Compass Group

Compass Group plc
Public limited company
Traded as LSE: CPG
Industry Conglomerate
Founded 1941 (1941)
Headquarters Chertsey, Surrey, England, United Kingdom
Area served
 Worldwide
Key people
 Sir Roy Gardner (Chairman)
Richard Cousins (Chief Executive) Garner replaced by Paul Walsh 2014 http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/10131961/Paul-Walsh-named-chairman-of-caterer-Compass.html
Services Foodservice, facility management, cleaning, service vouchers
Revenue £17,843 million (2015)[1]
£1,261 million (2015)[1]
£877 million (2015)[1]
Number of employees
 500,000 (2016) [2]
Website www.compass-group.com

Compass Group plc is a British multinational contract foodservice, cleaning, property management and support services company headquartered in the Compass House in Chertsey, Surrey.[3] It is the largest contract foodservice company in the world and has operations in over 50 countries.[4] It serves around 4 billion meals a year in locations including offices and factories, schools, universities, hospitals, major sports and cultural venues, mining camps and offshore oil platforms.[5]

Compass Group is listed on the London Stock Exchange and is a constituent of the FTSE 100 Index.

History

Origin

Compass Group has its origins in a company which was founded by Jack Bateman in 1941 as Factory Canteens Limited and which subsequently became known as Bateman Catering.[6] Bateman Catering and Midland Catering were acquired by Grand Metropolitan in 1967 and 1968 respectively[6][7] and a management buy-out from Grand Metropolitan followed in 1987 when the Compass Group was formed.[6][7]

Public listing

Compass Group was first listed on the London Stock Exchange in 1988.[6] Eurest, one of the company's US subsidiaries, was launched in the USA in 1996 to provide dining services to local, regional and national companies within the business and industry markets, including employee dining centers, on-site catering, vending, executive dining rooms, and other managed services.[8]

Corporate growth

Compass Group purchased Morrison Management Specialists and then merged with Granada plc as part of a planned strategy to separate the media and catering interests of the latter. The two companies demerged in February 2001 to form Compass plc and Granada Media.[6] It had become the world's biggest catering firm by 2005.[9]

Compass Group then sold its roadside and travel catering businesses for a combined £1.82 billion in April 2006.[6] The transaction included the sale of 43 Moto motorway service areas to Australia's Macquarie Bank for an estimated £600 million.[6] Compass's Select Service Partners (SSP) travel concessions business was sold to companies controlled by private equity firm EQT Partners, for an estimated £1.2 billion.[6]

Compass Group PLC made further acquisitions in 2009, including Kimco and Lackmans in the USA, Plural in Germany and the retail franchises for several McColls retail site leases in the UK.[1]

Association with UN and Armed Forces

Compass Group's subsidiary ESS became a UN-registered food vendor in 2000 and then won contracts to supply UN peace-keepers operating in Sudan, East Timor, Liberia, Burundi, Eritrea, Lebanon, Cyprus and Syria.[9][9] The company bought Morrison Management Specialists in 2000 and in July of that year the company merged with Granada plc as part of a strategy to separate the media and catering interests of the latter. The two companies demerged in February 2001 to form Compass plc and Granada Media.[6]

ESS was contracted by the U.S. Marine Corps, the 82nd Airborne Division, the British Ministry of Defence, the Coalition Provisional Authority, along with the major defense contractors Fluor, RMS, Bechtel, and most notably KBR (a subsidiary of Halliburton) under the U.S. Army troop support contract called LOGCAP III to provide dining and construction services at desert bases and encampments in Kuwait.[10] and Iraq[10] from the start of operations in 2003 to 2006.[10]

Reorganization

In 2011, Morrison Management Specialist was re-organised into three sectors (Morrison Healthcare, Morrison Senior Living, Touchpoint Support Services). Then in 2013 the Czech branch of Eurest was listed as one of the “100 Best Czech Companies” in 2013.[11] The company also acquired Integrated Cleaning Management in 2013.[12]

Operations

Eurest's corporate logo.
  • Eurest Support Services (ESS) is the subsidiary specializing in harsh-environment/large-scale food service and facilities management. Its primary clients are military forces and other security services, UN conferences and some Blue Beret army rations, major defense contractors, and construction, mining, the UN and oil exploration and production facilities worldwide.[8][26][27][27][28][29]
The Integrated Cleaning Management Ltd company logo.

