Exporters Having Problems in the United Kingdom - Case Study Example

Appendix: Cases of Exporters Having Problems in the United Kingdom Case Pressure from Environmental Groups A November 11, 2005 report released by the Friends of the Earth, a UK-based environmental protection group, revealed that a major supermarket chain, Tesco, was importing the vast majority of its apples at the height of the UK apple season. More than two-thirds of apples on supermarket shelves were sourced overseas from different suppliers, and some apples traveled over 20,000 kilometers to reach UK stores. Friends of the Earth said that the importation of apples was driving independent stores out of business, reducing the potential outlets for UK suppliers, and contributing to climate change. They also called on the Government to take action to set up an independent supermarket watchdog to protect both consumer and producer interests. Analysis: This was one proof of how environmental groups apply pressure on exporters through large UK companies. They cite that if another supermarket chain, Sainsbury's, can do it (that is, sell apples sourced from Britain), then Tesco should be able to do it. Tesco denied the claim and promised in 2003 that it would not import apples from August through February from any Southern Hemisphere country, notably New Zealand, Chile, and South Africa. Source: Friends of the Earth. (2005) Tesco comes bottom of the class for apple sourcing. November 11, 2005. [online] Available from: [November 24, 2005] Case 2: Problems with Food Labeling An article in the Wall Street Journal mentions the case of Haagen-Dazs chocolate-covered ice-cream bar. The label does not mention any genetically modified ingredients listed there, but consumers who question the company about it are sent a letter stating that the bar's chocolate coatings, in fact, contain soya oil that "may have been derived from genetically modified soya, but it is identical to any other soya oil and therefore does not contain any genetically modified material." The letter adds, "We are, however, investigating whether there are suitable alternative oils." In another case, AstraZeneca was forced to take off the market a bioengineered tomato puree. Despite outselling other popular and more expensive brands, the genetically modified food controversy affected its sales negatively until the company, AstraZeneca, had to pull out the product from the supermarket chain J. Sainsbury PLC. Analysis: This case illustrates the paranoia in the UK about genetically-modified foods, even though there's no proof that bioengineered foods pose any health risks. As Haagen-Dazs did, the best way to address the problem is to be forthright in admitting the scientific fact that genetically modified soya is identical to any other soya. It can be funny, but it's true, that there is not much difference, scientifically, between soya that is modified through naturally occuring genetics and one that is genetically modified in the laboratory. In the case of the tomato puree, a successful product, despite being labeled genetically engineered and proven to be a good one, suffered. This could have been avoided if the company came up with a more forthright communication plan to show that genetically modified tomato puree was, as Haagen-Dazs did with soya, better than any other tomato puree. Source: Stecklow, S. (1999). Attempt at Clarity in Food Labeling Prompts Much Confusion in the U.K. October 26, 1999. Wall Street Journal. New York. [online] Available from: http://www.junkscience.com/oct99/stecklow.htm [November 24, 2005] Case 3: Terrorist threat to foreign companies and Knowing the Best Location for your office John Smith, head of group security at Prudential, an American financial institution, underlines the potential risks companies face in the United Kingdom. A veteran of anti-terrorist activities against the Irish Republican Army, Smith suggested that it would be prudent to "plan on the timescales and geographic impact of a disaster like Chernobyl. Successful chemical, biological or radiological attacks may deny access to large segments of cities for significant periods.". Roger Davies, a former UK military counter-terrorism officer argues explosives remain the most likely weapon used by al-Qaeda. He says that cities should be able to cope with simultaneous truck bombs detonated without warning. Companies within 400 metres of an American, British or Israeli embassy should especially review their crisis plans. Prudential has reviewed its crisis plans in the event of a terrorist attack. Analysis: This is an example of how companies doing business in the United Kingdom should plan for their offices and warehouses, reviewing their crisis and security plans. The crisis plan to be drafted will differ if your office is located close to a potential terrorist target (like the embassies of the countries in the 2003 Iraqi coalition forces) or to a site that is heavily trafficked and is, therefore, a likely target for a suicide bomber. Source: George, B. (2002) Firms 'unprepared on terror threat'. November 26, 2002. London: BBC. [online]. Available from: http://news.bbc.co.uk/1/hi/uk_politics/2513083.stm [November 24, 2005] Case 4: Animal Rights Activists Animal rights activists Bite Back planted a bomb that exploded under the car of Canaccord director Michael Kendall on May 19, 2005, nearly killing him. As a result, Canaccord Capital, a Canadian investment company, quit as the broker for biotech company Phytopharm. Phytopharm is connected with Huntingdon Life Sciences (HLS), a British research firm, which moved its headquarters to the United States in 2001 after undergoing attacks from animal rights activists. Phytopharm CFO Wang Chong said that aside from taking the necessary precautions, they are asking the Government authorities to help safeguard the safety of their employees. Three other large foreign drug companies are planning to move out of Britain due to threats from similar-minded activists. In 2004, bottled gas company BOC, a supplier of HLS, quit after receiving death threats. Analysis: This example shows how extremes the Animal Rights Extremists (ARE) in Britain can get, threatening human lives in exchange for protection of animals. They have succeeded in driving out biotech firms from Britain, resulting in unemployment and lost investment opportunities. With the withdrawal of a Canadian investment broker, it is possible that foreign funding for a British biotech firm will drive, resulting in the unemployment of scientists doing research in neurolodegeneration and obesity diseases. Source: BBC News (2005) Animal-rights blow for drugs firm. June 23, 2005. London: BBC. [online] Available from: http://www.animalliberationpressoffice.org/media_coverage/2005-06-24_phytopharm_shares_tank_bbc.html> [November 24, 2005] Read More