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O'Dwyer's Newsletter - Oct. 29, 2012 - Vol. 45 - No. 43 (download PDF version)


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MONSTER MOUNTS CRISIS DEFENSE

Monster Beverage Corp. is relying on PR support as the energy drink titan copes with a lawsuit and Food and Drug Administration probe into five deaths and other illness’ possibly linked to its products.

Los Angeles-based Pondel Wilkinson, which has handled investor relations for the company, is working the PR front and speaking for Monster. PW VPs Evan Pondel, a former journalist and son of PW founder Roger Pondel, and Judy Lin Sfetcu, are serving as spokespeople for the company, which changed its name from Hansen Natural in January.

A negligence lawsuit was filed this month against Corona, Calif.-based Monster by the family of a 14-year old girl, Anais Fournier, who died last year from a heart arrhythmia after drinking Monster beverages. The suit accuses the company of failing to warn of the risks of its drinks.

A Freedom of Information Act request related to the suit revealed the FDA incident reports, which date back to 2004. The New York Times reported the deaths have occurred in the last three years, however.

“Monster does not believe that its products are in any way responsible for the death of Ms. Fournier and intends to vigorously defend the lawsuit,” the company said. “The FDA has made it clear that it has not established any causal link between Monster Energy drinks and the reports it has received.”

Monster notes that “tens of billions” of energy drinks have been sold and safely consumed for the past 25 years, including eight billion cans of Monster Energy since 2002.

An FDA director told the Times that energy drinks are not defined by any regulation and noted the phrase is a “marketing term.”

But the American Beverage Association says energy drinks, like all foods and beverages, are regulated by the FDA, adding they contain half the caffeine of a similar size cup of coffee.

EX-SEN. COLEMAN PITCHES LIGHTSQUARED

Former Minnesota Republican Senator Norm Coleman is representing LightSquared, the bankrupt wireless venture that is controlled by hedge fund chief Philip Falcone.

He’s pushing to expand access to broadband technology by supporting LightSquared’s effort to use spectrum regulated by the federal government, according to a filing by Coleman’s company, Hogan Lovells.

Coleman, who is of counsel to HL, joined the firm after his razor thin loss to comedian Al Franken in the 2010 election.

LightSquared in 2011 won conditional approval by the Federal Communications Commission to install its network, but the FCC revised its decision earlier this year due to concerns with interference of the global positioning system.

In September, LightSquared made a new filing with the FCC that deals with the panel’s technical concerns.

Falcone’s firm is Harbinger Capital Partners.

WPP: Q3 PR REVENUES SLOW, CUTS OUTLOOK

WPP reported third quarter revenue rose 1.6% to £2.5B amid a slowdown in North America and Continental Europe which hit advertising, media, PR and public affairs.

In dollars, revenues were nearly flat at just under $4B.

“Functionally, both consumer insight and public relations and public affairs experienced slower growth than in the first half, again particularly in September,” WPP chief Martin Sorrell said in a statement, which noted a “difficult” quarter in the sector.

PR and public affairs ticked up 2.3% to £227M, but fell by 1.7% over Q3 of 2011 on a like-for-like basis (excluding acquisitions and currency fluctuations). North America was down in Q3 across all of the PR group’s brands, which include Ogilvy PR, Burson-Marsteller and Hill+Knowlton Strategies, offset by growth in the U.K., Latin America and Africa.

Through the first three quarters, PR and public affairs revenues were flat (+0.1%) on a like-for-like basis at £686M.

WPP sees revenue growth slowing for Q4 in North America, Europe and Latin America, particularly in PR, PA, branding/identity, healthcare and other specialty communications.

For North America, revenues on a like-for-like basis were down 0.4% at £885.

WPP cut its like-for-like revenue outlook for the year from 3.5% forecast in August to the range of 2.5% to 3.0% percent.

CANADA WORKS TO BOOST YOUTH VOTE

Canada’s government is collecting proposals from PR firms to develop a strategy to reverse declining civic engagement among youth.

The Office of the Chief Electoral Officer of Canada, an agency of the Canadian Parliament commonly known as Elections Canada and based in Ottawa, has released an RFP for a three-year PR strategy to engagement stakeholders through forums like academic symposia, consultations with educators and community leaders, and through venues where youth gather to stem a long-term decline the country traces back to the early 1970s.

“Not only are today’s youth much less likely to vote than previous generations, they are also less likely to become regular voters later on in life,” says the RFP.

Only about 39% of Canadian voters aged 18-24 cast ballots in 2011 national elections. By contrast, from 49%-54% of American youth 18-29 voted in the 2008 presidential election, according to a study by the Center for Information & Research on Learning and Engagement.

Canada notes the decline has serious implications for the “long-term health” of its democratic system.

A one-year contract with a budget between $100K and $500K will carry two option years.

Proposals are due Nov. 28. View the RFP (link).

 
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