Criticisms of Compass Group

2005 United Nations misconduct incident

ESS became a UN-registered food vendor in 2000 and then went on to win contracts to supply UN peacekeepers operating in Sudan, East Timor, Liberia, Burundi, Eritrea, Lebanon, Cyprus and Syria.[9]

In 2005, subsidiary Eurest Support Services won contracts to provide food to UN peacekeepers in Liberia, valued at $237 million.[9][36][37]

In November 2005, Compass sacked the head of its UK division and two other employees as the investigation continued.[38] Compass said staff members had been dismissed but did not officially say how many.[39]

The investigation was conducted by law firm Freshfields and accountants Ernst & Young and overseen and ultimately by the chairman of Compass’ audit committee, Steve Lucas.[38][39]

The UN suspended Compass in October 2005 after allegations of contract bidding irregularities. It is alleged that ESS may have improperly obtained confidential information concerning a three-year contract to supply food and water to UN peacekeepers in Liberia.[38] ESS's poor performance on a food contract to provide rations to peacekeepers in Burundi was also looked in to before it lost the contract.[9]

The scandal broke after former HIC official and former procurement officer Alexander Yakovlev was arrested on suspicion of conspiracy, wire fraud, money laundering and related issues.[40][41] The Russian[9] official Alexander Yakovlev, the UN procurement officer, and Vladimir Kuznetsov, head of the UN Committee for Administrative and Budgetary Issues, were arrested and indicted after taking nearly $1 million[9] in bribes from Compass.[36]

In a separate UN investigation into the oil-for-food program hand found that Mr Yakovlev was guilty of fraudulent conduct. He subsequently pleaded guilty to criminal charges of both wire fraud and money laundering relating to claims he had taken $1m in bribes from companies doing business with the UN.[9]

The rivals firms who made the allegations were Es-Ko and Switzerland's[9] Supreme Foodservice AG[9] in bribes from Compass.[9][36] Officials initiated lawsuits claiming violation of the Racketeer Influenced and Corrupt Organizations (RICO) Act, the Sherman Antitrust Act and New York State's Donnelly Act regulating free trade.[42] Federal investigations are underway and the case has been referred to the Serious Fraud Office (UK).[43] The lawsuits are for the two compeditors who are claiming a total of £600m in damages, against Compass in March 2006 alleged that Compass had tried to rig the awarding of UN contracts for United Nations peace keepers across the world, worth in excess of $350m (£188m) world.[9] The long-running dispute is centered on the allegations that five senior executives at a Compass subsidiary, Eurest Support Services (ESS), bribed a UN official to win the contracts.[9]

After its own £5m,[9] three-month internal investigation, Compass had declared it had discovered "serious irregularities" in its UN business, but that these were limited to "only a few individuals" who were dismissed: Peter R. Harris,[9] Andy Seiwert and Doug Kerr.[36] Mr Harris, who by then was the head of the group's British, Middle East and African division at this point.[9] While Compass refused to make public its investigation,[36] CEO Michael Bailey stepped down in June 2006. The subsidiary Eurest Support Services was soon restructured and reformed along a new business model.[38]

The corruption allegations were also referred to the UK's Serious Fraud Office[38] a criminal investigation by US federal prosecutors[9] and wider investigations into UN procurement by both the Southern District Court of New York, the US Congress and the UN.[39] Compass had agreed by October 2006 to pay to up to £40m to settle 2 lawsuits brought against it for allegedly bribing a UN official to win catering contracts.[9] Compass Group did not admit any legal liability and paid a confidential settlement in the region of £40m.[9]

The chief executive of Compass Group, Richard Cousins, was quoted as saying: "We believe it is in the best interests of the business and shareholders, and good management, to avoid the uncertainties and costs associated with prolonged litigation. My focus is on the future and this settlement is a major step in putting the matter behind us."[9]

