The following article is based on my own interpretation of the said events. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.
Anindya Kumar Saha, MBA 2015-17, Vinod Gupta School of Management, IIT Kharagpur
Mars the third-largest private company in the US generated a global revenue of US$33 billion in 2015. Mars has recalled chocolate products from 55 countries a few days ago. It comes following the incident of a customer in Germany finding plastic in a Snickers bar. After the plastic was traced back to the Mars factory in Veghel, Netherlands. Products affected include bars of Mars, Milky Way, Snickers, Celebrations and Mini Mix, according to a statement issued on Tuesday by the company.
A statement from Mars Incorporated said only products labelled with “Mars Netherlands” were affected. Mars Netherlands spokesperson said: “We cannot be sure that this plastic was only in that particular Snickers. We do not want any products on the market that may not meet our quality requirements, so we decided to take them all back.”
While it a good move by Mars to recall the chocolates affected so that it does not keep products in the market which fall below it’s quality requirements , they are facing ridicule on social media and their customers are concerned. Overall, Mars has about a 12% share of the west European chocolate market.
The reputational damage will lead to drop in sales in short and mid term , apart from the financial cost that will be incurred for the recall. With the Easter coming this is not a great time for such a mishap. But for Mars competitors like Mondelez, Nestle this gives them an opportunity to increase their market share and build on it’s competitors slip up.