JEDDAH, 9 March 2004 — The opening shots in an advertising battle that could seriously damage business credibility in Saudi Arabia were recently fired on a bridge in Jeddah. “T-board” signs contracted by LG Electronics, the Korean industrial giant, mysteriously disappeared overnight. They were replaced by those advertising a rival Korean giant, Samsung.
On Madinah Road at the flyover crossing Tahlia Street, the change of advertising is evident. “Until today,” said S.M. Arshad, deputy general manager for LG Electronics in Jeddah, “we were unable to reveal the name of the other advertiser. However, we now have hard evidence; the signs are now in place and there for all to see.”
Team Young and Rubicam, who sub-contracted a local supplier to manufacture and fix the signboards to street lighting poles, discovered their removal on a routine inspection.
“The supplier broke the agreement with Team Advertising and took some important signboards down from the bridges,” said Arshad. “We have discovered that the agreement was broken because another manufacturer of the same national origin has lured the local supplier into breaking the agreement for LG signs in order to capitalize on these prime locations.”
Arshad expressed deep concern over the action. “It is not just a local issue,” he told Arab News yesterday. “If local suppliers make a firm contractual agreement with an international company only to be seduced into breaking it by inducements from another, it seriously affects the perceptions of outside investors who might be considering doing business in the Kingdom.”
Arshad confirmed that LG had instituted legal procedures against the suppliers and would pursue the matter vigorously. “This is a reminder that companies may forget business ethics when it comes to money.”
Fadi Karim from Team Young and Rubicam told Arab News that the suppliers with whom the contract was signed had undergone a recent change of management. “When the new management took over, they decided simply to cancel the contract already signed with Team Young and Rubicam and go with Samsung,” he said.
Arab News attempted to contact the agency responsible for the signboards. Repeated telephone calls went unanswered.
The agent for Samsung in Jeddah was invited to comment — but the individual allegedly responsible for advertising was either “unavailable “ or “out of the office” and at the time of going to press had failed to respond or make any comment.
