brands under fire

Apple CEO Defends Tax Strategy, Attacks US Tax Code in Testimony with Senate Panel

Posted by Mark J. Miller on May 21, 2013 03:52 PM

Apple CEO Tim Cook was in Washington, D.C. Tuesday to go before the Senate Permanent Subcommittee on Investigation, which is accusing the huge corporation of avoiding paying US taxes.

Sure, Apple paid about $6 billion in taxes to the US government last year and, according to, “already pays $1 out of every 40 tax dollars the U.S. collects,” but according to the committee, Apple has been stashing billions in offshore accounts in Ireland, where the company had reportedly negotiated a tax rate below 2 percent. One of the Irish subsidiaries is known as Apple Operations International, which has no employees but posted $30 billion in income from 2009 to 2012, the Committee reports. 

"We are proud to be an American company, and we are equally proud of our contributions to the U.S. economy," Cook told the panel. While the company was lauded for its technilogical and economic contributions to the US, Sen. Carl Levin told the panel that "Apple executives want the public to focus on the U.S. taxes the company has paid, but the real issue is the billions in taxes it has not paid, thanks to offshore tax strategies whose purpose is tax avoidance, pure and simple," the L.A. Times reports.Continue reading...

brands under fire

Bangladesh Victims Yet to See Compensation as Governments Pressure Compliance

Posted by Sheila Shayon on May 21, 2013 12:54 PM

Fortunately, the issues brought to light by the recent horrors in Bangladesh are not disappearing from the headlines. Unfortunately, those who are culpable are not acting swiftly enough.

What little consensus has emerged from the rubble of a collapsed eight-story factory, which claimed over 1,120 lives, underscores the fact that public-private collaboration is vital to enact the sweeping reforms required for real change rather than corporate social responsibility campaigns. Major retailers including Walmart, Gap, JCPenney and Sears have yet to sign the proposed fire and safety agreements, while Walmart, like the wolf guarding the hen house, said it will monitor its 300-plus Bangladeshi suppliers itself. However, H&M, along with 30 other international retailers committed to the $3 billion fund to improve the safety of garment factories in Bangladesh.Continue reading...

brands under fire

Hyundai Looks to Put Mileage Misstep Behind It, but Lawsuits Still Linger

Posted by Dale Buss on May 20, 2013 01:39 PM

Hyundai is reportedly close to settling 38 federal lawsuits filed after it overstated the fuel economy of its cars. Such a turning point might suggest a grand statement by the brand seeking to sweep that nasty episode behind Hyundai for good with a hearty mea culpa.

But just as Hyundai marketing stewards have done from the beginning of this shameful interlude that began in November, they're making sure they communicate primarily with the offended parties—Hyundai owners—instead of with the general public. Hyundai simply continues to carry out the remedy it came up with last fall of an apology to those owners, changing of internal procedures about estimating mileage, and a reimbursement to its customers consisting of debit cards for gasoline purchases to help make up for the mileage they "lost," around $88 for each year they've owned the vehicle with overstated mileage.

"We're focusing on the owners," Steve Shannon, CMO of Hyundai of America, told brandchannel. "We think we're doing the right thing. Every day a certain number of [reimbursement chits] come in and we send them a debit card, and the owners tend to be very pleased with the fairness of the settlement."Continue reading...

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brands under fire

Investors Speak Out Against US Retailers Over Refusal of Bangladesh Reform

Posted by Alicia Ciccone on May 17, 2013 05:47 PM

It turns out that angry consumers aren't the only ones that American retailers need to worry about. In a joint statement published Thursday, a group of investors sought out to express their dissatisfaction with US retailers that have refused to sign the Bangladesh fire and safety agreement.

The release, undersigned by Amalgamated Bank Longview Funds and 14 others said, "We expect companies in our portfolios to ensure the integrity of their supply chains." The group, which reportedly holds a combined $1.35 trillion in assets, called out both Walmart and Gap, two major US retailers who spoke out against the accord, advising them to act swiftly and effectively in agreeance with the legally-binding proposal, which was signed by over 30 international companies by its May 15 deadline. 

The response is a reaction to the late-April factory collapse in Savar, Bangladesh that has now claimed over 1,120 lives. The accord, which is a version of a previously proposed agreement that was in effect turned down by several US retailers in 2011, hopes to protect the millions of Bangladeshi people that work in the country's 5,000 garment factories, for as little as $38 per month. The industry, now the second largest garment producer next to China, has seen a surge in recent years, resulting in the creation of faulty building sites and poor labor conditions. The circumstances surrounding the collapse of the Rana Plaza factory highlight the shortcomings of an industry built on loose ethics and fast, inexpensive turnaround. While the agreement looks to enforce independent building inspections and fire and safety training, it also hopes to create a more open administrative atmosphere for workers to present their concerns.Continue reading...

brands under fire

Feds Target Bitcoin as Future of Virtual Currency Becomes Uncertain

Posted by Sheila Shayon on May 16, 2013 06:14 PM

Just as BitPay raises $2 million from the Founders Fund, Federal officials have seized Bitcoin funds belonging to Dwolla, the website that serves as an exchange for the virtual currency. 

