Learn From Pizza Hut & Marugame Udon Crisises

Pizza Hut and Marugame Udon are reported to be serving food with expired ingredients to their consumers. They were allegedly deliberately extending the expiry period of their food ingredients and endangering the health of consumers. How to deal with the PR crisis that occurred in this famous restaurant chain?

This PR crisis blowed up since the media covered in BBC Indonesia on 4th September 2016, where the investigation team from BBC and Tempo gathered some document, e-mail, and the photos from former senior in Sriboga Food Group that showed the practice of using expired ingredients in international food chain. The source, who has worked for a long time in a group talked to BBC Indonesia and Tempo on condition that their identities would not be disclosed.

The internal source said, the practice of extending the period of unauthorized expiration occured systematically involving the company’s top management in Indonesia, and had been going on for years. Added to this his efforts to stop the practice were in vain. When he first presented the case to the BBC, he said:

“At first I did not want to talk to the press, because once disclosed to the press, the public will known about this, and would be a problem, which could not be fixed quickly, could even be no longer controlled.”

Then the internal source explained his reason to talk to investigation team from Tempo & BBC.

“But apparently, the press is the only last way to ensure (that the practice of extending this expiration period is stopped). The important thing (this practice) does not happen again and the responsible person is punished accordingly. “

One of the photo that showed the practice of extending the expiration period. Source: BBC Indonesia.

Quoted from BBC Indonesia, “One day he was surprised by the existence of several gallons containing Tempura sauce with stickers that signify an extended shelf life. This is not a reasonable thing. He also asked that question, and received an explanation that this step had been approved by the Quality Assurance (QA, Quality Assurance) section. Finding out more, he also got news about the allegation that extending the shelf life is a practice that has been used for some time at Sriboga Food Group. Initially he related it to the start of operation of Marugame Udon in Indonesia, in 2013. So he assumed, this practice had only lasted three years. But he said, he was informed that this had been going on for much longer. ”

Based on the news from BBC Indonesia, PT Sriboga Muragame Indonesia has denied the allegation of extending the illegal storage. To the BBC-Tempo Team who visited his office, President Director Sriboga Raturaya, the parent company of Sriboga Food Group, Alwin Arifin – claimed that he had been questioned by the police several times, but he said the allegations were untrue and even slanderous.

Here is the news link from BBC Indonesia:

When the news began to spread and entered into various social media, the Pizza Hut & Marugame Udon then took several PR steps including Standby Statement, Press Conference held at the Sultan Hotel on Sunday 4 September 2016, and Media Visit at the Pizza Hut factory . Unfortunately not everything runs smoothly and as expected. Let’s learn from what they did when the PR crisis occurred so that we are better prepared to handle the PR crisis in the future.

Incomplete Standby Statement

When re-examining the statement issued, several questions that arise later are the use of “inaccurate” statement used by Pizza Hut becomes a little ambiguous. “Incorrect” and “inaccurate” have slightly different but clear meanings about whether an accusation is true or false. Whereas, “incorrect” can mean the accusation is false, is slander, is guaranteed not to occur, is a lie while “Inaccurate”: the accusation can be true, only the news that does not provide complete information or there are parts that are not completely right.

The use of the word may still be understandable, but there are two important things that are missing from the standby statement element issued by the Pizza Hut and Marugame Udon Indonesia team:

There is no chronological time

Chronology provides an opportunity for companies that have a crisis to explain their position when the issue arises, and provide a clear reference to the public about the origin of the expiration period issues that arise. Stating “based on news from the media” will be very relative both in terms of scale and strength of the issue. An online news from the media class 3 and news that emerged from the big media (eg Tempo or Kompas) became the same position considering both are the media, and both preach the issue of expiration.

When explained in social media like Instagram, there are caption that can use for company to explain the cronology, and when they use a twitter, company can take the advantage from Twitter thread. In other words, there is always a ‘room’ to explain the case chronology no matter what medium that we use, but unfortunately this chance is wasted by Marugame Udon and Pizza Hut Public Relations.

There was no apology

When making a mistake, it is a natural things to apologize and express regret. However, is apology still needed when we do not feel wrong or the news is not true? if in the context of public relations and crisis management, apologies must still be issued.

Apology shows the empathy from the company to consumers who are affected by negative news or issues that befall them. Pizza Hut and Marugame Udon must have loyal customers who help the company continue to grow. These consumers also become the marketing ammunition of companies, when consumers not only buy, but also recommend the product for family, friends, and coworkers. What consumers do, plays a major role for the development of products and the receipt of these products in the general public.

Imagine when Pizza Hut and Marugame Udon, which are food products that are already quite familiar with Indonesian people, are assumed to serve food with expired ingredients to their consumers. The issue that states that Pizza Hut and Marugame Udon deliberately extend the expiration period of their foodstuffs and endanger the health of their consumers is certainly unsettling and inviting their consumers’ concerns.

Stephen McCarthy, President Director of PT. Sarimelati Kencana as a representative has stated that there is no health problems have befallen to more than 3 million consumers from both products for decades, but this report once again brought concern to some consumers of these two food products, especially regarding their health and the safety of the food they had been frequent consumption.

