Regional brands damaged by Catalan referendum, says report

While 2017 is over, its many tumultuous events remain fresh in the mind. From disasters to scientific breakthroughs to a move towards global gender equality, perhaps one of the most reported-on events was another referendum. When, on October 1, the people of the Catalan region voted for overall independence from Spain, the vote was declared illegal. This has not, however, stopped the people of Catalan protesting their right to democracy. It has also not prevented a growing negativity towards the region’s place brand, and its associated companies.

Located on the northeast coast of the Iberian Peninsula, the Catalan region is home to the popular destinations of Barcelona, Girona, Lleida, and Tarragona. Yet, according to a report released in December by London-based reputation consultancy the Reputation Institute, the ongoing crisis surrounding the referendum has increasingly adverse consequences on perceptions of business in the region.

Based on over 4,000 ratings from interviews with the Spanish public concerning 41 companies all present, founded, headquartered or manufacturing in the region, the Reputation Institute found that 23% of non-Catalan Spaniards had stopped buying products from Catalonia. A further 21% claimed that, while current purveyors of Catalan goods, they too may cease buying them in the future – both figures are claimed to be as a result of the post-referendum ‘crisis.’

“The Catalan vote has dominated headlines throughout the world for some time now,” says James Bickford, managing director at Reputation Institute. “With the Spanish and Catalan people displaying strong emotions in relation to the vote, it is interesting to note that businesses have experienced a major fallout. Our research has revealed a clear gap between the Spanish public’s support for companies that are ‘on their side’ and for those that are not.”

Yet, continues Bickford, the currently fractious environment across both Europe and the world is a potential factor behind these surprising figures. Fuelled by partisan media and governmental condemnation, rhetoric is charged – this might not necessarily extend to customer brand decisions. “In this explosive environment, it is vital that organisations communicate cautiously, making decisions based purely on business reasons,” says Bickford. “International companies communicating in Spain at this difficult time must be sensitive to the situation and carefully consider the impact their communications can have.”

Companies are already responding, however. Toll roads and telecommunications company Abertis, natural gas and utility company Gas Natural Fenosa, financial services companies CaixaBank and Banco Sabadell, to name but a few, have moved headquarters from Catalonia in response to the crisis. This is perhaps wise, considering the survey also highlights how the average reputation score of companies associated with the Catalan region has fallen by 2 points.

With the survey highlighting that Catalonian independence could lead to the boycott of Catalan-produced goods by 49% of the population and equate to €20 billion, it is clear the vote could do severe damage to the region. And for Bickford and the Reputation Institute, the potential impact of the referendum on the Spanish country brand, Catalan brand and its associated regional brands is stark. “The outcome of the Catalan vote must be treated as a reputational risk in the short, medium and long term, and planning should be in place to accommodate this,” he says.

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