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Maccas Tecoma stoush could slime brand, expert tells global HQ

Paul Rogers, a leading social responsibility expert, has warned McDonald’s that its ongoing dispute with protesters over a planned restaurant in Melbourne’s eastern suburbs could irreparably damage the brand.

A leading corporate social responsibility expert has written to McDonald’s US board and management alerting them to millions of dollars in brand damage stemming from the now-infamous Tecoma dispute, which went global over the weekend.

In a letter sent by environmental, social and corporate governance sage Paul Rogers to McDonald’s global directors and senior executives and obtained by Crikey, the fast food conglomerate is taken to task for pressing ahead with its plans for a 24-hour restaurant in Melbourne’s leafy east despite ongoing protests and petition action.

Protesters have flown to Chicago to brief senior executives about the dispute, which could turn into another McLibel after international media coverage in the Chicago Tribune and the local NBC station. The protesters will attempt to present a 100,000-strong petition to the company, run out of the exurb of Oak Brook, on Wednesday.

Rogers served for eight years as an ESG consultant at prominent advisory firm Regnan, coaching big ASX-200 firms on social engagement. He says the main risk for directors and shareholders is damage to the brand, with the Tecoma campaign picking up support from world-famous celebrities, including Jamie Oliver. Rogers wrote:

Hopefully, McDonald’s global leadership team will demonstrate good corporate responsibility and risk management, and will arrange for senior management in Chicago to meet with the Australian delegation to discuss the case and receive the petition.  I strongly encourage you to address this issue and repair the significant damage to the company’s brand that the senior management of McDonald’s Australia is inflicting.

Up until now, most Australians have viewed McDonald’s positively, and affectionately refer to your company as ‘Maccas’. I doubt very much that you or your shareholders would want to see the company’s reputation trashed by a single development. “

In 2004, San Francisco passed a law banning “formula retail” stores in some locations, and Rogers says McDonald’s will face more regulatory risk if community campaigns like Tecoma continue to cut through. He says meaningful community consultation in Australia over the plan was next to non-existent.

The high-level strategy represents the opening of a new front in the grassroots war against the burger giant, which also included an ad in the Tribune and this week the inflation of plastic kangaroos out the front of a downtown Chicago Hard Rock Cafe. Crikey revealed the looming Stateside assault on August 20.

McDonald’s board contains a bevy of corporate luminaries, including senior Nike executive Jeanne Jackson, Abbott Laboratories CEO Miles White and Levi Strauss director and Mattel CEO Robert Eckert. Crucially, 11 out of the 13 board members are independent. The company is chaired by Illinois society figure Andrew McKenna. Its CEO and president is Donald Thompson.

Rogers says he will establish contact with local top three McDonald’s institutional shareholders: Vanguard Group, State Street Corporation and BlackRock Institutional Trust Company. Rogers says the operation in Australia is a crucial arm for the firm, despite being responsible for a fraction of its annual profits approaching $US6 billion.

In addition to the financial impost, a secondary longer-term risk would be future government regulation from activists emboldened to lobby governments over inappropriate developments in their backyards. “A short-term investor might not be as concerned about the issue but an institutional investor would be,” he told Crikey. “They’ve got a good reputation in Australia but seem intent on undermining those years of goodwill.”

Rogers is a Brisbane-based research fellow in the Centre for Social Responsibility in Mining at the University of Queensland and has produced his analysis in a personal capacity. He is a former resident of Upwey and continues to own property in the area.

Meanwhile, McDonald’s Australia has quietly dropped its damages claim against the so-called “Tecoma Eight” protesters. Victorian Supreme Court Judge Emilios Kyrou will hand down a finding on Friday as to whether the group is “representative” of other protesters at the site accused of “trespass” or creating a “nuisance”. An injunction continues to be in place banning access to the construction zone.

McDonald’s global HQ did not respond to a series of questions by Crikey’s deadline.

10
  • 1
    zut alors
    Posted Monday, 16 September 2013 at 2:10 pm | Permalink

    One would expect a multi-national company to employ savvy executives capable of making a prudent judgement in the Tecoma case.

    What’s Maccas’ global annual budget for publicity and PR exercises? Compare that with the drop-in-the-ocean revenue they gain with one more outlet in Victoria.

  • 2
    Salamander
    Posted Monday, 16 September 2013 at 3:31 pm | Permalink

    For them it would be the precedent, wouldn’t it? Thin end of the wedge.

  • 3
    Ian
    Posted Monday, 16 September 2013 at 6:50 pm | Permalink

    I have never been to McDonalds since the day, Many years ago, that I heard about the McLibel case. I hope many others do the same as a response to this episode.

    These huge corporations need to realize that they are dispensable.

    On another tack; this is not the best time for Macca’s to attract adverse news coverage in the US. They are in the midst of rolling industrial actions by workers of the fast food chains there.

  • 4
    dazza
    Posted Monday, 16 September 2013 at 7:09 pm | Permalink

    Why do rate payers have to defend their local council’s inability to read their own planning schemes?

  • 5
    AR
    Posted Monday, 16 September 2013 at 7:09 pm | Permalink

    Given the stunning success of the McLibel case, it raises the question too infrequently put to the powerful - how come, unlike the higher mammals, you don’t seem to learn from experience?
    To reverse the old put down, “if’n yer so rich, how come you ain’t smart?”

  • 6
    Liamj
    Posted Tuesday, 17 September 2013 at 7:20 am | Permalink

    The ‘positive image’ of McDs is shameful, it seems like we’re grateful for obesity. Maybe that’ll finally change once zero-hour contracts, as forced on 90% of UK staff, become commonplace here.

  • 7
    michael crook
    Posted Tuesday, 17 September 2013 at 8:44 am | Permalink

    HI Guys, read the Deloitte Access economics report for the Butterfly Foundation to realise just what a problem unhealthy food choices, such as McDonalds, and especially Coca cola, have created. Here in Sandgate, we are also opposing a new McDonalds, but with less community support, this is Queensland after all, our task is made more difficult by Mcdonalds cynical support for the local Police Youth Club, school P and Cs and Junior Sport. The fact that the two local councillors work on McHappy day, is also a problem as one of them is chairperson of the council department assessing the application. At the “community information” session, McDonalds executives advised that they want a McDonalds within 3 minutes drive of everyone in every Australian city. Horrifying isn’t it. If they succeed we will try and organise a boycott and feel that the Tecoma example will stand us in very good stead.

  • 8
    K A
    Posted Tuesday, 17 September 2013 at 5:23 pm | Permalink

    This case sets the example for communities around the world. McColonisation of the world must be regulated or the insatiable appetite of this greedy corporation will truly take over every last special place in the world. Ubud in Bali has its own battle with a McDonald’s development in progress. Is no where safe from the corporate bully who has zero respect for the environment and communities?

  • 9
    klewso
    Posted Tuesday, 17 September 2013 at 8:54 pm | Permalink

    What’s one less eye-sore to the greedy behemoth?
    There’s nothing Noble about the way this is being played.

  • 10
    klewso
    Posted Tuesday, 17 September 2013 at 9:05 pm | Permalink

    But Michael - after these dietary deficients affect your health, some are enlarged heart enough to plough a small amount of those profits (thus generated) back in to help you get better, after a fashion?
    They will keep the rest of those profits of course.
    Sort of “Profit from Profanity”?

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