end up in court. But one which did was the notorious case in 2005 when a customer at Wendy’s claimed to have found part of a human finger on a bowl of chilli. The company offered a $50,000 reward, later increased to $100,000, and the owner of the finger came forward and said he had sold it to the complainant’s husband for $100. Wendy’s claimed they lost $21 million in business because of the bogus allegations and the couple were sent to prison for extortion.

And we know that copycat cases are a legitimate concern, as was shown in the famous Pepsi “syringe in the can” hoax in 1993. Within a week there were more than 50 allegations of foreign objects in drink cans, and over a dozen arrests for filing false claims. So what should issue and crisis managers do when facing a potential food fault fraud? Probably a balance between a light-hearted “gotcha” response (like Woolworths) and full scale legal action (like Whole Foods and Wendy’s).

A good example is the case in New Zealand in March 2015 involving a woman in Christchurch who claimed she found a one dollar coin in a single-serve packet of Vegemite. Instead of dismissing it as a likely practical joke by a friend, Australian manufacturer Mondelez undertook a week-long investigation, which concluded it was impossible for the coin to get in during production. They said the coin was too big to get through the filling nozzles; production staff are forbidden to carry personal items such as coins; and metal detectors are used throughout the process.

While the elderly complainant argued that making a judgement solely on photographs was not a proper investigation, the case demonstrates some key response tactics when facing a potential reputation issue – act quickly, take it seriously, investigate it thoroughly and report publicly. And maybe, just maybe, think very hard before calling in the lawyers.


About managingoutcomes

Issue and crisis management expert
This entry was posted in Issue Management, Reputation risk and tagged , , , , , . Bookmark the permalink.

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