Definitions

Compass Group

Compass Group

Compass Group plc a British company, is the largest food service business in the world. It provides catering services to many types of institutions, for example schools, hospitals, prisons, airports, companies and resident healthcare homes. It is listed on the London Stock Exchange and is a member of the FTSE 100 Index. It is headquartered in Chertsey, Surrey to the south west of London.

History

The business has its origins in a company founded by Jack Bateman in 1941 as Factory Canteens Limited. It was acquired by Grand Metropolitan in 1960. A management buy-out followed in 1987 when the Compass Group was formed. It was first listed on the London Stock Exchange in 1988.

Operations

The Compass Group owns the following brands and businesses: Eurest, Bon Appétit Management Company, Restaurant Associates, Morrison, Scolarest, Eurest Support Services (ESS), Crothall, Levy Restaurants, Canteen Vending, Medirest, Chartwells, and Keith Prowse Corporate Hospitality.

It also operates many franchises of outlets such as Burger King, Caffè Ritazza, Starbucks and Upper Crust.

The United Nations corruption scandal

The Compass Group was involved in a corruption scandal with its subsidiary Eurest Support Services winning contracts to provide food to United Nations peacekeepers in Liberia. The value of Compass’s food contracts with the United Nations is valued at $237 million, with renewals and add-ons that could reach $351 million.

Alexander Yakovlev (UN procurement) 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 in bribes from Compass.

Competitors Es-Ko and Supreme Foodservice AG have 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. Federal investigations are underway and the case has been referred to the Serious Fraud Office (UK).

After its own three-month internal investigation, Compass 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, Andy Seiwert and Doug Kerr. Compass refused to make public its investigation and did not name any other individuals involved beyond those already fired, so the true level of corruption within Compass is unclear. However, Compass’s CEO Michael Bailey has stepped down in June 2006 and has been replaced by an outsider to the catering industry, Richard Cousins.

Overcharging scandal

Compass through its subsidiary Eurest Support Services is involved in the scandal of overcharging its services to the US Government in Iraq as are many other government contractors, including Compass' competitor, France-based Sodexho.

References

External links

Competitors

  • Aramark
  • Sodexo
  • Fine Host
  • Granada Group PLC
  • HDS Services
  • Elior SA

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