Wednesday, March 7, 2007

Afghan-TimHortons files / suing ----- good grief!

Tim Hortons files suit in Kandahar coffee row
KEITH McARTHUR, Globe and Mail / CTV March 7

Tim Hortons Inc. alleges its brand — one of the most valuable in Canada — has been damaged by “false and misleading” news coverage of its efforts to serve coffee and dutchies to soldiers in Afghanistan.

The company is suing CanWest Global Communications Corp., Standard Radio Inc. and broadcaster Bill Carroll for $105-million in general and punitive damages, over reports that Tim Hortons received almost $4-million in government subsidies to set up the Kandahar outlet.

It's unclear from the lawsuit whether the government paid anything to help set up the Kandahar franchise. And Wednesday, Tim Hortons refused to comment on whether taxpayer dollars were used.

Tim Hortons is looking for $25-million in general damages plus $10-million in punitive damages from each of CanWest, Standard and Mr. Carroll, who has a show on Toronto radio station CFRB.

“As a result of the publications and broadcast, the plaintiffs have and will in the future suffer damage to their trade name, brand and commercial reputation,” Tim Hortons says in its statement of claim.

None of the allegations has been proven in court.

Standard Radio chief executive officer Gary Slaight Wednesday referred questions about the lawsuit to Pat Holiday, general manager of CFRB, who declined to comment. A CanWest spokeswoman also declined to comment on the suit.

The suit alleges that on Oct. 31, CanWest reported on its websites and its Global National news program that nearly $4-million in taxpayer dollars were used to open the Afghan coffee shop.

The next day, Mr. Carroll referred to the CanWest report on his show on Standard's CFRB station, and again in a segment on Global National, the statement of claim alleges.

“Tim Hortons has been sliding by on all the great publicity about the Kandahar franchise all these months and then Global uncovers the dirty little secret. . . . You and I, the taxpayers, are picking up $4- or $5-million a year so they can look good to the public. . . . Shame on Tim Hortons,” he said, according to the statement of claim.

Tim Hortons alleges that the combined inference in the news reports is that it entered into an “improper or immoral” arrangement with the federal government, that it misled the public about the government's involvement and that it is a bad corporate citizen.

Tim Hortons said it has asked for apologies or retractions, but none has come.

A story published in several media outlets in late November appears to suggest that the government did help pay to set up the Kandahar franchise, but that the $4-million figure in the initial Global report was based on estimated, not actual, costs.

The story quoted a spokeswoman for the Department of National Defence who said the “incremental cost” for the first year was estimated to be $1.2-million.

In a recent survey of 1,000 corporate executives by the Strategic Counsel and Cundari SPF, Tim Hortons was judged to be Canada's best-managed brand by 38 per cent of respondents, more than any other brand.

And in a study released last summer, global brand consultancy Interbrand calculated that Tim Hortons was Canada's sixth most valuable brand, worth $1.9-billion.