Awarding Destination Iceland campaign to M&C Saatchi UK leads to a lawsuit

In Iceland, like elsewhere, authorities have reacted in diverse ways to the negative economic impact of COVID-19. Amongst projects included in the government’s a stimulus packages aimed at protecting jobs and businesses in the country’s all-important tourism industry, was the funding of a 300 million ISK marketing project for Íslandsstofa, Promote Iceland. That project is now at the centre of controversy, media debate and a lawsuit.

“We can view this decision from different angles and the conclusion is always the same; it is a sad and bitter one for Iceland’s creative industries to swallow. Especially at a time when we are all encouraged to protect Icelandic jobs, choose Icelandic goods and services and the marketing campaign in question is one of the government’s measures to react to the economic aftermath of COVID-19. But it is being awarded to a foreign company that is under investigation by tax authorities and the decision is made on the difference of 0,82 points (out of 100) between the foreign and the Icelandic agency, says Halla Helgadóttir, Managing Director at the Iceland Design Centre in a recent article in JONAA. Helgadottir is one of many who have voiced their opinion in Icelandic media abut the matter.

The foreign agency in question is M&C Saatchi UK, covered multiple times in recent months by The Financial Times, The Guardian and other media for “accounting fraud and misstatements” totalling some £11.6m. 

A statement by Íslandsstofa (Promote Iceland) reads that Íslandsstofa was not made aware of the financial investigation of M&C Saatchi by authorities in the UK and apparently neither was the Central Public Procurement Office in Iceland, which handles all public and EU tenders. That office is now being sued by Pipar/TBWA and Pipar Media ehf, the Icelandic advertising agency that came second. 

Read more here: Arctic Travel – Promoting Iceland Becomes A Legal Dispute

Photograph: JONAA©Agust Runarsson