Kleenex, the popular facial tissue brand, recently announced its decision to pull out of Canada, leaving Canadian consumers without their beloved product. This move has raised concerns among Canadians and experts alike, highlighting the unique complexities of the Canadian market and the challenges faced by foreign businesses.
The decision by Kimberly-Clark, the company behind Kleenex, to withdraw from Canada was described as “incredibly difficult” but ultimately necessary due to the “unique complexities” of the Canadian market. While other Kimberly-Clark products like Huggies and Cottonnelle will continue to be available in Canada, the absence of Kleenex is likely to be felt by many Canadians who have long associated the brand with facial tissues.
One of the key reasons behind this sudden departure is believed to be the financial viability of the brand in Canada. Marketing professor David Soberman suggests that if Kleenex were profitable in the Canadian market, they would not have made the decision to withdraw. It is evident that Kleenex faced stiff competition from Scotties, a Canadian brand that holds a dominant position in the facial tissue market in Canada. Scotties’ strong Canadian sponsorship deals, such as its involvement in women’s curling, have likely contributed to its success and, consequently, Kleenex’s challenges.
However, Kleenex’s exit from Canada is not an isolated incident. In recent years, several other well-known American brands, such as Bugles, Bagel Bites, and Little Debbie products, have also bid farewell to the Canadian market. Economists point to the Canadian market’s unfriendliness towards foreign businesses as a major reason for these departures. Canada’s inefficient government bureaucracy and high taxes, especially when compared to the United States, have been cited as significant obstacles for foreign companies. The size of the US market, with its larger consumer base and more favorable business conditions, makes it a more attractive destination for companies seeking expansion and profitability.
Additionally, protectionism is another major challenge faced by foreign businesses in Canada. The three largest industries – airlines, telecom, and finance – are heavily protected by the federal government, creating a home court advantage for Canadian companies. While this protectionism may benefit local businesses, it also acts as a deterrent for foreign companies, further limiting their prospects in the Canadian market.
The impact of Kleenex’s exit will undoubtedly be felt by Canadian consumers, who will have to adapt to alternatives in the facial tissue market. The void left by Kleenex opens up opportunities for other brands like Scotties to strengthen their position further. Moreover, this development raises important questions about the competitiveness of the Canadian market and the need for improvements in government bureaucracy, tax policies, and a more pro-business environment.
In conclusion, Kleenex’s withdrawal from Canada highlights the challenges faced by foreign companies in the Canadian market. The dominance of a local brand, protectionist policies, and an unfavorable business environment have all contributed to Kleenex’s decision. Canadian consumers will now have to navigate the absence of Kleenex and explore alternative options. This incident serves as a reminder of the unique complexities and obstacles posed by the Canadian market, calling for attention from policymakers and businesses alike.
