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Overview of activities, risk factors
2.7 Risk factors
DANONE
REGISTRATION DOCUMENT 2015
26
RISK IDENTIFICATION
RISK MONITORING AND MANAGEMENT
Risks associated with health and the positioning
of certain products
In the event that certain of Danone's products (including
recipes/formulas or certain active ingredients) presented as
having nutritional or health benefits or positioning proved to be
harmful in the short or long term or had no health effects, then
Danone's activities, results and reputation could be adversely
affected to an even greater extent since Danone's strategy is
based on the development of products with a strong nutrition/
health component.
In addition, the food industry must deal with the growth in
obesity while consumers, medical professionals and govern-
mental organizations are increasingly concerned about the
resulting public health consequences. Although Danone has
a large portfolio of product lines enabling it to offer a wide
variety of products meeting the various needs and changing
tastes of consumers, local governments could take actions
against the food industry, such as imposing surtaxes or more
stringent regulation on the advertising of certain products.
Such actions could adversely affect not only Danone's results
but also its reputation.
Consumers health lies at the core of Danone's history and
mission of “bringing health through food to as many people
as possible” and Danone's strategy in the nutrition and health
area is consistent with the guiding principles set by health
authorities in the respective countries and is formalized in
Danone's Food Nutrition Health Charter. In implementing this
strategy, Danone pays close attention to scientific fundamen-
tals, the regulatory environment and the origin of ingredients
used through organizations, actions and procedures that it
implements, such as:
•
the Research and Development strategy and organization,
which are described in section 2.5
Other elements related
to Danone's activity and organization
;
•
thedevelopment of partnershipswith internationally renowned
scientific organizations and an ongoing dialogue with public
health authorities and consumer associations;
•
the establishment of an internal procedure to ensure the
consistency, credibility and scientific foundation of health
and nutrition claims that are disseminated in its commu-
nications (see section 5.2
Information concerning Danone's
social, societal and environmental performance in compliance
with the Grenelle II law
relating to
Fair trade practices
).
Danone also pays close attention to risks “perceived” by consu-
mers such as obesity. Tomonitor this risk, Danone has developed
a network of key contacts (including, in particular, consumer
associations) in order to discuss common topics of concern in
both a formal and informal manner and to offer clarifications.
Further information is presented in sections 2.3
Strategic
growth areas
, 2.5
Other elements related to Danone's activity
and organization
and 5.2
Information concerning Danone's social,
societal and environmental performance in compliance with the
Grenelle II law
.
Other general risks associated with Danone's
image and reputation
In addition to the aforementioned risks linked to its products,
Danone is exposed to criticisms of all types and origin, whether
well-founded or not and whether in good or bad faith, that could
affect its image and reputation. Danone may therefore face
negative publicity that could result froma risk situation, or even
a simple allegation, concerning its activities, its brands or its
practices in commercial affairs or its societal responsibilities
toward its suppliers. The media publicity of such criticisms,
whether they are founded or not, is facilitated by the introduction
of new technologies and the development of social networks,
which can amplify the impact considerably.
Such events could adversely affect Danone's image and have
repercussions on sales, activities, results and growth prospects.
In order to limit the risk of criticism, Danone has developed
governance rules and best practices – which are communicated
to the subsidiaries – notably with respect to (i) business conduct,
(ii) societal responsibility toward suppliers, (iii) relations with
local communities, and (iv) ethics. In order to ensure that these
rules and best practices are communicated and followed, Danone
has integrated the subsidiaries' assessments with respect to
these rules and best practices into its Danone Way approach.
Further information is available in sections 5.1
Danone social,
societal and environmental approach
, 5.2
Information concerning
Danone's social, societal and environmental performance in
compliance with the Grenelle II law
, and 6.4
Internal control and
risk management
.
Danone has also established procedures to manage (i) risks
so as to avoid and anticipate potential crisis, and (ii) crisis in
order to prevent the spread and scope of such criticisms and
to limit their impacts as much as possible