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Media Myth: Nine Worst Business Stories

Some of the toughest obstacles American businesses face come not from other companies

or the economy, but from the media – journalists exaggerating an issue to make a story
sexier or anti-business groups influencing the media to advance their agenda. Four of the
stories on the following list started with a press release or report from an environmentalist
group, labor union or “consumer group.”
 
Those exaggerations or manipulations resulted in lost jobs, lost revenue, unfounded
health scares, unnecessary government intervention, and even deaths. The Business &
Media Institute has compiled a list of the nine worst business stories (of the last 50
years). 

9.  Food Lion Accused of Repackaging Meat

On Nov. 5, 1992, ABC’s Diane Sawyer teased a “Primetime Live” investigation “into
charges customers at the nation’s fastest-growing grocery chain don’t always know what
they’ve been sold.”  
 
The ensuing report aired undercover footage of Food Lion workers repackaging old meat
and other perishables with new expiration dates.
 
Food Lion was at the time the fastest growing grocery store chain in the nation, having
implemented a revolutionary business model based on wholesale purchasing and
distribution to its stores. But Sawyer accused the company of being so driven by profits
that it neglected health concerns in order to sell tainted meat.
 
The report didn’t note that state inspection records gave Food Lion average sanitation
marks, according to a Nov. 30, 1992, Washington Post report by media critic Howard
Kurtz, who questioned the use of undercover cameras.
 
Amidst numerous lawsuits filed against ABC over the report, Food Lion alleged that
footage was manipulated, staged and not representative of normal business practices at
the stores. In reviewing the 45 hours of videotape taken during the investigation, Food
Lion representatives said the report “was not supported – indeed, was contradicted – by
the footage it had,” an Aug. 30, 1995, Washington Post article said.

As the Media Research Center reported at the time – based on a report in The New
Republic – the 45 hours of hidden camera footage showed “a combination of staged
events and selective editing to fit a pre-conceived story line and systematically fabricate a
story to deceive the public.”
 
It turned out that the report was part of an intense union-backed campaign to discredit the
non-unionized chain. The United Food and Commercial Workers Union put ABC in
touch with many of its sources for the report and helped producers secure jobs at Food
Lion stores by providing references.
 
The Los Angeles Times reported on earlier UFCW tactics against Food Lion in
September 1992, when the union accused Food Lion of child labor and overtime pay
abuses, which resulted in a $16.2-million penalty levied against the chain by the
Department of Labor.  
 
The union tried another approach in 1994, when in February of that year The Washington
Post wrote about a report accusing the company of selling expired baby food.
 
In her introduction, Sawyer insisted that Food Lion workers were “hard-working people
who care about their jobs, but what this report will show is the kind of thing that can
happen when the pressure for profit is great and you break the rules.” Despite Sawyer’s
note of appreciation for individual employees, the workers were the ones who suffered in
the story’s fallout.
 
The chain announced plans to close 88 unprofitable stores and open 40 to 50, amounting
to a loss of at least 33 stores in the two years after the report, according to the April 19,
1994, Wall Street Journal. Food Lion had opened as many as 100 new stories in previous
years.

Food Lion reported a 55-percent drop in fourth-quarter profit after the report aired,
according to the March 1, 1993, Washington Post. The company’s stock lost almost half
its value, and revenues fell 2.6 percent in 1993.
 
In 1996, a federal grand jury in Greensboro, N.C., found ABC guilty of trespassing and
fraud for the report. The case didn’t hinge on the journalistic merits of undercover
reporting, but on the fraud used by producers to obtain jobs and the illegal taping inside
stores without the company’s permission. Food Lion was awarded $5.5 million, but the
verdict was eventually overturned.  
 
ABC stuck by its story. Even though Food Lion challenged the veracity of the claims
made in the report, ABC News President Roone Arledge in 1997 maintained that “the
fact of the matter is the broadcast was true.”
 
The company gradually regained its footing and began reporting strong revenues again in
1994, but the story affected hundreds if not thousands of workers who lost their jobs in the aftermath of the investigation. UFCW still doesn’t list Food Lion as one of its
unionized stores.

