Amway UK announced recently that it is being taken to trial by government authorities because of the way that ABO’s (Amway Business Owners) were promoting the business opportunity. In response to early criticism from the government, Amway UK instituted its own moratorium on signing up new distributors and did not renew the contracts of some very high level ABO’s who it felt were part of the problem.
Mr. DeVos and Mr. VanAndel wrote an open letter, found below, to explain the situation and that Amway will fight all the charges in court. A loss for Amway could result in the immediate shutdown of operations in the UK.
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To: Global Directors and above
From: Steve Van Andel and Doug DeVos
Subject: UK update
Date: November 9, 2007We have important news from the U.K. that we want to share with you.
Despite recent, far-reaching reforms we have made to the UK market, the UK Department for Business Enterprise and Regulatory Reform has chosen to take the company to trial in London later this month.
We disagree vehemently with that decision and will defend the case vigorously on behalf of the 106 employees and 12,000 Amway Business Owners who have built the business since we opened the market in 1973.
Many of you know the background on this matter. Over a yearlong period, DBERR (formerly called the DTI) conducted an investigation of Amway UK, as well as sales organizations operating in the market, and took issue with the way some IBO organizations were promoting the business. Amway was criticized for not taking decisive action to correct the misrepresentations.
Since that time, UK and Amway Europe staff have worked tirelessly to address BERR’s complaints – and in the process, reinvented the UK business almost from the ground up. We have also initiated a global review of business practices to make sure we operate under the highest standards possible in all our markets.
Our self-imposed UK changes – which included steps like suspending BSM sales, a sponsorship moratorium and terminating or sanctioning IBOs – were comprehensive and difficult, but we made them without hesitation. After a terrifically successful September relaunch, we are on the right track to grow in a sustainable way, featuring a balanced business that works for ALL our ABOs and IBOs.
We have also taken a strong stance with the sales organizations, including refusing to renew the contracts of some leaders who would not endorse our reforms.
The fact is, in the wake of this sobering experience, every one of us – employees, IBOs, and others – should renew our commitment to hold ourselves to the highest standards of behavior. The marketplace – and in the UK, the government – has made it clear that they expect no less. And when falling short of those standards exposes our company to such grave risk, there can no longer be any such thing as “business as usual.”
So you can see how seriously we have taken this matter. But still – despite these serious and significant changes – the BERR believes the best solution is to close us down in the UK. That is unwarranted and unnecessary and we will fight it in court with all our energy.
Please share this memo with employees and IBOs at your discretion. We will keep you updated on developments, either in emails or on the Amway Media Blog, http://amwaynews.alticorblogs.com. In the meantime, reach out to your friends in the UK and let them know we stand behind them.
We have faced significant challenges before. We are ready for this one.
Steve and Doug
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It’s very interesting to note that Amway UK has existed since 1973 and has only 12,000 ABO’s. That does not sound like a successful operation to me. It is also interesting to note that a potential negative ruling in the UK could have drastic repercussions in other parts of the world that Amway operates and result in more government interventions.
The focus seems to be on the sale of Business Support Materiels (BSM’s) and poor sponsoring tactics. Quixtar terminated diamonds Orrin Woodward and Chris Brady for that very same reason here in the US and has terminated several UK diamonds who operated a successful BSM business, International Business Systems, alongside their Amway businesses. I think at this point Quixtar and Amway are shooting the very hands that feed them. These individuals represent and directly influence the levels of growth the company experiences and without BSM’s I think you will see Alticor’s number of ABO’s and level of product sales fall. The fact is, Amway and Quixtar do not have an adequate motivational system to retain people in the business, and their new rollout of an Amway University is not going to do the trick.
Already, Quixtar’s decision to change its name back to Amway in the next couple of years is looking like a strategic nightmare. The UK situation will only add to the negative connotations that the Amway name is associated with here in the United States and will not make it any easier for the new ABO’s to market the Amway products or business opportunity successfully.
[tags]amway, uk, quixtar, alticor, shaun carter, doug devos, steve vanandel, orrin woodward, chris brady, jerry scriven, dave butler, pat gregory, abo, ibo, international business systems, team, team of destiny, network marketing, united kingdom[/tags]
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