Kleenex is pulling out of Canada due to ‘unique complexities’

August 25, 2023   –Canadians with runny noses and teary eyes will soon have to part with their Kleenex after the company announced it was pulling its famous facial wipes from the country.

Kimberly-Clark, the company behind Kleenex, said the decision was based on “unique complexities”.

Other Kimberly Clark products like Huggies and Cottonnelle will remain on Canadian shelves.

“The decision was incredibly difficult for us to make,” the statement said.

The news of Kleenex’s exit is “shocking” in a country where the brand is so well known, said David Soberman, a marketing professor at the University of Toronto’s Rotman School of Management.

“In Canada, the word Kleenex is almost synonymous with a facial tissue,” he said.

So why the sudden goodbye? Experts like Mr Soberman told the BBC the decision almost certainly came down to the bottom line.

“No company pulls out of a market if they’re making money,” Mr. Soberman said. “Whatever they want to say, they could have just said ‘we’re not making any money in Canada, that’s why we’re pulling out of facial tissues’.”

Part of Kleenex’s problem, Mr. Soberman said, was likely the popularity of Scotties, the facial tissue produced by the Canadian company Kruger.

“They [Kleenex] really are the second place brand in Canada to Scotties,” he said, noting Scotties’ major Canadian sponsorship deals, like its presence in women’s curling.

But this is not the first time a big brand name has abandoned Canada. Beloved American snacks like Bugles, Bagel Bites and Little Debbie products have also said goodbye in recent years.

Economists told the BBC that may be because Canada’s market is not all that friendly to foreign business.

According to the World Economic Forum’s competitiveness index, CEOs most frequently complain about Canada’s inefficient government bureaucracy and high taxes – at least compared to the US.

“The US market is easier than Canada’s for a variety of reasons,” said Walid Hejazi, an economics professor also at the Rotman School.

First, Mr. Hejazi said, is the sheer size of the US – almost 10 times as many people buy, sell and manufacture products.

More readily available credit, less government regulation and more investment in research and development are other reasons the US can be a more attractive market than Canada.

“Another huge one is in Canada is there’s so much protectionism, I think this is the biggest one,” Mr Hejazi said. In Canada, all three of the biggest industries – airlines, telecom and finance – are heavily protected by the federal government, he said.

While Canadian companies may benefit, that home court advantage may help drive out US and other foreign companies from travelling up north.

And now, it means, Canadians will have to save their tears – at least for another brand of facial tissue.

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