It’s the first intervention by the government against the online money system garnering increased attention as Immigration and Customs Enforcement froze the accounts of Mt. Gox, the world’s largest Bitcoin exchange that receives funds from Dwolla. One Bitcoin is currently worth about $110, up from $13.50 at the start of the year. Federal law requires money transmission services to register with the Treasury Department's Financial Crimes Enforcement Network (FinCEN) and Mt.Gox had not complied, leaving president and CEO Mark Karpeles facing up to five years in prison.

Washington has been eyeing the Japanese start-up since it hit the mainstream radar in 2011 when a report by Gizmodo explained in detail how the mostly-anonymous currency could be used to be illegal drugs over the internet. The report prompted Sen. Charles Schumer, D-N.Y., to call for its shut-down as an "online form of money laundering."Continue reading...

brands under fire

As Deadline Expires, Walmart, Gap Under Fire for Refusing to Sign Bangladesh Agreement

Posted by Sheila Shayon on May 16, 2013 05:38 PM

As the May 15 deadline has come and gone to sign the IndustriALL-backed Bangladesh safety agreement, the abscence of a number of US brands has become even more apparent as more than 30 international retailers have agreed to the terms defined by international labor organizations to ensure the repair and future maintenance of Bangladesh's growing garment industry. Last month, Rana Plaza, an eight-story factory employing mostly young women collapsed, killing 1,127 people.  

While American clothing brands and retailers have been actively involved in the ensuing dialogue, the only two to sign the agreement by the deadline were PVH (which owns the Calvin Klein, Tommy Hilfiger and Van Heusen brands) and Abercrombie & Fitch, while Walmart and Gap publicly declared their opposition to the plan

To date, the list of signatories includes: Abercrombie & Fitch, Aldi, Benetton, C&A, Carrefour, El Corte Ingles, Esprit, G-Star, H&M, Helly Hansen, Hess Natur, Inditex (Zara's owner), jbc, KiK New Look, Lidl, Loblaws on behalf of its Joe Fresh and Primark brands, Mango, Marks & Spencer, Mothercare, N Brown Group, Next, PVH, Rewe, Sainsbury's, Stockmann, Switcher, Tchibo, Tesco and WE Europe.Continue reading...

brands under fire

Vietnam Boycotting Coca-Cola Over Taxes—Or Is It?

Posted by Abe Sauer on May 16, 2013 10:43 AM

Coca-Cola is killing Vietnam's children. That's the takeaway message of a video that is part of a boycott movement against the world's most famous, most successful soda maker. But is Vietnam's anti-Coca-Cola consumer movement all state-sponsored fizz and no substance?

Even after the war was over and the troops had left, news stories used the presence of Coca-Cola as an example of persisting American influence in Communist Vietnam. "Girlie Magazines and Coca-Cola Still In Vietnam" read the headline from a May 1975 Associated Press story. Sadly, two decades did not make the press much more sensitive. "Coca-Cola Invades Vietnam" read the Nov. 18, 1994 Albany Herald headline announcing Coke's official return to selling in the nation.

During the post-war US embargo, Coca-Cola was still widely available in Vietnam, brought in from neighboring nations. Thanks to this make-do distribution system, Coke claimed a majority of Vietnam's soft drink market even before it officially returned to bottling in the nation. But for the last several years, Coke's success has become a sore spot for Vietnamese consumers who suspect the brand is cheating the nation out of tax receipts—and a new boycott is aiming to do something about it.Continue reading...

brands under fire

While Supreme Court Grants Monsanto a Win, a New App Can Help Consumers Boycott

Posted by Mark J. Miller on May 15, 2013 06:35 PM

Three companies control most of the seed business in the world and one of them is Monsanto, the Missouri-based agricultural company infamous for producing genetically-modified crops and genetically-engineered seeds. The company's resistant seeds were of top concern in a recent patent lawsuit against an Indiana farmer. Not surprisingly, the Supreme Court came down on the independent farmer and declared Monsanto a win. 

The farmer, Vernon Hugh Bowman, purchased Monsanto soybean seeds that are resistant to weed killer and planted them one year. It was his actions after that year that got him into trouble. “Bowman v Monsanto revolved around what Bowman contended was a legal loophole in his license agreement with Monsanto: farmers are allowed to sell the second-generation seeds to grain elevators, which, in turn, are permitted to sell a mixture of undifferentiated seeds as ‘commodity grain,’” Forbes reports. “In other words, he maintained he was legally allowed to buy Monsanto’s seeds cheaper from a grain elevator rather than directly from the company.”Continue reading...

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