Damage control
When the news broke that employees at Constar - owned by American meat giant Smithfield Foods Inc.'s Polish subsidiary Animex - were "refreshing" old meat by scraping mold off sausages and sending them back to retailers, it horrified consumers. In the scandal's wake, Constar's director has been suspended, as has all production at the plant until further notice.
Government food inspectors are conducting an investigation, and the EU may decide to take action. Officials at Animex are already admitting that the company is in a "crisis situation." Now Smithfield, whose global strategy hinges on success in Central and Eastern Europe (CEE), has sent in a team of executives to take charge of the situation.
"Obviously, we take this very, very seriously - and the fact that we're here ought to tell you that," says Dennis H. Treacy, Smithfield's vice president for environmental, community and government affairs, and the leader of the damage-control crew.
Virginia-based Smithfield, which processes 20 million hogs annually, has been bent on expansion in CEE since 1999, when it acquired Animex and all its brands, including the famous Krakus. Last year, it acquired Morliny, giving the company Poland's two most-recognized meat brands. It also boasts two subsidiaries in Romania.
But the group's reputation in the region is now under fire. The Constar scandal is just the latest in a series to rock the group's activities in Poland. Earlier this year, some 24 farmers blocked the entrance to one of Smithfield's contractor's plants for almost two months, accusing the company of conducting unfair business practices by raising thousands of hogs in crowded conditions. Last year, in northwestern Poland, pig waste from a local Smithfield-owned factory found its way into a lake, browning the water, and allegedly causing eye and skin infections in local children.
"We do have a problem with that and it doesn't mean that we're going to throw up our hands and leave," says Treacy. Understandably so - last year, Animex recorded sales of $410 (zł.1,314) million and sales of Krakus products in the US alone netted Smithfield $35 (zł.112) million. Morliny records annual sales of more than EUR 77.8 (zł.326) million.
"We are making very much of an effort to improve our communication with local communities, to improve our communication with the citizens of Poland in a manner that we hope will result in them recognizing that we are a good company who is out for the good of Poland and not some sort of a threat to them," says Treacy.
They may be fighting an uphill battle.
Government food inspectors are conducting an investigation, and the EU may decide to take action. Officials at Animex are already admitting that the company is in a "crisis situation." Now Smithfield, whose global strategy hinges on success in Central and Eastern Europe (CEE), has sent in a team of executives to take charge of the situation.
"Obviously, we take this very, very seriously - and the fact that we're here ought to tell you that," says Dennis H. Treacy, Smithfield's vice president for environmental, community and government affairs, and the leader of the damage-control crew.
Virginia-based Smithfield, which processes 20 million hogs annually, has been bent on expansion in CEE since 1999, when it acquired Animex and all its brands, including the famous Krakus. Last year, it acquired Morliny, giving the company Poland's two most-recognized meat brands. It also boasts two subsidiaries in Romania.
But the group's reputation in the region is now under fire. The Constar scandal is just the latest in a series to rock the group's activities in Poland. Earlier this year, some 24 farmers blocked the entrance to one of Smithfield's contractor's plants for almost two months, accusing the company of conducting unfair business practices by raising thousands of hogs in crowded conditions. Last year, in northwestern Poland, pig waste from a local Smithfield-owned factory found its way into a lake, browning the water, and allegedly causing eye and skin infections in local children.
"We do have a problem with that and it doesn't mean that we're going to throw up our hands and leave," says Treacy. Understandably so - last year, Animex recorded sales of $410 (zł.1,314) million and sales of Krakus products in the US alone netted Smithfield $35 (zł.112) million. Morliny records annual sales of more than EUR 77.8 (zł.326) million.
"We are making very much of an effort to improve our communication with local communities, to improve our communication with the citizens of Poland in a manner that we hope will result in them recognizing that we are a good company who is out for the good of Poland and not some sort of a threat to them," says Treacy.
They may be fighting an uphill battle.
