While the recent legal wrangle between household goods giant Procter & Gamble (P&G) and Unilever, over P&G’s alleged spying on Unilever’s US haircare operations, might have been resolved, it has placed a question mark over the use of market intelligence/’corporate espionage’ by companies that wish to remain one step ahead of their competitors.
Market researchers insist that there is a fine line between market intelligence and corporate espionage. Specialist market research company Hall & Partners Europe chairman Marilyn Baxter says: “Market research is less messy than corporate spying. It certainly does not include sifting through competitors’ rubbish bins.”
P&G, the maker of PantÃÂ¨ne and Head & Shoulders, recently admitted that it had been employing agents to search for discarded documents in Unilever’s rubbish bin in the hope of gleaning information about its Anglo-Dutch rival’s latest plans in the shampoo market. The competitor-intelligence contractors hired by P&G are also said to have misrepresented themselves as market researchers in order to gather information on Unilever’s haircare brands. P&G denies that misrepresentation took place.
Unilever’s haircare range includes Salon Selectives, Finesse and Helene Curtis.
The matter has been resolved, but the terms of agreement have not been disclosed. It is understood, however, that P&G has fired three of its employees. The company’s director of corporate competitive intelligence Susan Steinhardt has also left the company, but it is unclear whether she is one of the three who were fired.
Baxter says: “I did not know that titles like director of corporate competitive intelligence even existed. It sounds very MI5-ish, and it doesn’t seem as if something like that would fit with market research practices that function within strong ethical standards.”
In addition, P&G is expected to pay Unilever about $10m (£6.7m) as part of the agreement. The terms are also believed to include P&G’s promise that none of the Unilever information procured by the company would be used in any of its plans.
Another market research company believes the issue has been hyped up and blown out of all proportion, and that there are “no James Bonds or dark-cloaked men tip-toeing around on dark nights to uncover safes and open secrets”.
In the late Eighties, a private investigator hired by electronics chain Dixons was jailed after he bugged the phone of an employee of rival company Comet. Like P&G, Dixons at the time had said that the investigator was acting on his own and had “gone too far”.
However, Unilever seems to be playing down the spying issue. According to a spokesman: “The terms of the agreement are simply to prevent the misuse of Unilever’s secrets.”
It is unclear from the cryptic agreement whether this would affect the time schedules for any future launches in the haircare category, for either Unilever or P&G.
The spying case comes at a time when P&G is trying to complete its estimated $4.9
5bn (£3.35bn) acquisition of Clairol, the haircare business of Bristol-Myers Squibb.