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Would Oliver’s Real Foods Benefit From Board Renewal?

The investors who own shares in the company should be wondering what has gone wrong at Oliver’s Real Foods (ASX:OLI). I doubt they are particularly pleased with the share price.

In my opinion the problem has to do with management.

The basic offering is fast, healthy food, sold at highway rest stops. While Australians (myself included) don’t mind a burger and chips, plenty of us prefer something leaner on occasion, so there are real prospects there. But it didn’t take long for me to discover that Oliver’s veneer of respectability obscured a dark secret: the founder and (former) CEO, Jason Gunn, has a history of using the company to oppose vaccination.

Pro-science blogger Reasonable Hank examined the situation back in 2016. And multiple sources have confirmed to me he is unapologetic in his stance.

Now, in his 1977 Letter to shareholders Warren Buffett said:

“We select our marketable equity securities in much the same way we would evaluate a business for acquisition in its entirety. We want the business to be (1) one that we can understand, (2) with favorable long-term prospects, (3) operated by honest and competent people, and (4) available at a very attractive price.”

One might reasonably argue that Oliver’s Real Foods satisfies three of those four criteria. And there’s no doubt that judging honesty and competence is difficult. But when executive board member Jason Gunn has a history of posting anti-vaccination videos, it does not fill me with confidence. Personally, I believe that this aspect of the business should have been disclosed in the prospectus.

Why, you might ask?

Because it is not just the former CEO who espoused anti-scientific views with regards to public health. It was, and is, the company itself that has spread this propaganda. You can see for yourself, below:

So the company, Oliver’s Real Food said “we are not anti Vax, just anti UNSAFE Vax”. OK then.

Here are two more examples of the company using Facebook to spread anti-science propaganda, from Reasonable Hank. I presume these posts have since been deleted by the company (multiple investors, including me, have been in touch with Oliver’s about the way it uses social media).

When I queried the company on this I was told that this anti-vaccination material had been removed. I checked multiple Oliver’s stores (where they also sell books), and as of March 2018, while anti-vaccination material was not obviously present, the company was still selling books offering a variety of pseudoscience. You can see in the picture below a book called, “Cancer: why we’re still dying to know the truth”.

Let us examine an excerpt:

“Breast cancer serves as a poignant yardstick… Can we beat cancer? Yes. It’s already done. The knowledge to conquer cancer was understood many decades ago but the facts never made it into the public domain until relatively recently…. and yet amazingly, the truth is still suppressed, lies disseminated, people hounded and jailed in order to protect a voracious and highly profitable corporate agenda.”

Righto. So what is the cure for breast cancer, according to the books sold at Oliver’s Unvaccinated Foods?

“…a wide range of cancers has been reported to respond very favourably to the combined metabolic protocol. Lung cancer, pancreatic cancer, liver, brain, leukaemia, lymph, bone, testicular, prostate, skin, breast, uteral [sic], cervical, colonic, etc. As time progresses and medicine becomes more accepting of B17, a wider range of data will be amassed. Internet sites operated by doctors practising Metabolic Therapy are a great source of information for individual case testimonies and details of treatments. Please see the Internet references listed in this book.”

Ahh yes, vitamin B17, a ‘metabolic treatment’ allegedly suppressed by med science academics and doctors alike. Part of the conspiracy of silence, to profit from selling pharmaceuticals and surgery.

Of course, this theory is not proven.

My first question is this: why is the founder of Oliver’s allowed to use the store network, which is a shareholder asset, to spread this misinformation?

And my second question is: are directors fulfilling their fiduciary duties to shareholders by allowing shelf space to be used to display niche, conspiracy theory books, rather than a more profitable use?

In my opinion Oliver’s has significantly underperformed its potential under the prior CEO.

Under new CEO Gregory Madigan, I believe this company has potential to create value for shareholders by serving its customers nutritious meals.

In my opinion spreading pseudoscience is unethical, a waste of shelf space in store, and undermines the company’s duty to shareholders, customers, and broader society.

Remember, newborn babies rely on us to vaccinate, in order to protect them from disease. Newborns do not have a sufficiently developed immune system to benefit from vaccines such as the whooping cough vaccine. Herd immunity helps prevent this.

In my opinion it would be a positive for Oliver’s if Jason Gunn resigned from the board. He is, after all, a man who appears to be either unwilling or unable to understand herd immunity.

Motley Fool investment advisor Claude Walker does not own shares in any of the companies mentioned in this article. You can follow Claude on Twitter @claudedwalker. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. 

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