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8. Oprah’s Beef with BeefReport: “Oprah” – April 6, 1996Story: Oprah Winfrey’s daytime talk show featured a segment on mad cow disease in which an industry opponent suggested the U.S. beef supply was at risk for contamination. Winfrey famously said it “stopped [her] cold from eating another burger.” Impact: Cattle futures plunged the day after the show aired, which pundits called the “Oprah crash.” A group of Texas cattle farmers sued Winfrey for $12 million. 

 

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7. ‘Dateline’s' Exploding TrucksReport: NBC “Dateline” – Nov. 17, 1992Story: "Dateline” reported General Motors trucks were at risk for exploding in side-impact collisions due to the placement of fuel tanks, and used footage of a fiery crash to illustrate the risk.Impact: Numerous lawsuits were filed against GM. It was later revealed that NBC had rigged the demonstration by placing ignition devices near the gas tank.

 

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6. Rolling Jeeps

Report: CBS “60 Minutes” – Dec. 21, 1980Story: Based on a study from the Insurance Institute for Highway Safety, CBS “60 Minutes” reported that Jeeps were at unusually high risk for rollovers, using dramatic images of rolling Jeeps with dummy passengers flying out of the vehicles.Impact: Jeep sales plummeted 65 percent by 1981, and the rollover stereotype is still parroted by other media. However, it was revealed that the IIHS study got only eight rollovers in 435 tests and that the conditions were hardly “normal.” 

 

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5. Silicone Breast Implants Report: CBS “Face to Face” – Dec. 10, 1990Story: Connie Chung reported that silicone breast implants were leading to a variety of dangerous side effects, including flu-like symptoms, extreme fatigue, fevers, hair loss, “bizarre skin rashes” and tissue disease.Impact: The FDA partially banned silicone implants in 1992. Manufacturers were sued for billions of dollars, and Dow Corning filed for bankruptcy in 1995 as a result. But the FDA lifted the ban in November 2006, calling silicone “safe and effective.” | 

 

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4. Accelerating Audis

Report: CBS “60 Minutes” – Nov. 23, 1986Story: “60 Minutes” reported that several models of vehicles, especially the Audi 5000, were prone to sudden acceleration that had resulted in numerous injuries and deaths.Impact: Audi sales fell from 74,000 in 1985 to 23,000 in 1988. Lawsuits sought upwards of $5 billion and analysts suggested the backlash was so bad, Volkswagen should consider pulling Audi from the U.S. market. A 1989 National Highway Traffic Safety Administration report attributed the crashes to “pedal misapplication,” not a manufacturing defect. 

 

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3. Wendy’s Finger Food

Report: ABC “Good Morning America” – March 24, 2005Story: A California woman claimed to have found a severed finger in a bowl of Wendy’s chili. Various broadcast media outlets reported the story.Impact: Wendy’s reported a drop in sales across the country, including 20-to-50-percent losses in the San Francisco area where the story broke. At least 20 “copycats” claimed to find everything from fingernails to chicken bones in their own food between the original reports and the revelation that the woman had staged the incident so she could sue Wendy’s. 

 

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2. Alar-ming Apples

Report: CBS “60 Minutes” – Feb. 26, 1989Story: Based on a study from the leftist Natural Resources Defense Council, “60 Minutes” reported that a chemical used on apples caused cancer. Impact: Apple prices dropped more than 18 percent in the months following the report. The U.S. Department of Agriculture bought out $9.5 million worth of unsold apples to keep farmers afloat, and apple growers sued CBS and NRDC. The segment is now known as one of the most overblown food scares in journalism’s history. 

 

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1. DDTReport: Various – Beginning in 1962Story: Based on the claims of environmental activist Rachel Carson, various media reported dangers posed by the pesticide DDT. Reports attributed massive bird and fish deaths to DDT. The New York Times reported pesticides were being found in stillborn babies, and one report claimed it was “seriously affecting man through sex organ changes.”Impact: The federal government eventually banned DDT, and its use was severely limited worldwide. In 1970, the National Academy of Sciences reported DDT had prevented “500 million deaths due to malaria that would otherwise have been inevitable” in the previous two decades. In the face of high malaria rates in the third world, the World Health Organization reinstated DDT in 2006.