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Global drinks giant Diageo, custodian of iconic brands such as Johnny Walker, Smirnoff, Jose Cuervo, Guinness and Moet & Chandon found itself at the centre of a public relations storm this week after it was alleged that they unfairly intervened at an annual drink industry awards event to prevent a rival from picking up an award.
Independent Scottish brewer, BrewDog claimed that the drinks giant Diageo had brought undue pressure to bear on the organizers of the event to override the decision of the judges to give them an award, allegedly stating that ‘under no circumstances could BrewDog be allowed to win’.
According to BrewDog, despite the fact that the judges had already made their decision and had their name engraved on the trophy, a Diageo executive attending the event, on learning of the decision, threatened to pull any future sponsorship of the event if Brewdog was announced the winner.
Since then a number of sources seem to confirm BrewDog’s story and Diageo’s subsequent apology.
The storm has left many of us working in digital media wondering what on earth the Diageo executive in question was thinking. Perhaps he or she had become emboldened by Dutch courage brought about by a drink or two during the evening’s festivities? Veterans of awards dinners know that these events can sometimes get a little ‘lively’ and this one was held in Glasgow after all…
Whatever the rationale, it seems that someone decided that presenting an award to these young upstarts was beyond the pale. What happened next is textbook example of the kind of David and Goliath spat that usually ensues when a large corporation gets caught out bullying a plucky new kid on the block in the blinding spotlight of social media.
Ever true to its often provocative and, some might argue, inflammatory house style, BrewDog posted an exposé on its blog tilted 'Diageo screw BrewDog'
BrewDog are well known and in some circles openly admired for its guerilla tactics and no stranger to courting controversy. Its 32% “Tactical Nuclear Penguin” beer caused a bit of a stir when it was released, but the truly staggering sequel “Sink the Bismarck,’ tipping the alcoholic scales at an eye watering 41%, really outraged Daily Mail readers who rather predictably thought that it was a "cynical marketing ploy that would corrupt our nations youth and put otherwise responsible citizens instantly over the drink-drive limit."
The fact that this particular tipple is ‘something of an acquired taste’ isn’t really the point. It challenged the status quo and upset the establishment. All this is perfect halo marketing for their core business of brewing beers that are actually very drinkable. Many would agree they are also doing a fine job of promoting the craft beer sector as a counterpoint to the homogenized conveyor belt of industrially manufactured beers that line supermarket shelves and dominate chain pubs.
Poking at the establishment
BrewDog seem to revel in their ‘under dog’ status and their marketing translates much of that of missionary zeal into prodding and provoking the establishment. This is something that successful self-publicists, spinmeisters and stunt marketers know is a pre-requisite for a challenger brand bereft of the vast marketing dollars of the major corporations.
Sir Richard Branson knows a thing or two about this sort of thing from his younger days. Just look at who came out best from the ‘dirty tricks' affair with British Airways all those years ago or how he reacted to the BBC’s decision to deny the Sex Pistols the number one spot when they were signed to his record label, despite the fact that they were clearly selling the most records.
These things rarely end well for large corporations once the smart guerilla marketers have painted them as the bullies. In today’s connected world, it’s never a good idea for a large and immobile conglomerate to cross swords with a brand that has so many digitally savvy brand advocates ready to take up virtual arms against the big corporations.
Sure enough, it wasn’t long before the hastag #andTheWinnerIsNot was trending worldwide on Twitter and within a few hours someone had already updated Diageo's Wikipedia page with a reference to the controversy. To make matters worse, some people online had spotted, rather amusingly, that Diageo’s CEO Paul Walsh has been speaking at the Ethical Corporation’s Responsible Business Summit yesterday. Presumably his talk didn’t extend to the ethics of jury tampering.
What would you do if you were the event organizer?
Those of us suits who deal with the sordid money side of running a business might spare some sympathy for the event organizers, in particular Kenny Mitchell, Chairman of the BII. Threatened with the loss of a major revenue stream, he was under an extraordinary amount of pressure. Anyone in the events business knows how important a major sponsor is. Someone has to pay for the drinks, don't they?
Rory Sutherland joked about something similar in a Ted talk when said that he was flattered to be invited to speak at such a worthwhile event. He usually worked for Ted’s lesser-know sister organisation, “Ted Evil” (aka the advertising industry) that meets every 4 years in Burma but is the one that secretly pays all the bills because they have clients who actually spend money. All of which, of course, raises the question how easy is it to have an awards event that is completely free from the commercial influence from the sponsors? Money talks after all.
When Econsultancy asked BrewDog founder, James Watt for his view on the options open to the events organizers faced with the possibility of losing their major sponsor he responded:
The BII's honesty in admitting the issue to us was refreshing - I can see they were in a very difficult position...Diageo’s actions are shameless, misguided and embarrassing. This is clear evidence of the dirty tricks used by global corporations to derail young competitors they fear. We are often criticised for suggesting big businesses do not play fair in this industry, yet this is another clear indication that some organisations feel they are big enough to be kingmakers, controllers of everyone else’s fate. It's essential to bring this to the public attention to show Diageo's true colours: once you cut through the glam veneer of pseudo corporate responsibility this incident shows them to be a band of dishonest hammerheads and dumb ass corporate freaks.
According to The Drinks Business, Diageo have been forced to issue an apology, stating that; “There was a serious misjudgment by Diageo staff at the awards dinner on Sunday evening in relation to the Award, which does not reflect in anyway Diageo’s corporate values and behavior.’
Hopefully Diageo have learned a lesson from their painful experience, although no doubt we’ll see them distance themselves from the executive in question. Apart from that person’s distasteful act of threatening financial sanctions on the events organizers, their next biggest mistake here was failing to do the due diligence on the recipient of their disdain.
Given BrewDog’s social media following and the nature of the way they have built their brand, how could they have not realized that there was a good chance that their bite would be just as damaging as their bark?