“(H)e heard what seems to be the mantra for this MNC: ‘That’s your problem. If you can’t deal with it, there are plenty of distributors lining up to take your place.’”
by Ducky Paredes
Through e-mails, I am learning a lot more about a major Multinational Corporation’s (MNC) less-than-ethical practices, which was the subject of an earlier column – A Fairy Tale, Of Sorts.
This company is involved in the production of coffee, a malted chocolate beverage, dairy products and cereal, all good things; but, it is also a mindless bully to its local distributors.
I am myself a very small distributor for a soft drink company in Antipolo which is the beginning of my interest in the problems of people in the same business of distributing for MNCs. The one I deal with – Coca-Cola – is not at all like this MNC that treats its distributors like dirt. I can only sympathize with the victims of its overbearing management, arrogance and callousness. Coca-Cola, on the other hand, is very reasonable.
The MNC signs an agreement with its distributors with very clear-cut stipulations, only to breach every major point as the days grow into weeks and months. Promises of marketing support are quickly forgotten; in-house financing are forcibly passed on to third-party banks, and the MNC’s non-performing accounts are distributed among its unfortunate dealers.
One e-mailer recounted that in 2006 when the tropical storm “Milenyo” ravaged several parts of the Philippines, the typhoon blew away the roof of his warehouse and destroyed most of the nearby infrastructure. His stocks were completely ruined.
When he saw that other companies immediately sent support (even relief goods) to his neighboring warehouses, he was fully confident that his MNC business partner which was far bigger and more prestigious, would not be far behind. The days rolled by, and the MNC was still nowhere to be seen.
Finally, the storm-hit distributor called their offices, and was given three “non-negotiables”: 1) The MNC would not help in any way with the ruined stocks. This was his problem – what to do with them, and where to store them; 2) It did not matter if Milenyo blew away his roof and destroyed his warehouse. If there was a scheduled delivery, the MNC would send it and leave it by the roadside if the supplier was unable to rebuild the warehouse in time; 3) Milenyo or no Milenyo, millions of ruined inventory or not, sales targets were sales targets. If the distributor was even slightly below his quota, he was told that could not “use the storm as an excuse”.
“Since you’re leaving me out in the cold, what about the time, effort, and expenses needed to clear away the debris, fix up the area, handle the ruined inventory, and normalize operations? Don’t I get even the smallest amount of leeway?” the distributor asked.
Negative, he was told. And following the rejection he heard what seems to be the mantra for this MNC: “That’s your problem. If you can’t deal with it, there are plenty of distributors lining up to take your place.”
While it is probably true that the distributor needs the MNC more than the MNC needs that particular distributor, this is not the way we Pinoys treat one another.
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Another e-mailer points out that the MNC has the highly unscrupulous – and yes, highly illegal – habit of allowing their own corporate counsel to notarize legal documents which she herself prepared. These are undeniable grounds for disbarment, but the MNC remains unfazed, confident in its sheer economic weight. The email sender recounted how the MNC had him called to their office to settle some long-overdue payables. When he went there with a lawyer-friend, the MNC’s legal counsel engaged them in some small talk, before handing over a quit claim document which she prepared. After some back and forth about the wording and terminologies, the signed document finally reached them later on. To their utter disbelief, it was notarized by none other than the MNC’s lawyer, the very same one who prepared the quit claim and even made amendments as per discussions.
“I’ve known that lawyer for quite some time now. How in the world could she have missed this?” The lawyer-friend then called up the MNC’s attorney and asked if the management knew about the mistake. “Oh, it’s not a mistake,” she replied. “That’s how we get things done here. We’re (name of MNC), we can do anything.”
The e-mailer says that the MNC’s bullying tactics have become too widespread to be ignored ands has reached the ear of Senator Miriam Defensor-Santiago. Senator Miriam Defensor-Santiago apparently had this particular MNC in mind when she recently filed Senate Bill 3099, or “The Anti-Trust Act of 2009.” Santiago is the chair of the Senate Committee on Economic Affairs.
The Anti-Trust Act of 2009, aside from “preventing undertakings, corporations, and businesses from distorting competition in the marketplace” likewise sanctions the “abuse of market power by monopolies.”
As a fellow distributor for an MNC, I can only sympathize with those involved with this particular MNC, a perfect example of a foreign company showing us all how not to do business in the Philippines.
Sadly, many in the business of distribution will take whatever the MNC dishes out in the hope of turning a profit. Once in, however, getting out will mean losing much of what one invested in the enterprise including what went into warehouses, vehicles and the effort of building up a distribution business for an MNC that gives zero value to one’s efforts of building up the business for the MNC.
As the MNC correctly points out, there are many dying up to be awarded an exclusive distribution area, Thus, the MNC does not feel that it owes its distributors anything. There are other MNCs, however, who treat their dealers as actual business partners.
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hvp 04.27.09)
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