Compass Group

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Compass Group plc
Type Public limited company
Traded as LSECPG
Industry Support services
Founded 1941
Headquarters Chertsey, Surrey, England, United Kingdom
Area served Worldwide
Key people Sir Roy Gardner (Chairman)
Richard Cousins (Chief Executive)
Services Foodservice, facility management, service vouchers
Revenue £17.557 billion (2013)[1]
Operating income £1.238 billion (2013)[1]
Net income £0.437 billion (2013)[1]
Employees 507,000 (2014) [2]
Website www.compass-group.com

Compass Group plc is a British multinational contract foodservice 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[edit]

Origin[edit]

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[7] and a management buy-out from Grand Metropolitan followed in 1987 when the Compass Group was formed.[6]

Public Listing[edit]

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 & Industry markets, including employee dining centers, on-site catering, vending, executive dining rooms, and other managed services.[8]

Association with UN[edit]

Compass Group's subsidiary, 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] 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]

Compass Group became the World's biggest catering firm by 2005.[9] Meanwhile 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 and Iraq from the start of operations in 2003 to 2006.[10]

In April 2006 Compass Group sold its roadside and travel catering businesses for a combined £1.82 billion.[6] The transaction included the sale of 43 Moto motorway service areas to Australia's Macquarie Bank for an estimated £600m.[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] The company made further acquisitions in 2009 including Kimco and Lackmans in the USA, Plural in Germany and several McColls retail site leases in the UK.[1]

Reorganization[edit]

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 10 of the “100 Best Czech Companies” in 2013.[11] The company also acquired Integrated Cleaning Management in 2013.[12]

Operations[edit]

Eurest's corporate logo.

Compass Group owns the following brands and businesses: All Leisure Hospitality, Bon Appétit Management Company, Canteen Vending, Best Vendors Management, Chartwells, Crothall, DeltaFM, Eurest, Eurest Support Services (ESS), Keith Prowse Corporate Hospitality, Levy Restaurants, Medirest, Morrison Management Specialists, Omega Security Services, Rapport, Restaurant Associates, Scolarest and Vision Security Group (VSG).[13][14] It also does cleaning, housekeeping, waste management, building operations, maintenance, gardening and outdoor services for schools and educational facilities to world-class HSEQ standards.[15]

Compass Group operates several owned brands including Trattoria Pizza, Mondo Subs, (UK & USA) Grab&Co Food to go and Spice of Life (UK Hospitals) as well as operating Costa Coffee, Subway, Papa John's Pizza, Chick-Fil-A and Starbucks under license. Compass Group also operates several owned service systems including Steamplicity, and Trim Trax.[16]

Eurest (or Eurest Services) which operates in 80 countries, providing staff restaurants and supplying vending machines for businesses. Eurest is a $1.3 billion food and vending organization with more than 15,000 associates throughout the US, and is a division of NC-based Compass Group North America. In North America the company is known as Eurest Dining Services.[17] It was bought out in the early 2000s. As of 2005 the then 50 year old firm employed 15,500 people in 1,850 sites, in 80 nations. Eurest is one of the world's most respected and successful corporations, including many of the Fortune 500.[8]

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, major defense contractors, and construction, mining, the UN and oil exploration and production facilities worldwide.[18]

The Integrated Cleaning Management Ltd company logo.

Integrated Cleaning Management is a major UK and Irish retail, leisure, health club industry, hotel and commercial cleaning firm[12] with 10,000 staff and 5,000 contracts.[12] It sponsors the U.K.'s Springboard Charity Event.[12]

Criticisms of Compass Group[edit]

2005 United Nations misconduct incident[edit]

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][19][20]

In November 2005, Compass sacked the head of its UK division and two other employees as the investigation continued.[21] Compass said staff members had been dismissed but did not officially say how many.[22]

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.[21][22]

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.[21] 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.[23][24] 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.[19]

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][19] 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.[25][26] Federal investigations are underway and the case has been referred to the Serious Fraud Office (UK).[27] 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.[19] 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,[19] CEO Michael Bailey stepped down in June 2006. The subsidiary Eurest Support Services was soon restructured and reformed along a new business model.[21]

The corruption allegations were also referred to the UK's Serious Fraud Office[21] 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.[22] 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[edit]

The supplier of food to 7 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.[17]

Major competitors[edit]

Compass Group's major competitors include Aramark and Sodexo.

References[edit]

  1. ^ a b c d "Annual Report 2013" (PDF). Compass Group. Retrieved 9 March 2014. 
  2. ^ "CPG.L Profile | COMPASS GROUP Stock - Yahoo! UK & Ireland Finance". Uk.finance.yahoo.com. 2012-12-31. Retrieved 9 March 2014. 
  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. ^ a b c d e f g "Compass Group Timeline". Caterer Search. Retrieved 9 March 2014. 
  7. ^ "Competition Commission Report 1983" (PDF). Retrieved 18 April 2011. 
  8. ^ a b "Compass USA". Retrieved 9 March 2014. 
  9. ^ a b c d e f g h i j k l m n o p q r s t Add answer (2006-10-16). "Compass settles UN catering lawsuits | Business | guardian.co.uk". Guardian. Retrieved 2013-06-01. 
  10. ^ Waxman's statement[dead link]
  11. ^ "Eurest". Eurest.cz. Retrieved 2013-06-01. 
  12. ^ a b c d "Specialist Provider of Cleaning Services: Retail, Leisure, Hotel & Commercial". Integrated Cleaning Management. Retrieved 2013-06-01. 
  13. ^ Compass Group brands[dead link]
  14. ^ Pphibbs (16 February 2011). "Compass Group Australia brands". My.compass-group.com.au. Retrieved 18 April 2011. 
  15. ^ "Our services". Compass Group. Retrieved 2013-06-01. 
  16. ^ "Trim Trax". Retrieved 9 March 2014. 
  17. ^ a b "Possible listeria exposure in Ontario jails". CBC News. 23 November 2008. Retrieved 19 January 2012. 
  18. ^ "Support Services". Retrieved 9 March 2014. 
  19. ^ a b c d e "UN Procurement Scandal: how far did the inside information travel?". Fox News. 10 February 2006. Retrieved 18 April 2011. 
  20. ^ "The stolen secret documents" (PDF). Fox News. Retrieved 18 April 2011. 
  21. ^ a b c d e "Compass finds UN 'irregularity'". BBC News. 1 February 2006. Retrieved 19 January 2012. 
  22. ^ a b c Seawright, Stephen (1 February 2006). "Compass investigation finds 'serious irregularities'". The Telegraph. Retrieved 19 January 2012. 
  23. ^ This Is Money (2006-02-07). "Compass faces fresh grilling on UN scandal". This is Money. Retrieved 2013-06-01. 
  24. ^ "Compass faces fresh grilling on UN scandal". This is Money. 7 February 2006. Retrieved 19 January 2012. 
  25. ^ "Court documents". Fox News. 
  26. ^ "Court documents". Fox News. 
  27. ^ "SFO to investigate Compass allegations". BBC News. 24 November 2005. Retrieved 18 April 2011. 

External links[edit]