Does eating Pizza Hut and Marugame Udon means harmful to our health?

Does bringing my child or my family at Pizza Hut and Marugame Udon to eat together means putting them at risk of health problems?

Am I guilty of recommending Pizza Hut and Marugame Udon to my friends and coworkers?

Although this sounds exagerrate, these questions will almost certainly arise in the minds of consumers when responding to this issue. It would be very nice if Pizza Hut and Marugame Udon acted ethically to apologize for reporting about the expiration issue that brought concern to their loyal consumers

The empathy shown by the company when it was hit by a crisis is crucial in the eyes of consumers, especially Indonesian consumers who are known for being “emotional”. Empathy through apology is also a way to show the enormous concern of Pizza Hut and Marugame Udon for their consumers and maintain consumer confidence in both products despite the crisis.

There is no resolutions

When a company faces a crisis, the consumer will be first court that the company faces. Public opinion will greatly influence whether the crisis can be resolved properly or even lead to bad results for the sustainability of the company. There have been many cases of public relations faced by companies because they are dealt seriously and even bring long-term losses. The example was the International Omni Hospital case for the local, or the case that befell American Apparel in the US

The important thing that companies need to show when an issue occurs, whether or not it is right is to convince the public especially their consumers, that this issue will not come back, because the company has made changes or improvements in their management. The company guarantees consumers that they really care about consumers, and assures consumers that the quality of their products are guaranteed.

Pizza Hut and Marugame Udon focus on refuting the issue addressed to them, so that they forget to do the important thing: show intention to change. Action speaks louder than word and declare the initiation of action to act related to the issue of expiration that befell them to show the seriousness of Pizza Hut and Marugame Udon in handling the issue.

The spokesperson were more that one. with the different statement.

The second mistakes that Pizza Hut and Marugame Udon did was spokesperson did not focus in one ‘voice’. Based on the news from several media, there were more or less two spokesperson who talked about this issue:

Stephen McCarthy, President Director of PT. Sarimelati Kencana or Pizza Hut. “We never extend the food ingredients self life, I affirm, we never let anyone to save expired food ingredients. We take concern seriously to keep the food safety, we are never serve the expired food” (based on news from tribunnews.com)

Pankaj Batra, Pizza Hut Asia Marketing Director said, “Our franchisees in Indonesia have confirmed that the process has been done” “The extension of the shelf life can be approved by the QA portion of the local franchise holder, only after they have received written recommendations from the manufacturer or supplier to confirm that the shelf life can be extended, and there is no risk security. The R&D or QA section is also expected to carry out internal sensory tests, “(based on tribunnews.com news)

Alwin Arifin, President Director of PT. Sriboga Ratu Raya “We always serve quality, halal, hygienic and safe food and drink. We never use expired food, so the accusation of a national magazine is very pressumetous and inaccurate. The magazine’s accusation is based on assumptions, I doubt, what motivations from this magazine, “(based on Suara.com news)

It would be very confusing when local management stated incorrectly about the extension of the food validity period (which was later interpreted as an extension of the expiry period) and the opposite statement was actually made by the Asian regional management, which affirmed the extension of the validity period, as long as it was mutually agreed

When facing a crisis, it is very important for companies to have a common voice on an issue. If you cannot give the same understanding, at least one is appointed, one spokesperson will only talk to the media and give briefs to the entire team, even regional, not to give a statement to the media directly, and refer to the official spokesperson.

The media wants to present in-depth coverage of an issue, and get as many sources as possible about the issue will be very helpful in enriching news material. Don’t be surprised if in this case the media also ask questions from kitchen employees, food vendors, to warehouse guards and waiters to be questioned about the case. As long as it is still within the scope of management, every statement that comes out of them can be a valid statement to be issued by the media

The following Cases

Until now, the case affecting these two food products is still ongoing. BPOM has encouraged the police to investigate this case until it is finished based on the news released by JPNN on Tuesday stating that the investigation is still ongoing and the legal process has entered into the National Police BARESKRIM.

This case also continues to snake since the discovery of several facts related to the issue of the use of expired materials. The fact that was later discovered were:

There are seven Pizza Hut food ingredients that are added to the useful time of the ingredients. (source)

Police Criminal Investigation Director, Brigadier General Purwadi Arianto said his team found that the Megurami Udon (MU) restaurant was suspected of using formalin in the supply of Udon noodles. (Source)

On the other hand, even though it was declared not to cause harm or cause health problems, what was done by Pizza Hut and Marugame Udon by extending the product expiration period violated ethics and the law. Law Number 18 Year 2012 concerning Food explicitly prohibits the circulation of expired goods. Clause 90 letter f of the law includes food items that have expired in the polluted category with a fine of up to Rp 4 billion or two years in prison.

From a public relations point of view, dealing with a crisis is not easy. the uncertainty of reporting and the arrival of issues that often can suddenly make companies less alert and actually forget some important aspects in handling issues and crisis management in front of them. Public relations must have a plan beforehand about the issues that may be faced by the company and begin to draw up a plan to handle it, so that management is more prepared and alert in handling it.

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