Jenny Chan 陳詠欣
Jul 28, 2014

McPR fail: McDonald's HK squanders trust with mishandling of bad-meat crisis

HONG KONG - Like its peers, McDonald's might be seen as a victim in the expired-meat saga that began last week in China. But in Hong Kong, the company violated several rules from the crisis-management playbook and will now have to rebuild its image following a "large withdrawal from the bank of trust", according to PR experts.

McPR fail: McDonald's HK squanders trust with mishandling of bad-meat crisis

The company's mishandling of the situation—first denying any relationship with the embattled supplier at the centre of the controversy before being forced to admit one—angered many customers in Hong Kong. Many vented their frustration via social media. For example, the photo below, which supposedly shows a box from the supplier's Hebei base in a Hong Kong outlet, has been circulated widely. Normally crowded restaurants were visibly quieter over the weekend, according to reports.

"The communications industry learnt years ago that offering no response or a response that’s not complete isn’t good enough, so it’s surprising to see a response like this from such a valued brand in this day and age," said Peter Dimbrowsky, sales director for Hong Kong at iSentia. "It’s important for the brand to monitor and analyse social media as evidence had shown that these incidences often lead to an explosion of online conversations. In the social media world, often, in the absence of clear messages, that void is often filled with rumour and horror stories." 

In the beginning (when the story broke on 20 July), the problem was not isolated to McDonald’s, as the Shanghai supplier, Husi, also provided chicken and beef to major brands including competitor KFC. However, McDonald’s Hong Kong was among the first to deny importing any products from Husi—a claim it soon had to admit was false under pressure following an investigation by a government agency, the Centre for Food Safety.

McDonald’s is "making a large withdrawal from the bank of trust they have with consumers in Hong Kong", said Walter Jennings, managing partner for Greater China at Kreab Gavin Anderson.

The company admitted yesterday that it was getting chicken nuggets, thigh patties, sliced beef, lettuce, corn, lemons, cherry tomatoes, cucumbers and onions from Husi.

"The apology came too late," said Angel Chung, director of Chung & Tang Communications Consultants. "McDonald’s Hong Kong performed a U-turn and issued its first apology for ‘confusion’ only when the health authorities found out the fact. It lost its golden time to contain the issue and to gain public trust. The case became more complicated when McDonald's argued with the health authorities [about] the need to issue a joint statement. The top management made appearance yesterday in a press conference for apology, two days after the Centre for Food Safety launched a probe."

The fast food brand's Hong Kong chain has gotten itself into a "sticky spot" and "urgently needs to wrest back control of the situation", said Leo Wood, senior director at FTI Consulting. "The concern now is that McDonald's does not know where the ingredients for its products are coming from." The horse meat scandal that engulfed European supermarket retailers last year proved that negligence over the supply chain is a huge reputation risk, Wood added.

"McDonald's needs to work to restore trust in its supply chain. It must demonstrate that it completely understands its supply chain," said Wood. As China has a history of food-safety scandals, Wood suggested that the restaurant chin should give serious consideration to commit to origin-labelling on all its food as part of a longer-term campaign.

"It could announce that it is to source all meat products from somewhere where there is a high degree of consumer trust, from free-range American farms, for example. Whatever it does, there must be a renewed commitment to transparency over supplier sourcing,” Wood said.

"In the long term the brand will be fine," Jennings said. "They’re a part of our lives and have been for decades. In the short term they need to prove their products are above reproach. We want to trust our food. We want to trust McDonald’s. Show us the concrete actions you are taking to never serve tainted products.”

Some media training may also be in order. McDonald's HK managing director Randy Lai Wai-sze (黎韋詩)came under criticism at a news conference yesterday (27 July) for refusing to take questions and abruptly departing after reading from a prepared statement that emphasised a "sincere apology". Hong Kong Journalists Association chairwoman Sham Yee-la年(岑倚蘭) said "dodging" followup questions by the media is not a good way to handle an issue.

"A good, clear and honest press conference as early as possible would have been the best response," said Dimbrowsky. "Indeed, staying to answer all questions of the press was also necessary."

McDonald's experience signals a necessary change in mindset for companies operating in Hong Kong, Chung said. "As McDonald’s is a victim of the rotten meat scandal and nobody was found sick in the last few months even though the Hong Kong operation has used the suspicious meat from Shanghai Husi, the company could have avoided this image fiasco if it had been able to admit the problem and apologise at the early stage, before it was found telling lies," she said. "As Hong Kong is getting more politicised, prompt response, bold action and proper account of the case is required before an issue turns into a crisis."


Campaign Asia

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