Tax criticism damages multinational brands

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Accusations of tax avoidance have damaged the brand rating of Starbucks, Amazon and Google according to an annual poll

YouGov and BrandIndex have said that all three multinationals have failed to recover from damaging headlines and criticisms over the corporations tax payments.

The annual research places businesses according to positive and negative impressions from thousands polled through the year, with each company then given a score.

Amazon, which held the top spot in 2011, fell to third, whereas Google dropped out of the top ten altogether after being in fourth top place last year.

Starbucks was accused of making over £3bn in UK sales since 1998, but paying less than 1% in corporation tax. MPs criticised Google in August for paying £6m in tax after UK revenues of £396m, and Amazon has come under fire after allegedly generating sales of more than £3.3bn in the UK last year but paying no corporation tax on any of the profits.

Starbucks offered a voluntary payment of £20m this month following boycotts at the coffee chain, whereas Google's chief executive gave a robust defence, saying he was proud of the UK tax plan.

BrandIndex director Sarah Murphy said, "Amazon had a score of 32.1 last year, so a fall of eight points is a statistically significant drop for them. What we'd attribute that drop to would be the recent tax avoidance debate."

She said despite Amazon and Google also being accused of using offshore tactics to cut their tax bill, initially only Starbucks had suffered from the revelation that it had paid just £8.6m in corporation tax in 14 years. "Google up until last week were not as badly impacted because it's not something you overtly purchase, unlike Starbucks, but clearly they have suffered. Until now, Google have always been one of the strongest brands we track," she said.

Pollsters questioned a different set of 2,000 people every day about a whole range of corporate brands, asking whether they had heard anything positive or negative through advertising, the media or word of mouth to calculate a daily score, based on the percentage balance of people reporting hearing good against bad news. Topping the 2012 poll was the BBC iPlayer, followed by John Lewis.

Apple's reputation also took a hit, with anger over its new mapping software, an underwhelming iPhone 5 launch and protracted legal battles with rival Samsung.

Among supermarkets, Tesco performed the worst, suffering from a run of bad news that began with its first profit warning for 20 years. In December it admitted defeat in the US and prepared to pull out of its Fresh & Easy venture.

 

Helen Roxburgh

 

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  • Comment by Benny Latlhang

    I guess no crime goes unpunished..

  • Comment by Christie Malry / FCAblog

    BrandIndex are very good at promoting their *own* brand but I don't think their methodology is robust. Amazon is still the go-to destination for virtually all products online; Google remains invaluable for its free search, e-mail, maps, calendar, music, office software, news, RSS reader and more; and you'll see long queues in every Starbucks you pass. Instead of believing what people have told BrandIndex they believe, take a look at what they actually believe based on what they *do*. This is "revealed preference" and is always the best way to work out what people honestly believe. You'll see that these big brands have barely been dented by the tax controversies.