Canadian Prisons

The supplier of food to seven of Ontario's correctional facilities, Eurest Dining Services, informed the Halton Regional Health Department that some samples taken during routine surveillance had tested positive for Listeria monocytogenes on November 21, 2008. Dr. David Williams, Ontario's acting chief medical officer of health later commented on the issue.[8][26][26][27]

New York Schools

Compass USA settled for $18 million on its overcharging on school meals.[44]

February 2013 horse meat scandal

On 7 February 2013, it was revealed by the Food Standards Agency that the Findus beef lasagne range in the UK, France and Sweden and the shepherd's pie and moussaka ranges in France contained horse meat without proper declaration or official scrutiny.[45][46] Findus, Compass Group, Whitbread, Brewers Fayre and Premier Inn were indicted for illegally selling concealed horse meat in food products.[47] Compass Group had sold it to 47 Lancashire schools and a "small number" of schools in northern Ireland.[47]

In a public letter later that day, 11 firms, including Tesco and Asda, said they shared shoppers' "anger and outrage".[48] Whitbread vowed to remedy the unacceptable situation on 26 February 2013.[49] The Food Standards Agency's (FSA) chief executive, Catherine Brown also said "it is unlikely we will ever know" how many unwittingly ate horsemeat.[50]

April 2015 Exploiting US Senate kitchen staff

On 22 April 2015 the Compass Group was accused of underpaying their employees in the US Senate's kitchen.[51]

Chartwell's, Compass USA subsidary, pays $19 million in whistleblower case[52]

Southern DHB

In 2016, the Southern DHB (District Health Board) in New Zealand received numerous complaints about the quality of the food being served at Dunedin Hospital,[53] where a 15-year contract was controversially awarded to Compass Group in 2015,[54] replacing the hospital's local kitchen in an effort to keep costs down.

Major competitors

Compass Group's major competitors include Aramark and Sodexo.

