Reckitt Benckiser deal puts agencies on alert

By KAREN YATES, campaignlive.co.uk, Friday, 30 July 1999 12:00AM

Roster agencies are gearing up for a major review next year as the Dutch-owned Benckiser beds down its merger with its UK counterpart, Reckitt & Colman.

Roster agencies are gearing up for a major review next year as the

Dutch-owned Benckiser beds down its merger with its UK counterpart,

Reckitt & Colman.



The merger of the two companies, which have a combined annual adspend of

pounds 25 million in the UK, will create the world’s biggest household

products company, with an annual turnover of more than pounds 3

billion.



In the frame for an agency review are McCann-Erickson, which handles

Reckitt’s cleaning brands such as Dettol and Harpic, and Euro RSCG,

which works on over-the-counter remedies such as Lemsip and Disprin.

WCRS and Roose & Partners handle Benckiser’s brands in the UK. Media

groups coming under the spotlight will be Universal McCann, OMD and

Carat.



Analysts said that although Reckitt is almost twice the size of

Benckiser, the Dutch group looks likely to emerge as the dominant force

in the new group. Benckiser has been more successful and aggressive than

Reckitt, and its chief executive will head the new set-up. Reckitt’s

group director of global marketing, Philip Darnton, is to leave and is

not expected to be replaced. Instead, it is likely someone from

Benckiser will take on his responsibilities.



The good news for agencies is that Reckitt Benckiser has announced that

cost savings will enable it to increase its adspend by 25 per cent.

Benckiser has historically devoted more money to advertising than its

new partner, spending more than 10 per cent of revenue, according to

some estimates, compared with Reckitt’s 6-8 per cent.



A spokesman said it was too early to know which brands and agencies the

new company would retain. He said the merger will be completed by the

end of September, after which there will be an internal review of

everything from staffing arrangements to brands and agencies.



Reckitt Benckiser confirmed it will focus on five core categories and is

likely to shed its non-international brands and non-core activities.



The five core areas are: fabric care, including brands like Vanish;

surface care, such as Lysol; health and personal care; dishwashing

products such as Finish; and homecare, including such brands as AirWick

and Haze.



Over the past 12 months, Benckiser has spent pounds 9.3 million on

advertising in the UK, and Reckitt around pounds 15 million, according

to MMS.



This article was first published on campaignlive.co.uk

X

You must log in to use Clip & Save

Before commenting please read our rules for commenting on articles.

If you see a comment you find offensive, you can flag it as inappropriate. In the top right-hand corner of an individual comment, you will see 'flag as inappropriate'. Clicking this prompts us to review the comment. For further information see our rules for commenting on articles.

comments powered by Disqus

Additional Information

Campaign Jobs