Ethical Issues – Bernard Matthews - Marketing Essay Example
Ethical Issues – Bernard Matthews
Bernard Matthews Foods Ltd - Ethical Issues – Bernard Matthews introduction. is a well-known brand in the pre-packed cooked meats market, chiefly turkey, and has been steadily developing the range over a number of years. The company was started by Bernard Matthews in 1950, with 12 turkey eggs and an incubator in Norfolk, UK. By the late 1960s, more than 1 million turkeys were farmed annualy. About 80 per cent of all cooked meats in the UK are produced by the group and it accounts for about 30 per cent of whole turkeys sold at Christmas (Wiggins 2007).
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However, in the recent years the company has been involved in many high profile controversies, some of which are seriously damaging the company’s reputation and hence the market share and even business. Many of these things are related to issues like animal cruelty, unheathy food and most recently the ‘Avian flu’ break out. Laying out its employees to counter the effects of the losses due to bird flu, isn’t hepling the image either. All these issues make are making the consumers question the ethical values of the company that markets itself as a producer of “healthy, high quality turkeys” (British Poultry Council 2007
Exploring each of these issues in detail, the first problem that occurred was in the year 2000, when environmental activists Greenpeace delivered three tons of GM-free turkey feed to the Bernard Matthews headquarters to disprove the company’s statement that it was impossible to buy GM-free animal feed. The company tackled this problem within a year declared that – all the turkeys it farms every year were fed a “strictly vegetarian diet of non-GM crops” from the company’s own feed-mill (British Poultry Council 2007).
A more serious problem cropped up in the year 2005 when the company was accused of selling unhealthy food. One of its products – Turkey Twizzlers – was accused of containing outrageously unhealthy levels of saturated fat. To respond to this, first, the company tried different variation of the product, but later dropped it entirely, a move that coincided with a £13m drop in operating profits. While the company managed to save its reputation, there was trouble on the business front (British Poultry Council 2007).
The company again was again embroiled in another controversy, when two of its employees, were convicted of animal cruelty after being filmed playing “baseball” with live turkeys. The company’s damage control unit responded to this issue by dismissing the two employees and taking out advertisements telling shoppers: “Our employees do not abuse turkeys.” (British Poultry Council 2007).
This marked the start of an outrage against the company by consumers, who suppressed fear regarding the issue of cruelty. A television program had broadcast a video showing turkeys packed into overcrowded, darkened sheds in one of the company’s units. Some of these birds were shown to be injured and dying. The firm had retorted to this issue by stating that the videos were taking after panicking the birds. The company further stated that the conditions in its farms and plants are better than all other poultry operations, and extended an invitation to authorities to visit the sheds at any time, with no prior notice (British Poultry Council 2007).
The company is now facing the biggest trouble in January 2007, when the occurrence of Avian flu in the turkeys in England was reported at one of Bernard Matthew’s farms in Holton. Though the cause of the outbreak has not been determined, a highly critical report from DEFRA says that there was a series of bio-security failures at the Holton plant, and also that the birds were found to be imported from a place in Hungary where the bird flu has been detected. This has resulted in a sharp fall in the sales of the company and many workers being laid off, which is further being severely criticized (British Poultry Council 2007).
Suggestions – To improve its brand image, the company should first start a series of community welfare activities, showing the company to be a part of the societies. The lay off figures should be either controlled, or help should be provided at least ostensibly to provide help to the employees to resettle into new jobs. Further, the hygiene levels of the company should be brought up to standards, with a strict inspection procedure. The PR and advertising should simultaneously be done to promote and strengthen the image of th brand. Further, the company should start giving a health index or something similar in the products they sell to rest the consumer’s minds.
Bernard Mathews Market
Bernard Matthews is a global organization, with an annual turnover of about £400 million, and produces around 13 million turkeys annually, 7 million of which are for the domestic market of UK alone. The company employs more than 6,800 people worldwide, with over 4,000 of them in UK (www.bernardmatthews.com).
Ten years after its start-up, the Bernard Matthews Company had become the biggest, most successful turkey manufacturer in Europe, a record the company still holds today.
The company still has its headquarters at Norfolk and the production is concentrated in East Anglia, but its business activities stretch across Europe and many other countries worldwide. Bernard Matthews started expanding internationally by the early 1990s. First of all, the company bought Hungary’s leading poultry producer, Sárvár, in 1993, and New Zealand lamb processor Advanced Foods in 1994. In 1996, it took over Germany’s Bernhard Bartsch, which specialised in cooked meats, to help it expand in Europe, and a year later it opened offices in the Czech Republic, Poland and Slovakia (Wiggins 2007)
The company was floated on the stock exchange in 1971 and after almost 30 years in 2001, the company reverted to being a limited company with ownership returning to the Matthews family (www.bernardmatthews.com).
Bernard Matthews in UK
For the first 30 years the company’s main activity was the production and sale of whole oven-ready turkeys. However over the past 20 years, the company’s UK branch has been innovating newer and more creative range of products. During mid to late 90’s, the UK division was very successful in launching cooked meats, fresh turkey cuts and fresh added value poultry. In the last couple of years the company has further forayed into microwavable snacks, sandwiches and pastry products (www.bernardmatthews.com).
Bernard Matthews in Hungary
In 1996 Bernard Matthews joined two Hungarian companies, Sárvár and SáGa, to create SáGa Foods. Under the brand of The Saga Foods, the company has a very large turkey complex, the Sarkov plant in Hungary.
Bernard Matthews in New Zealand
The strategic focus of the New Zealand division of Bernard Matthews is on the branded lamb cuts in chilled and frozen form. The product emphasis is on guaranteed tenderness, portion control and fixed weight products for both the retail and food service sectors. The primary market focus of this division is the United Kingdom, with a significant volume of product being positioned directly into the retail sector.
Another market being focused in Europe is France, with a high percentage of chilled products being shipped on a year round basis. The USA is also a key market with emphasis being on high value food service cuts. In total, the United Kingdom, France and USA markets account for just over two thirds of the total Bernard Matthews New Zealand production (http://www.bernardmatthews.co.nz/about.htm)
The purpose of international marketing is either to find newer marketplaces or to outsource to a cheaper place which would be nearer to a potentially big market. Bernard Matthews has gone to the second choice. To prevent the market share loss, the company believed that investments were needed in a country with lower production costs, which led it to open saga in 1998. However, since the company as opened a different brand name, this is also used to export to the domestic market in European Union.
While England is still its biggest meat producing unit, the company has invested in Hungary and New Zealand. The same theory led the company to invest in other places like Slovakia etc (Sluis n.d)
Sluis W, n.d., “European Processing Com”, Article retrieved on 9th May 2007
British Poultry Council, 2007, Article retrieved on 9th May 2007
Wiggins J, 2005, “Bernard Matthews tightens its tweed belt”, Article retrieved on 9th
May 2007, http://www.ft.com/cms/s/6bd22700-b4bd-11db-b707-0000779e2340,dwp_uuid=c47ab278-4d1c-11da-ba44-0000779e2340.html