Smack My Pitch Up

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15 November 2012 - 11:06am | posted by | 2 comments

You cannot polish a turd, but Starbucks, Google and Amazon try to sprinkle PR gold on tax avoidance claims

Starbucks' chief financial officer Troy Alstead faces MPsStarbucks' chief financial officer Troy Alstead faces MPs

Something rather magical happened this week, something that rarely happens in this world; three rather large, rather powerful, tough American brands faced scrutiny over their tax arrangements OUTSIDE of the USA.

That is right, Amazon, Google and Starbucks were taken to task by a UK parliamentary committee and all three were made to look rather silly.

Now, from a PR point of view you would have thought that the three companies would have been briefed to the eyeballs on what to expect. There are so many videos on YouTube of CEOs and the like being made to look stupid at these things that research should have been easy.

I have sat in on one such committee when I worked for a utility company. They are very much about politicians posturing and firing out soundbites, kinda like a more serious version of Watchdog.

There is always the Anne Robinson type, making snidey, usually inaccurate, claims about the company or person being grilled and then promising that serious action will be taken, which eventually gets watered down to slapped wrists and serious head shaking.

Anyway, this week was the turn of Amazon, Google and Starbucks to face our elected leaders and boy oh boy did it go wrong.

Amazon got sent home and told to return once it had found its PE Kit (PE kit meaning done its homework); Google basically said us Europeans were a bit silly and that everything was driven from the mothership that is the USA; and Starbucks snitched up the Government of Netherlands as being a bit sneaky when it comes to tax.

The Netherlands situation got so bad that it was eventually agreed that everyone best shush up about it because the tax agreement in place was, it turns out, a secret! Shush now.

These are probably three of the biggest global brands with three of biggest public relations and lobbying teams in the world. How did they get it so wrong? Well, it seems to me that they thought they could swagger in, show off their million-dollar-amazing-looking-teeth (dont be jel, be ream!) and just win everyone over, with no prior planning at all.

Not us Brits though, and especially when a politician can spot an opportunity to be seen to actually be doing something that us ordinary people feel so strongly about. The three amigos were ripped apart.

Starbucks, Google and Amazon now face an even worse PR situation. They are being backed into a corner, largely by their own poor PR planning, where they will face no option other than to make concessions and pay more tax.

The final nail in their collective coffins is surely the fact that John Lewis, largely thought to be the nicest, most loveable UK brand - think bouncy Labrador – is now coming out and attacking those terrible American folk. John Lewis attacking someone? What is the world coming to?

For now, for once, it’s UK 1, America 0.

Along with writing a weekly corporate PR column for The Drum, Andy Barr runs the PR agency 10 Yetis


16 Nov 2012 - 00:50
toler54244's picture

The misreporting by the media on some of this and posturing of the politicians (esp. the badly-drawn Anne Robinson, Margaret Hodge) is damaging to business and therefore, the economy. There will be some compensation as some people will switch to other brands etc, but the net impact will be a reduction in economic activity, there will be less spent with UK suppliers, less spent with UK landlords, less income going into employees' pockets, more empty shops on the high street, fewer apprenticeships, lower returns for pension funds that invest in these stocks, and therefore lower pensions for the ordinary people that have invested with them. What is happening is economically damaging, and will have long term negative impact on the UK as it is increasingly seen as a hostile place to do business, and everyone will suffer. If you're so furious, change the tax law, but be prepared for lower inward investment and higher unemployment. Good work, media. Nice job.

16 Nov 2012 - 15:45
james17984's picture

No, the tax avoidance is bad for the economy.


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