International FMCG brand Kellogg's has drawn fire from industry sources, with claims of "unrealistic" pitch terms.
AdNews understands the brand, which was this week revealed to be pitching its media account, has put forward a brief that has caused many agencies to walk away.
It was originally reported that each of the major holding groups was to be involved but industry sources now say more than half the agencies have stepped away.
One anonymous source told AdNews the brief made it "almost impossible" to consider.
The account is currently managed by GroupM's agency Mindshare.
Kellogg's says statements currently being made about the pitch process are inaccurate.
"The pitch process is confidential," says Tamara Howe, the Kellogg ANZ director of marketing and corporate affairs.
"We will respect the confidentiality that we have committed to and we expect our agency partners to do the same.
"We’re disappointed that an agency that has a commercial in confidence agreement with us has breached that agreement by going public with a slate against Kellogg’s and our relationships with our valued partners.
"We have always had mutually valuable relationships with our agencies, which is demonstrated by the fact that we have worked with our incumbent media agency for 35 years. We have also worked with Wunderman Thompson for over 80 years."
An industry insider told AdNews there are always clients who come in low with offers but there is usually some wiggle room to negotiate,
Another says the need to agree to 120 day payment terms, which many brands insist on, made waifer thin margins even slimmer.
The industry conversation on pitches follows the call from Initiative global CEO Mat Baxter this week to #ditchthepitch.
"We will never do those pitches and we will never do 120 days. It's not happening and if I have to walk away from a pitch, I don't care who the client is," Baxter told AdNews in an exclusive interview this week.
"We just walked away from a huge opportunity. We're not doing it because at some point, you've got to go no.
"If that's the most important basis for a client relationship - the payment terms - they're not our kind of client. It's as simple as that."
Baxter also praised Omnicom and its media agency PHD for also taking a stand against the issue of pitching.
Baxter added that it was not as if his agency was failing to pick up clients, highlighting a need to take a stand and work with brands that want more than a "race to the bottom".
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