| Tue 1 Jul 2003, 13:26 | | Blackmail fails to knock Pick 'n Pay's share price |
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Blackmail fails to knock Pick 'n Pay's share price
July 1, 2003
By Nicky Smith
Johannesburg - The blackmailing of Pick 'n Pay was not the first time this type of crime had been committed in South Africa, intelligence experts said yesterday.
Warren Goldblatt, the chief executive of Associated Intelligence Network (AIN), a commercial crime and business intelligence consultancy, said that a few years ago his company had been hired to investigate a similar type of threat to a large food producer.
Sean Summers, the chief executive of Pick 'n Pay, said the three goods that had been targeted by the extortionist - No Name Portuguese sardines, Choice garlic flakes and Lucky Star pilchards - had been returned in small volumes.
Analysts had expected the share price to take a knock in trade today, but as one analyst remarked, this type of publicity could actually cause the market to rally around the brand.
This was borne out by the strengthening of Pick 'n Pay's share price to R13.60 at the close of trade, after touching an intraday low of R13 - a far cry from its year low of R11.50.
The non-cyclical services sector strengthened slightly overall, climbing 0.98 percent to 9809.97 points.
Goldblatt said: "In my view, in dealing with a kidnap or random type scenario, the perpetrator actually wants the money.
"If they were sickos, they would just poison people."
Summers said the group had increased security in its stores, but it was not overly concerned with its supply chain security in light of this attack because it had not been supply chain oriented.
Peter Richer, the head of operations in Africa for Kroll Incorporated, an international risk consultancy, said extortion cases in South Africa were usually more about revenge than about making money
.
Richer said he knew of at least 10 instances in this country when food contamination had been used for extortion.
"Most cases are hoaxes and can be contained very quickly," he said. "What I have seen of Pick 'n Pay's response, they seem to be handling this responsibly. But you never know what has been going on in the background."
The best practice in this type of scenario, Goldblatt said, would be to contact the police immediately and to hire a company that did work similar to that of AIN.
Usually this type of crime was not reported publicly, because companies tried to avoid encouraging criminals from imitating the crime.
Goldblatt said it was best practice to negotiate with blackmailers only for the purpose of tracking them down quickly.
"If you pay them and you don't track them down, they will do it again as soon as the money runs out," he said.
Roelf Venter, the marketing director for the Spar Group, said the group had never been held to ransom in this way.
In his 20 years in the retail industry this was the first time he had ever heard of this type of threat to a retailer.
"We had discussions this morning and we have issued a general notification to all our staff to be more vigilant when receiving stock and to check that there is no tampering," Venter said.
Richer said this type of extortion was more prevalent in Europe: "Food is a favourite for this type of blackmail."
Summers said Pick 'n Pay was covered by insurance, but to what extent he did not know.
Shoprite would not comment on whether it had ever been blackmailed.
