Where’s Your Money Going? Part 2Monday, 23 June 2008
In our first article* we revealed the huge corporations behind some popular, fashionable and supposedly ethical or organic brands like Green & Black’s, Body Shop, Prêt A Manger, Ben & Jerry’s & Tom’s of Maine. That was almost a year ago and the sad fact is that we have even more bad news. Now, more than ever, it takes a bit of amateur detective work to find out who’s making loads of money when we purchase our favourite products. If you took the blue pill, best stop reading now and pretend everything’s as you always thought it was......
VEGETABLE CHIPS LOSE ORGANIC ROOTS
Tyrrells, which produces high quality potato chips (crisps to the common man in the UK!) and root vegetable chips, was founded by William Chase, a Herefordshire farmer in 2002. He was passionate about quality and is alleged to have vowed that his products would never be sold in Tesco, the UK supermarket chain competing closely with the US government for total world domination. Last month, Tyrrells was purchased by private equity firm Langholm Capital which is backed by corporate giant Unilever and whose advisers describe them as “great partners for the business in accelerating growth, distribution and brand awareness”. The website’s news archive is strangely silent about the new owners with the May section mentioning planting and work with local children but nothing about meeting those nice people from Langholm........
CORPORATE CEREAL KILLERS
Dorset Cereals, maker of popular healthy breakfast cereals, is another independent producer which has been swallowed up by Langholm Capital. Langholms bought the firm in April 2005 and immediately appointed a new management team with links to such highly ethical brands as Nestlé and Coca-Cola. In March 2008 it was then sold to Wellness Foods, a company backed by yet another private equity firm, Lydian Capital, funded by the Irish horse racing tycoons JP McManus and John Magnier. In the website’s news section, there is no entry for March 2008 and no mention of rich new chums on horseback...........
SEEDS OF GREED
In the UK, Seeds of Change produces 100% organic foods including pasta, pasta sauces, cooking sauces, soups and cereal bars. It’s about to launch a chocolate range. Started as a small seed company in Santa Fe, New Mexico, in 1989, it opened for business in the UK in 1999. In between, in 1997, the company was sold to corporate confectionery monster Mars, which specialises in mass market, non-organic, unfair trade products. Sowing the seeds of corporate growth perhaps. The company’s website is fairly bashful about the Mars connection although each page does have a small footer acknowledging the ownership of the brand’s trade mark.
SMOOTH OPERATOR MOVES IN
PJ Smoothies boasts of being “founders of the smoothie market in the UK in 1994” but in 2005 its original owner Harry Cragoe sold the company to PepsiCo, that other drinks manufacturer famed for its healthy, natural drinks..... Interestingly, there appears to be no mention of the new owners on PJ Smoothies website although the 2005 part of its history section does claim that it “has remained true to its founding principles”. Mmm.......
SIGNED, SEALED & ORGANICALLY DELIVERED
In October 2007, London-based Abel & Cole, the UK pioneers of organic fruit & vegetable delivery, sold a stake in its business to yet another private equity firm, Phoenix Equity Partners. Apparently Keith Abel started his business with very limited resources, including money borrowed from friends and family, and by selling potatoes from door to door. Now someone a bit wealthier has come knocking on Mr Abel’s door and they weren’t offering a selection of organic spuds.......
SUFFOLK OFF CORPORATE FAT CATS
Copella is a Suffolk-based company which makes traditional fruit juices. In 1999 it was bought by Tropicana, the orange juice brand owned by Pepsi. Once again, there is no mention of this major development on the brand’s website........
THERE GOES MY BABY FOOD...
And finally, for this instalment, the Organix baby food company was sold to Swiss food giant Hero in February 2008. After all, big profits can still be squeezed out of little babies......Oh, and of course, we couldn’t find a mention of any ‘Heroes’ on the website......
It’s always good to end with some good news but we hope this isn’t like one of those human (or animal) interest stories tacked on to the end of a news bulletin. You know the sort. Hundreds of people have been killed by an earthquake in a developing country and dozens more by a suicide bomber in Iraq (or any other victim of US ‘democracy’) but at least Madge from Norwich has celebrated her 105th birthday and a dog from Manchester can play a Robbie Williams song on the violin.
Innocent makes smoothies without using additives or concentrated juice and gives 10% of its profits to fund rural project in countries that grow its fruit. Despite having 45% of the UK smoothie market and enjoying massive growth in turnover, its founders haven’t sold out. They have, however, refused to rule out a sale in the future. Oh well, at least one of the owners’ tortoises has just signed for Aston Villa.......
IS BIG ALWAYS BAD?
You may well be thinking, “so what if these small companies have been snapped up by bigger ones?” and that’s a very reasonable question. Is big always bad? After all, many of these brands have stuck to their own principles in respect of producing foods that are high quality, healthy, ethical and organic. So here’s a few reasons why we think that this is a very negative trend.
• The reason for the sell out in every case has been the ‘need ‘ for faster growth and growth is one of the demi-gods of capitalism, being revered far above the fair treatment of people, animals and the earth
• The new owners do not have the same ethical standards as the original owners – equity capital firms may grow the value of a business (often at the cost of people’s jobs) but the sole reason they own them is for profit
• The majority of the profits from the products will not be staying in the local area and this is bad news for the local community
• Market growth means increased geographical spread and increased food miles which is bad for the environment
• Only one of the websites mentions the new owners (or even change of ownership) and this secrecy suggests there is something to hide
• Some of the sell out brands suggest that they will be able to compete with bigger companies and even supermarket chains but the problem remains with the rat race – even if you win, you’re still a rat
Growth for the sake of market share and increasingly large profits for shareholders or private equity owners feeds a system which does grow something – the gap between the ‘have lots’ and the ‘have littles’. A more sustainable approach would be for similar companies to be measured on a set of key performance indicators like: quality of product (organic); fair treatment of employees (or even better, common ownership); environmental impact; and contribution to the local community. If there were hundreds of such firms all over the place, we might have a healthier and happier country.
This follow up article came about - at last - after we read something in the Independent Magazine of 14 June but we carried out some more investigation to check the paper’s facts and to get some additional information. It was written to the sound of Clandestino by Manu Chao.