Competitive Manslaughter

Time to Stop Inter-Industry Sniping

Often in The Firebreak we write about how activists and media complicity are major reputation threats to industry. But the biggest problem for industry often lies within, with competitors sniping at products and substances with the hope that public fear or precautionary regulation will open new markets for their alternatives. We often hear about how much industry spends on lobbying, but often more lobby spend in many public debates has been directed against their competitors’ products than for their innovative solutions (and it is not just about paper v plastic).

Is it no wonder then that trust in industry is declining? The public hears the negatives but the positives are lost in the process. Industry might fund or get together with an NGO to speak out on plastic waste if their supply chain has alternatives. Or leading companies can work together with governments to consolidate their advantages (like the nuclear industry enlisting the French government to push the European Union down a radical decarbonization path during the Kyoto Protocol).

The Tyranny of the Alternatives

A company bringing a new product onto a crowded market could have a slow uphill struggle to gain market share. They might do better if their main competitor were to experience some regulatory or reputational issues. Environmental risks, CO2 emissions, recycling costs, potential health issues, sustainability shortfalls… if some group were to question a competitor’s product, then any alternatives will start to smell better.

Such conflicts were legendary within the chemical industry. A commodity chemical or polymer (like PVC) may be cheap and practical in certain applications, but its environmental profile may have some sustainability gaps or legacy issues. A specialty chemical, newer and more expensive, might not have such historical baggage and can use this to gain market share within supply chains. The European REACH Directive further enabled such opportunism via its substance registration process.

The stench of precaution is a useful weapon for the unscrupulous organization. The supply chain has grown quite complex with some products having hundreds of sourcing points. If a product or substance in this supply chain gets put into question, even just a whiff of a potential precautionary ban will make downstream users scramble for alternatives. And once a downstream user has replaced the substance with a “safer” one, they have a potential market advantage and would find it in their interest to see the original substance under question suffer from precautionary restrictions.

It is a dog-eat-dog world out there and the main threats to companies are not always coming from the NGOs, law firms and activist foundations. It gets particularly unscrupulous when markets are in transition. Here are several examples.

Aluminum or Plastic?

The decades-long campaign to ban brominated flame retardants is a good case study in how the stench of precaution, when allowed to waft throughout the supply chain, can lead actors in competitive industries to promote doubt for their own advantage. Bromine-based flame retardants worked well to ensure plastics (a petroleum-based substance) would not burn. This safety feature was added to plastics across a wide range of electronics products including computers (that would heat up and, if not protected, burn rather spectacularly).

An alternative to brominated flame retardants was aluminum, which was not flammable, but very expensive and energy intensive. In the 1990s and early 2000s, a series of studies started to raise doubt on the safety of brominated flame retardants and the industry fell into a defensive, denial trap. More studies were done finding the substance in the environment (it was persistent, which was its value as a flame retardant) and NGOs like Greenpeace started to do (very expensive) biomonitoring tests to show BFRs accumulating in blood, urine and tissue samples (albeit at very small, non-hazardous levels).

Fear of being blacklisted with a tainted substance, the supply chain started to look for alternative substances that would not burn. Greenpeace launched the famous Green my Apple campaign along with their annual green electronics guides condemning any companies that dared to use PVC or brominated flame retardants. Sure enough, in the mid-2000s, computer companies, led by Apple, started coming out with (much more expensive) aluminum-framed computers. Bromine is now becoming a legacy substance, condemned not by science and facts, but by the taint of precaution brought about by some ruthless, stealth lobbyists from the aluminum industry who bought off some gullible activist scientists and NGOs.

We should not overlook how the original campaigns, regulatory pressure and doubt-driven research against brominated flame retardants came from both Norway and Washington State. These two areas are home to the largest aluminum companies and smelters.

Natural or Synthetic?

For most of the history of humanity, food was food, grown and then consumed. As populations increased and diets became richer and more diverse, farmers utilised technologies to increase yields and take pressure off of the land. The more doomsday seers since Malthus predicted catastrophe, the more agronomists provided solutions to provide for growing global populations. At some point in this history, food became an issue, or rather, an opportunity, first for the organic food industry lobby, then the natural food movement, health foods, slow food, agroecologists…

The key tactic for these movements to grow their markets was to create distrust in food safety, the ethics of food production and the health risks from agricultural technologies. Fear campaigns have left mothers on tight budgets not able to afford to feed their children fresh fruits and vegetables, activist groups attacking farmers in their fields and regulatory demands that risk reversing the global food security achievements of the last five decades.

The worst snipers here are not the fringe health food companies but the large food manufacturers, retailers and processors who know that the organic lobby’s claims are not scientific but see increased margins and label opportunities (non-GMO, pesticide-free, cage-free…). They are indirectly amplifying the fear campaigns in the hopes of a quick profit.  

Authentic or Innovative?

The tobacco industry has been going through many iterations recently. Upstarts like Hestia have entered the tobacco market as a young, trendy tobacco company stressing their all-natural, organic, fair-trade product. Branding their product as “Naked. Wild. Tobacco.”, Hestia is attempting to carve out a niche market that undermines the larger companies. Decades ago the main tobacco companies paid a price for using sex in their ad campaigns, but Hestia is running in-your-face sexual content in their marketing campaigns, which are driven almost entirely by social media influencers. The New York Times, which attacked JUUL for its youth-focused vaping ads, celebrated the Instagram “cigfluencers” helping Hestia market its innovative, hipster-themed tobacco products.

Meanwhile, the legacy tobacco companies are shifting their focus to nicotine vapor products and other smoke-free nicotine sources to safeguard their business as smoking plummets to historic lows. But as this market develops, some in the industry have resorted to rent seeking to secure their market share. Instead of developing products that appeal to smokers, they lobby for regulations that keep innovative competitors out of markets.  

Time to Stop the Sniping

Industry has to stop sniping at each other. In the dust kicked up from such internecine battles, public trust wanes. Substances are already vulnerable from activist campaigns and regulatory bias so having competitors weighing in and applying pressure is definitely not helpful.

Industries, via their trade associations, need to have codes of conduct that include not attacking their neighbors or their products. For this to work, trade associations need to have more teeth, the capacity to expel members and the power to speak for their industry’s larger interests (rather than for the lowest common denominator). NGOs, on the other hand, have a certain “bro code” where no groups ever publicly criticize other NGOs’ campaigns. This preserves a public perception of a united group of organizations completely on message.

Until industries can organize to express shared views affecting public perceptions, they need to stop lobbying against their competitors and stop shooting each other in the back. If not, public trust in industry will continue to decline and make the vulture-work of NGOs, journalists and tort law firms all the easier.