GSK using ‘sledgehammer’ tactics on agencies
pharmafile | November 29, 2013 | News story | Sales and Marketing | Cameron, China, GSK, horlicks, sky
GlaxoSmithKline is being accused of using ‘sledgehammer’ tactics by marketing agencies promoting its products after the firm allegedly demanded cash rebates from those wishing to carry on as suppliers.
The London-based company has asked hundreds of agencies working on consumer names such as Aquafresh, Beechams and Horlicks to come up with one-off payments if they want to remain on the job.
In a memo obtained by Sky News, the company wrote: “If your agency has performed work for GSK in 2013, please provide a [percentage] rebate for the 2013 global annual spend by GSK. For all future GSK annual spend levels, please provide a percentage rebate.”
It continues: “If selected to be a part of the GSK Global Digital Roster, please indicate a one-time sign-on bonus you will offer GlaxoSmithKline.”
The request has frustrated marketing companies who complain that multinationals are using their weight to demand upfront cash from smaller partners, simply for the privilege of doing business.
Scott Knox, managing director of the Marketing Agencies Association, told The Times newspaper: “To hear that GSK is up to this is extremely disheartening. It’s not about the best strategy or the best creative – it’s about pounds, shillings and pence. It’s lazy business practice. There are better and more productive ways to negotiate than using a sledgehammer.”
One of GSK’s suppliers told Sky News that the drugs company’s approach was unacceptable, saying: “The demands are naked profit-chasing. They are outrageous.”
A GSK spokesman said that the company was ‘reducing complexity’ by “increasing the levels of business we place with key suppliers while securing discounts on volumes of services”.
The spokesman added that money was never the sole factor in the way it awarded business, adding: “We value our suppliers and we would encourage them to talk to us if they have any concerns.”
This comes in the same week as prime minister David Cameron prepares to lead a trade delegation to China, and has invited GSK’s chief executive Sir Andrew Witty to attend.
But the company remains tight-lipped over whether he will go, given the ongoing bribery scandal that is engulfing its Chinese operations.
Ben Adams
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