Businesses Beware: Do Not Milk Consumers!

September 2008 was a difficult month for some, to say the least. On Wall Street, news about the collapse of financial and lending institutions, etc. dominated headlines; while in Asia, China’s melamine-tainted milk scandal came to light when over 54,000 babies were taken ill and a handful even lost their lives.

Focusing on the melamine milk crisis, let’s consider what led to this tragedy.
One issue that no business can truly avoid is rising costs. With oil prices higher than ever before and affecting just about every industry, companies have had to find creative means to stay competitive. The two more commonly taken measures are shrinking portions and substitutions. And these are not exclusive to China…

Consumer food market examples:

1. Your box of cereal may look the same as before, but check the content weight and you might see that you’re now paying the same (or more!) for less product. [shrinking portions]
2. Foods such as sausages or meat patties may now contain a higher percentage of cheaper ingredients such as flour rather than real meat. [substitutions]

Substitution was exactly what Chinese suppliers did in the milk incident – they watered down the milk, then added melamine to boost the apparent levels of protein during food tests.

But there’s no good way to cover up a dishonest penny-saving method for long. Somewhere, somehow, people are going to find out. Consumers are quickly becoming aware and more wary of cost-cutting measures that may affect not only their pockets but also their health and well-being in the long run. And with the way news travels these days, once a business is exposed, it will be very easy for the company to lose everything in no time at all.

If there’s one lesson to be learned from the milk scandal, it is that businesses, whether B2B or B2C, should be ever vigilant to ensure that quality raw materials and consistent manufacturing processes are used in accordance with the highest industry standards. Getting the right certifications and approvals may require some investment, but these are necessary expenditures that should be made without consideration.

Because, should the time come when consumers are affected and the news breaks, it’ll be too late and no use then crying over spilled milk.

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