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Lack of adherence to ethics and principles appears to have been one of the main causes of corporate financial distress around the world. A lot of unethical practices have contributed to revenue leakages and reluctance by investors to buy a stake in the industry. The prevalence of unethical practices, illegal behavior, illicit and deceptive practices in food and beverage companies is an unsolved issue. The aim of the research was to find out the effect of ethical problems on company’s financial performance in food and beverage industry. The high failure rate of brands in the food and beverage companies has given the researcher interest to investigate the impact of ethics on financial performance of a company. Due to the diverse nature of food and beverage industry, an action research inquiry of 20 interviews and 100 questionnaires was conducted. A mixed method convergent approach was used to analyse collected data using questionnaires and interviews. Findings from the study that there is strong positive relationship between ethical conduct of employees, managers, business conduct and the financial performance of food manufacturing company. The study results show that ethical branding significantly enhances the firm's reputation; and good reputation reinforces the brand in turn. Ethical branding can provide the company with a differential advantage as a growing number of consumers become more ethically conscious. It is therefore recommended that, ethical issues should be considered in all company departments and embedded into total quality management processes of an organization as it affect potential investors and customers.
