Avon caught in a bribery scandal
Avon's bribery door shows no signs of abating. Following the dismissal of Charles Cramb, vice chairman of Avon Group last month, on February 14, it was reported that the US Department of Justice submitted new evidence to the grand jury of the federal court for the Southern District of new york, proving that Avon violated the US Foreign Corrupt Practices Act.
Avon will announce the fourth quarter results of fiscal year 20 1 1 at 9: 00 am on February 14. Zacks, an American investment institution, predicted that Avon's net profit per share was 0.5 1 USD, down 17.39% from 0.59/USD in the fourth quarter of last year.
Avon's performance in China may be even worse. In 20 10, Avon's sales in China were $229 million, and its net loss was 108 million. Avon's third quarterly report shows that in the first three quarters of 20 1 1, sales in China continued to drop sharply by 24%.
For all this, Avon insiders told reporters: "So far, our external caliber is still that the decline in performance is the price after our comprehensive transformation of direct selling business." Avon said it could not comment on the latest development of bribery.
China people recognize foreign brands and are willing to pay a high price. How to turn China brand into an international brand needs to be improved. From the recent Avon bribery incident, we once again realize that China brand's awareness of crisis public relations is weak, and we will wait and see how China brand will go to the international market!
Avon whirlpool
Since June 5438+00, 2008, Avon has launched an internal investigation into violations. According to an official investigation in the United States, Avon has been involved in bribing officials in China since 2005.
On July 26th, 2006, Avon Company obtained the first direct selling license in China. According to the US survey, Avon won the first place for giving gifts to government officials and other illegal activities. Avon's internal investigation was subsequently launched. According to the Wall Street Journal, by the end of 20110, the two-year investigation had cost Avon1500,000 dollars.
With the deepening of the investigation, the exposure of the problem gradually increased. 20 1 1 In May, Avon China President Gao, Chief Financial Officer JimmyBeh, Sun Changqing in charge of corporate affairs, and rossetter, head of global internal audit of Avon, who was the chief financial officer of Asia Pacific, were dismissed. The reasons are all related to bribery in China market.
The departure of Charles Cramb pushed Avon's bribery drama to a climax, and the timely appearance of new evidence seemed to indicate that the inside story was about to be finally exposed. The Wall Street Journal first reported Avon's new evidence, but did not disclose the content of this evidence.
The above Avon person said: "The emergence of new evidence in the United States will not affect the normal internal investigation of the company." According to the performance of direct selling enterprises in China in 20 10 published by china health care association, Amway, which obtained the direct selling license in July 2007, topped the list with US$ 3.2 billion, followed by companies such as New Era, Tiens and Perfect. Avon, which made $229 million in China, stands out among the five companies.
20 10 on may 7th, Avon issued Avon China direct sales development statement to dealers, cutting off the original channels of dealers and specialty stores and turning to full direct sales. The above-mentioned person pointed out: "At this stage, we are still in the period of performance improvement. In the fourth quarter of last year, Avon began to make a profit. "
Avon originally expected that the company's business transformation would take effect at the beginning of 20 12, but judging from the performance forecast, it is difficult to calm the downward trend of performance in the short term. Under the pressure of performance, Ms. Andrea Jung, CEO of Avon Company, was forced to announce his resignation on February 201kloc-0/65438 and became the executive chairman of the board of directors. But at present, Ms. Andrea Jung is still the CEO. Avon was originally the beneficiary of direct selling, but it was repeatedly frustrated in the specific operation.
In fact, as early as 1998, Avon, Amway, Perfect, etc. 10 companies had already obtained the qualification of "store+salesman" to sell products, which is very similar to the direct selling in the present sense. After the promulgation of the Regulations on Direct Selling Management in 2005, Avon implemented this model and became the direct reference for the Regulations on Direct Selling Management.
The biggest difference between Avon model and Amway model is that it eliminates the "multi-level direct selling" model, which is close to pyramid selling, so it was recognized by the Ministry of Commerce and got the first direct selling license.
In September 2008, Deng Zhan, the former deputy director of the Foreign Investment Management Department of the Ministry of Commerce, who promoted direct selling, was exposed and was finally sentenced to fixed-term imprisonment of 12 years. There are some subtle connections between Avon, the first license, the direct selling regulations and Deng Zhan's bribery of 2.22 million yuan. A month after Deng Zhan's fall, Avon launched a long-term self-examination.