Child abuse allegations: ‘The Läderach brand has been badly damaged’

Has Läderach's star lost a bit of its shine? © Keystone / Christian Beutler

Swiss chocolate-maker Läderach is in damage limitation mode after allegations of child abuse at a religious school co-founded by the company’s former boss. How serious is the problem?

Jürg Läderach, 72, who ran the family business until 2018, co-founded the evangelical school “Domino Servite” (Serve the Lord) in Kaltbrunn in canton St Gallen in 1995. In a documentaryExternal link published on Thursday by Swiss public television, SRF, former pupils talked about being beaten with belts – including by Läderach himself – and living in a climate of fear.

Two days later the Zurich Film Festival said its partnership with Läderach was over. The SRF documentary had “shaken everyone up”, the film festival said in a statementExternal link. After an “open exchange”, the festival and chocolate company had “jointly decided to end their partnership”.

Jürg Läderach, who denies the allegations, handed over the management of the chocolate company five years ago to his eldest son, Johannes, who also attended the school, now called the Christliche Schule Linth, and whose own children are currently pupils. An external investigation commissioned by the school two years ago, following initial enquiries by SRF, confirmed the misconduct of former teachers and members of the religious community.

On Thursday Johannes Läderach sent a letter to business partners, seen by SWI swissinfo.ch, stressing that the current generation running the company had “no ties whatsoever to the church” and that his parents were no longer involved in the company. “We kindly ask you to judge the company on the performance of the current generation and the now 1,800 employees,” he said.

In an interviewExternal link on Sunday with the SonntagsZeitung, Johannes Läderach said he totally condemned what had happened at the school. “It goes against everything I believe in and everything that is important to me,” he said.

That was the best thing he could have done in the situation, according to brand expert Stefan Vogler, who said Johannes Läderach had distanced himself from the abuse credibly. “That’s emotionally difficult, especially when it involves your father,” Vogler told newspaper 20MinutenExternal link on Monday.

‘Toxic combination’

However, things aren’t looking good, according to reputation expert Bernhard Bauhofer.

“The Läderach brand has been badly damaged and is closely associated with the family name. That’s a toxic combination,” he told newspaper BlickExternal link.

As the Zurich Film Festival pointed out, “although there are no accusations against the current management of Läderach, the suffering of the alleged victims is nevertheless associated with the family and company name. With this decision, we would like to ensure that the festival focuses solely on the joy of cinema”.

The problem, Blick reckoned, was that the Läderachs had already been the focus of a scandal in 2020, when national airline SWISS didn’t renew a contract with Läderach after ten years of cooperation, citing the importance of a “brand fit”. At the time, the media had reported on the Christian fundamentalist views of Jürg and Johannes Läderach, especially their opposition to same-sex marriage and a woman’s right to have an abortion.

‘Perfect storm’

Bauhofer thinks the danger exists, at least in Switzerland, that consumers will shun the brand. “Läderach is in the middle of a perfect storm,” he said. “The economy’s no longer running smoothly, inflation is plaguing many people, and now there’s also this reputation scandal.”

However, he thinks it unlikely that sales will suffer abroad. “The story isn’t interesting enough for the international media,” he said. According to Blick, the question is whether the expected drop in sales in Switzerland will be enough for the company to distance itself clearly and explicitly from the family’s views and behaviour.

Vogler, the brand expert, agrees. Despite the damage to the company’s image, there won’t be a very big hit to sales, he predicts. “In the short term, sales in Switzerland are likely to decline a bit. But tourists in Switzerland don’t notice the criticism in the national media and will continue to buy chocolate,” he saidExternal link.

What’s more, Läderach is above all a strong export brand – there will hardly be a dip in sales abroad, he added. “It would have been worse for the family business if the foreign media had also reported on the incidents, but that doesn’t seem to be the case at the moment,” he said.

‘Presumption of innocence’

For his part, Reiner Eichenberger, a professor of economics at the University of Fribourg, thinks the pressure on the company and Johannes Läderach is wrong.

“The presumption of innocence applies,” he told 20MinutenExternal link. “Besides, you shouldn’t boycott companies because of people who are no longer active. There’s also the question of the statute of limitations. Anyone who boycotts Läderach now will have to boycott a lot of companies, including the church.”

Eichenberger is also bothered by the fact that Läderach has already been criticised for its conservative values. “After all, freedom of religion and freedom of opinion still apply,” he said.

On Monday Läderach spokesman Matthias Goldbeck told SWI swissinfo.ch via email that Läderach employed people from more than 50 nations “with the most diverse backgrounds, opinions and lifestyles”.

“At Läderach, we live diversity, openness, respect, freedom of expression and tolerance,” he wrote. “Discrimination of any kind has no place at all with us. We have enshrined this in a charterExternal link, and we have created an ombudsman’s office to which people can turn if they think they have observed violations of this.”

The Läderach family business

Swiss chocolatier Läderach was founded in Ennenda, canton Glarus, by Rudolf Läderach (1929-2013) in 1962. His son, Jürg, 72, ran the company from 1994 to 2018. Jürg’s eldest son Johannes, 37, took over the management in 2018. Johannes has also been chairman of the board of directors since last year.

Also on the board of directors are his brothers Elias, as head of innovation, and David, as head of the business in Germany. The company has branches in 17 countries, including Oman, India and China.

Most recently, Läderach opened 40 branches in the US. Group-wide, the company employed over 1,800 people in 140 branches last year, according to the Handelszeitung.

Turnover is set to be around CHF150 million ($165 million). Bilanz business magazine estimates Johannes Läderach’s assets at CHF50-100 million.

(Source: 20Minuten)