Sometimes the company at the center of a crisis follows the conventional textbook response, yet external forces drive the situation completely out of control.
Two years ago this month, Australia was gripped by a food contamination panic which triggered political outrage and a national health scare which brought the company to its knees. Only now have the real lessons become fully evident.
In January and early February 2015, multiple cases of Hepatitis A across Australia led health authorities to link the illness to packets of Nanna’s Frozen Mixed Berries, which were grown in Chile and China and processed in China. Cases linked to the allegedly contaminated fruit eventually totalled 31, and produced national headlines questioning the safety of imported food and the adequacy of product labelling. These issues were effectively outside the scope of conventional crisis response, yet left the company struggling to gain influence.
The crisis began when Victorian authorities said two samples of frozen berries had proved positive for Hepatitis A, and that evidence for the association between the berries and the outbreak was very strong.
For its part, brand owner Patties Foods emphasised there was no proven direct link between its berries and individual cases of infection, but they were “guided by the epidemiology” and immediately ordered a voluntary, precautionary recall. Predictably the word “precautionary” was quickly lost in the blizzard of publicity. As one headline blared: “Hep A scare: Buy local to avoid virus-laced berries.”
Shares in Patties Foods fell by almost 8% in a day, and CEO Steven Chaur launched a conventional crisis response. He announced the company was sending samples overseas to specialist testing laboratories (which eventual proved negative, but by then it was too late); he detailed the company’s testing regime (which he said met and exceeded all required standards); and he terminated the contract with the Chinese processing plant. But no amount of “key messages” could have slowed the crisis. Indeed, one newspaper commented that the brands were “trapped in the chute of a PR disaster … and falling.”
Add to this a very poor public understanding of the risk posed by Hepatitis A. Health experts agree that Hepatitis A is usually not life-threatening and most people recover quickly. However it is frequently confused with Hepatitis B and C, major illnesses which can lead to death from liver cirrhosis and liver cancer. Naturally, none of the misperceived health risk aspect was within the capacity of Patties Foods to influence, though it undoubtedly raised the intensity of the crisis.
Also largely outside the company’s influence was how the crisis was “hi-jacked” to drive a separate political/industry agenda. Australian food producers used the panic to urge consumers to buy local, while the Government promptly pledged to strengthen country-of-origin labelling regulations, despite the suspect berries being clearly marked “Product of China.”
After reporting an 88% drop in profits, Patties Foods sold off the frozen berry business, and in late 2016 the remaining core business of pies and other bakery goods was sold to a private equity company.
For a food producer there could be no more obvious crisis risk than a contamination scare, and Patties Foods should have been better prepared. But given the circumstances of the case, it may be that nothing Patties Foods said or did would make a difference. Looking back, CEO Steven Chaur described the crisis as a case of “guilty until proven innocent.” In reality it was more a case where guilt or innocence didn’t stand a chance in the face of epidemiology, opportunistic politicians, and a relentless news media.
Adapted from an article in Crisis Response Journal.