Sunday, July 31, 2005
Manufacturers who "donate" profits
I'm always suspicious when a company boasts it donates x amount of profit to various causes--generally environmental groups. (Newman's Own is one company I trust actually donates a lot of money.) But the Aug Gourmet News report on Endangered Species Chocolate confirms my mistrust. Apparently the founder is suing the new 51% shareholders, who have fired him. Citing mismanagement of the company, the new owners point out that they were unable to find any records that any money was donated to help save endangered species. Now that is the whole point of that chocolate's appeal--each flavor with a signature attractrive photo, from bats to belugas. Endangered Species chocolate is not Fair Trade, it is not organic, but it has a great marketing hook it is not fulfilling. Apparently he was losing money, not making a profit. Another way to not make a profit is for the owners to pay themselves a big salary. So that is a very iffy statement--donate a percentage of profit. They shouldn't be allowed to state that if there is no profit. There doesn't seem to be any oversight of this claim. Do I feel confident the new owners will do any better--not really. They say the business is in terrible shape, but why did they buy it other than to grab the marketing concept?