Synovate ponders controversial $1.5m Sudan deal

July 2, 2011

Synovate, the research arm of Aegis Group now being exclusively courted by Ipsos, should be careful who it does business with. Particularly at a time like this.

Word reaches me that it has recently been pitching for a lucrative $1.5m slice of pie in Northern Sudan. The client in question is DAL Group, a Khartoum North-based conglomerate which handles such august brands as Caterpillar, Mitsubishi Motors, KIA Motors, Mercedes-Benz, JVC, Glaxo, Unilever and, most interesting of all (see below), Coca-Cola (since 2002 DAL has been sole Sudanese bottler and distributor of the company’s brands).

DAL Group makes claim to “strong, clear business principles and ethical values”, and I have no reason to doubt it. The problem lies elsewhere. Since 1997, the US has placed a stringent trade embargo on Sudan, with penalties for infringement ranging up to $1m and 20 years imprisonment.

From what I understand, these sanctions can be circumvented by routing the business through the EU (where they are not in force). But leading the business from the US, which seems to be what is required here, would be tricky. The idea has certainly been enough to put the wind up WPP’s Kantar – believed to be the only other research company on the short-list – which withdrew from the pitch after it failed the corporate ethics test.

My advice to Synovate? It’s not worth it.

Mind you, when it comes to ethics, Synovate’s suitor Ipsos isn’t exactly above reproach itself. It recently came to my attention that the global research company is being investigated by the Brazilian authorities over suspected infringements of employment law and, in effect, tax evasion. Ipsos is quietly trying to settle some 82 claims against it, after the Labour Prosecutor Office began an investigation into the treatment of many local employees as long-term freelances, a by-product of which is the avoidance of taxes and social benefits attached to full-time status. There’s more on this here, for anyone whose Portuguese is up to speed.

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