Premier Foods CEO Gavin Darby (left) has spent an uncomfortable weekend, being castigated by all and sundry – and ‘investigated’ by the UK government – over his company’s demand for ‘invest for growth’ payments from its suppliers.
You may define these more accurately as discounts/backhanders/blackmail payments depending on your point of view as suppliers are delisted if they don’t cough up.
But, as we reported back in September 2013, this is hardly new. Then it emerged that Premier’s creative agencies, which then included JWT and McCann had been asked for payments of around £40,000 each. Media agency Starcom MediaVest resigned Premier’s media account as it had been asked for a mind-boggling £300,000.
Agencies of either ilk are unlikely to attract the same degree of sympathy as a small factory business in the provinces but maybe the UK competition authorities should pay closer attention to what happens in the world of advertising procurement – because it tends to be the testing ground for unethical commercial wheezes on a much wider scale.
And whereas the Federation of Small Businesses and the Institute of Directors have been quick to condemn Premier’s recent actions, the Advertising Association and client body ISBA stayed remarkably schtum when Premier’s unconventional ad arrangements crawled into the daylight.
Darby who, to be fair, is dealing with an over-extended basket case of a company, changed his tune a bit but is still insisting on discounts from suppliers. No doubt we’ll be hearing of other offenders in the days to come.