Product Extortion

Whether intentionally or negligently caused – once damages occur, it is difficult to control the consequences. But prevention options are certainly available.

There are hardly any reliable statistics on product extortion. The only reliable indicator is experience in this field, which suggests a high number of unreported cases. Essentially, the more renowned the brand is, the more likely it is to become a target of product extortion.

How To React To Product Extortion?

• Ignore?
• Negotiate?
• Pay?
• What if the media find out?
• Do we have insurance?

These are questions that should be answered before a product extortion case even occurs. If the right decisions are made from the beginning, there is a good chance that the product extortion will stop and just peter out. The decisive factor for how an extortion will run its course is generally the motive behind it. Perpetrators are not always professional or well-organized blackmailers concerned with ecological or extremist demands. Disgruntled employees, copy cats, individuals in debt, or even the mentally ill are all possible categories of perpetrators. The main motive in most cases is still (ransom) money, which today is often demanded in the form of digital currency such as Bitcoin.

Extortion affects not only companies in the food industry, but all companies manufacturing or selling goods. The fallout can range from health impairments of consumers, the spread of damaging information in social media, litigation from injured parties, sanctions by regulatory agencies, loss of reputation due to adverse media coverage, and many more.

Prevention Options

Every case of product extortion must be analyzed and considered individually.

It can not only be life-threatening for consumers but also be an existential danger for the affected company. By using existing procedures combined with proven crisis scenarios, the consequences of extortion can be mitigated. Crisis management should define scenarios, set up a crisis team and crisis communication.

Approach:

• Risk analysis of business processes
• Identification of “crown jewels” and risk assessment
• Development of crisis management together with crisis communication
• Adequate insurance coverage

Crisis management trainings help to test and improve existing processes.