When brand owners hire former Government ministers to give advice, the question has to be, are they simply recruiting a fading political influence with an outdated contacts book?
The latest company to fall for the political charms of an ex-minister is PepsiCo UK, which has appointed former health secretary Alan Milburn to sit on its newly-created nutritional advisory board along with Tony Blair’s political image maker Philip Gould (MW last week).
Milburn has previously called for tough Government action against junk food marketing, so PepsiCo may consider it a coup to get him in the fold. The company is transforming its profile and portfolio towards healthier products and what better way to signal this than to hire Milburn, who has warned of the dangers of unhealthy eating?
Some brands have jumped at the chance of getting a fallen political celebrity on board, though many think they do it simply to bask in the public relations kudos. Tobacco giant BAT employs former health minister Ken Clarke as non-executive deputy chairman, Walt Disney recruited ex-culture secretary Chris Smith as an adviser and BP hired Labour spin doctor Anji Hunter. Advertising agency Clemmow Hornby Inge employed ex-minister, Peter Mandelson, as a director for a time and he now stands to make up to £1m from selling his shareholding in the agency (MW April 26).
But many wonder how much companies really benefit from such signings apart from gaining a minor boost to their public image. Jack Gordon, founder of public affairs consultancy Silver Hammer, says/ “In many cases, it is simply because the company has had a real lambasting for unethical, anti-social activities that has gained it the sort of publicity it would rather sweep under the carpet. The political celebrities are drawn in to become the acceptable face of the business.” That said, some might wince at the thought of a politician being used as an acceptable public face, given the low esteem in which many are held.
PepsiCo’s public relations agency Freud Communications – where Gould is a non-executive director – explains that the aim of the nutritional board is to advise on “sustainability and health and wellness”. The company is planning to hire nutritional and scientific experts to the board as it seeks to tackle the enormous challenge it faces in the coming years.
The Pepsi, Walkers Crisps and Tropicana juice owner needs to reconfigure its portfolio away from fatty, sugary and salty foods while still making a handsome profit. At the same time as introducing more healthy snacks and drinks, it is trying to make its traditional products less unhealthy, for instance by cooking Walkers Crisps and Wotsits in Sunseed oil – a special type of sunflower oil – to slash saturated fat content. Milburn, who was health secretary between 1999 and 2003, will advise on this “strategic direction” and will earn £25,000 for attending four meetings a year. Gould will earn a similar sum.
The news emerged just before Tony Blair announced his resignation as Prime Minister, and some view the Pepsi hirings as Blairite rats fleeing a sinking New Labour ship. When more of Blair’s former ministers are sent to the backbenches as the next Labour leader takes office, there will no doubt be a further rodentine rush to advise brands.
Any brand owners keen to hire the political knowledge of former health secretary Patricia Hewitt, ex-home secretaries Charles Clarke or John Reid or soon to be ex-defence minister Geoff Hoon should set their traps now, using vast sums of cash rather than cheese. “There will be a lot of high-profile people looking for second careers,” says one well-placed source.
Former Tory ministers and MPs have tended to head for merchant banks and other institutions in the City at the twilight of their political careers. For New Labour, it would be no surprise to see ex-parliamentary heavyweights jump at the chance of £2,000 per hour consultancy fees gained from handing out advice to brand owners.
George Pitcher, founder of public relations company Luther Pendragon, remembers how eyebrows were raised when former Tory Chancellor Nigel Lawson joined investment house BZW and ex-trade and industry minister Lord Young headed for Cable & Wireless. These moves prompted accusations of a conflict of interest, says Pitcher, though he adds: “The companies are a bit duped under these circumstances but soon get over it and realise the reason the politicians have joined is because they have lost their influence in Government. Their shelf-life quickly becomes fairly limited.” And he adds: “It won’t take long for companies to realise they have bought a pup.”
However, some believe PepsiCo is making a smart move by setting up the nutritional board. It has created similar boards in the US which insiders say have helped focus the company on its new, healthier direction as well as giving it a public relations boost. Its Health & Wellness advisory board boasts names such as Gro Harlem Brundtland, the former Labour prime minister of Norway and ex-director general of World Health Organisation and a medical doctor. The company also has ethnic advisory boards – one includes the radical black activist Reverend Al Sharpton
An insider says of the UK hirings, however: “This is more a PR move than a move of substance, though it is harsh to say it is just spin because when these boards work well – as Pepsi has proved – brands can genuinely get a competitive advantage from them.”
According to Martin Glenn, former chief executive of PepsiCo UK and now chief executive of Birds Eye, the nutritional board is particularly important in the UK since PepsiCo, as a multinational division, does not have non-executive directors despite being the size of a large FTSE 100 company. “For big businesses and brands, having a group of people independent-minded enough to tell you what they think is really important. Alan Milburn is a bit of an independent spirit and PepsiCo will take the advice seriously,” he says.
Walkers crisps relaunch
Gould has been working for PepsiCo for some time and was instrumental in conducting market research surrounding the Walkers Crisps sunseed oil relaunch last year.
Milburn, however, faces accusations of a conflict of interest, or at least hypocrisy, given that he was the health secretary until the time of the Health Select Committee on obesity in 2003 which gave Glenn a very public grilling about aggressive promotion of junk foods. Milburn told one conference in 2002: “Healthy eating could reduce deaths from cancer, stroke and heart disease by one fifth.” In another speech, he said: “Worldwide, mass marketing of foods and drink high in calories, fat and sugar is replacing traditional diets rich in fruit and vegetables.”
Another of Milburn’s roles is on the healthcare advisory panel of Lloyds Pharmacy, which owns 1,600 pharmacies around the UK. He sits on the panel with Tony Newton, health secretary between 1986 and 1988, and Sally Morgan, Blair’s political secretary until 2001.
If more brand owners set up advisory panels and pack them with fading political luminaries, there will be plenty of lucrative work around for the next wave of under-employed ex-ministers eager to make easy money.