Rongyao’s US Lawsuit Spotlights China’s Lack of PR Savy *荣耀高调起诉辉瑞 彰显公司缺乏公关意识

I wanted to start today with a report that shows that Chinese firms need some serious education in how to do good public relations and, equally important, need to understand when NOT to embark on high-profile campaigns. Just a day after I chastised telecoms equipment giant Huawei for its poorlyl-timed criticism of a US government decision (previous post), a much smaller company called Zhejiang Rongyao Chemical has issued a very public announcement saying it is suing pharmaceuticals giant Pfizer (NYSE: PFE) in the US for alleged breach of contract. (company announcement) From a quick glance at the headline, this action looked neutral to even perhaps slightly commendable, pitting a small Chinese firm seeking justice against one of America’s biggest drug makers. But a further reading hardly makes Zhejiang Rongyao look very sympathetic. It seems the company was selling a health additive used in chicken feed to a company that was later acquired by Pfizer, and that Pfizer this year unilaterally suspended a multi-year contract to buy the additive. So far so good. But then Rongyao discloses that Pfizer made its decision after the US Food and Drug Administration, the agency charged with ensuring food safety, released a report showing that chickens treated with the additive had high levels of inorganic arsenic in their livers. When the agency charged with ensuring national food safety makes a discovery like that, the natural reaction in the US is to stop using the product and wait for further tests. That’s obviously not the case in China, where profits and commercial agreements for a company like Rongyao are clearly more important than something like public safety. I’m not an expert on this kind of matter so can’t really comment too much on the safety issue, but clearly from a public relations perspective this is not a case that Rongyao should be publicizing quite so loudly. Its desire to keep feeding Americans chickens with high levels of arsenic in their livers due to its additives will hardly win the company much public sympathy in the United States.

Bottom line: Chinese firms like Huawei and Rongyao need to better understand the effective use of public relations in dealing with setbacks at home and abroad, or risk major public backlash.

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