References

  1. 1 2 3 4 "Annual Report 2015" (PDF). Compass Group. Retrieved 20 March 2016.
  2. ↑ "CPG.L Profile | COMPASS GROUP Stock - Yahoo! UK & Ireland Finance". Uk.finance.yahoo.com. Retrieved 20 March 2016.
  3. ↑ "Compass: Talk to us". Compass-group.com. Retrieved 2013-06-01. "Compass House Guildford Street Chertsey Surrey KT16 9BQ UK"
  4. ↑ Meikle, James (30 July 2009). "Compass bans 69 endangered fish species from its restaurants". The Guardian (UK). Retrieved 27 August 2010.
  5. ↑ "Compass Annual Report 2011" (PDF). Compass Group PLC. Retrieved 8 March 2012.
  6. 1 2 3 4 5 6 7 8 9 "Compass Group Timeline". Caterer Search. Retrieved 9 March 2014.
  7. 1 2 "Competition Commission Report 1983" (PDF). Retrieved 18 April 2011.
  8. 1 2 3 4 "Compass USA". Retrieved 9 March 2014.
  9. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Add answer (2006-10-16). "Compass settles UN catering lawsuits | Business | guardian.co.uk". Guardian. Retrieved 2013-06-01.
  10. 1 2 3 Waxman's statement Archived 23 October 2009 at the Wayback Machine.
  11. ↑ "Eurest". Eurest.cz. Retrieved 2013-06-01.
  12. 1 2 3 4 5 6 "Specialist Provider of Cleaning Services: Retail, Leisure, Hotel & Commercial". Integrated Cleaning Management. Retrieved 2013-06-01.
  13. ↑ "Compass Group UK Jobs Site". Jobs.compass-group.co.uk. Retrieved 2013-06-01.
  14. ↑ "The Willow Glen Resident | America Fresh". Svcn.com. 1999-07-07. Retrieved 2013-07-22.
  15. ↑ "Contact Us". Bon Appétit. Retrieved 21 September 2014.
  16. ↑ "BAMCO Foundation - Bon Appétit Management Company". Bamco.com. Retrieved 2013-07-22.
  17. ↑ "DeltaFM". Compass-group.com.au. Retrieved 2013-08-19.
  18. ↑ "Why Partner with Omega". Compass-group.com.au. Retrieved 2013-08-25.
  19. ↑ "Rapport - specialist high quality front of house services". Rapport.eu.com. Retrieved 2013-06-01.
  20. ↑ "Restaurant Associates | Compass Group | UK". Compass Group. Retrieved 2013-07-22.
  21. ↑ "VSG. Security Services in Ireland and the UK". Vsg.co.uk. Retrieved 2013-06-01.
  22. ↑ Compass Group brands Archived 21 June 2008 at the Wayback Machine.
  23. ↑ Pphibbs (16 February 2011). "Compass Group Australia brands". My.compass-group.com.au. Retrieved 18 April 2011.
  24. ↑ "Our services". Compass Group. Retrieved 2013-06-01.
  25. ↑ "Trim Trax". Retrieved 9 March 2014.
  26. 1 2 3 4 "Possible listeria exposure in Ontario jails". CBC News. 23 November 2008. Retrieved 19 January 2012.
  27. 1 2 3 4 "Eurest USA". Retrieved 9 March 2014.
  28. ↑ "Support Services". Retrieved 9 March 2014.
  29. ↑ "Business | Compass finds UN 'irregularity'". BBC News. 2006-02-01. Retrieved 2013-06-01.
  30. ↑ "Retail". Medirest.co.uk. 2013-04-20. Retrieved 2013-07-22.
  31. ↑ "A Plus". Medirest.co.uk. 2013-04-20. Retrieved 2013-07-22.
  32. ↑ "MV2". Medirest.co.uk. 2013-04-20. Retrieved 2013-07-22.
  33. ↑ "Pulse". Medirest.co.uk. 2013-04-20. Retrieved 2013-07-22.
  34. ↑ "Why trusts should think seriously about patient hotels". Health Service Journal. 17 September 2014. Retrieved 21 October 2014.
  35. ↑ http://www.14forty.co.uk/about-14forty-1440-compass-group
  36. 1 2 3 4 5 "UN Procurement Scandal: how far did the inside information travel?". Fox News. 10 February 2006. Retrieved 18 April 2011.
  37. ↑ "The stolen secret documents" (PDF). Fox News. Retrieved 18 April 2011.
  38. 1 2 3 4 5 "Compass finds UN 'irregularity'". BBC News. 1 February 2006. Retrieved 19 January 2012.
  39. 1 2 3 Seawright, Stephen (1 February 2006). "Compass investigation finds 'serious irregularities'". The Telegraph. Retrieved 19 January 2012.
  40. ↑ This Is Money (2006-02-07). "Compass faces fresh grilling on UN scandal". This is Money. Retrieved 2013-06-01.
  41. ↑ "Compass faces fresh grilling on UN scandal". This is Money. 7 February 2006. Retrieved 19 January 2012.
  42. ↑ "Court documents" (PDF). Fox News.
  43. ↑ "SFO to investigate Compass allegations". BBC News. 24 November 2005. Retrieved 18 April 2011.
  44. ↑ "A.G. Schneiderman Announces $18 Million Settlement With Compass Group USA For Overcharging NYS School Lunch Programs | www.ag.ny.gov". www.ag.ny.gov. Retrieved 2016-05-02.
  45. ↑ "Aimez-vous les lasagnes au cheval roumain?". 2013-02-10 lemonde.fr
  46. ↑ "Food safety watchdog may report Findus".2013-02-10 thelocal.se
  47. 1 2 "Horsemeat scandal: Supermarkets 'share anger and outrage'". 15 February 2013. Retrieved 31 January 2015.
  48. ↑ "BBC News - Horsemeat scandal: Supermarkets 'share anger and outrage'". BBC News.
  49. ↑ "Whitbread makes food pledge after horsemeat scandal". the Guardian.
  50. ↑ "BBC News - Horsemeat: Compass and Whitbread find horse DNA in products". BBC News.
  51. ↑ "I am a cook in the US Senate, but still need food stamps to feed my children". theguardian.
  52. ↑ "D.C. schools food vendor pays $19 million to settle whistleblower lawsuit". Washington Post. Retrieved 2016-05-02.
  53. ↑ "Two dozen complaints over 'disgusting' hospital food". RNZ. 2016-04-07.
  54. ↑ "Southern DHB will outsource hospital kitchens". RNZ. 2015-05-07.

External links

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