EDITORIAL: Business is no academic subject
EVERY SO OFTEN when we resort to our almost natural tendency to debate issues to the death we can find ourselves treating business and financial matters as though they are academic subjects that are separate and distinct from the rest of our lives. Given the nature of today’s world, however, we should resist the urge to think this way.
In a sense, this was what late Prime Minister David Thompson was trying to get us all to recognise when, as part of the campaign that brought his Democratic Labour Party to power in 2008, he trumpeted the slogan “Barbados is more than an economy; it’s a society”.
Two events in particular of the past week have served to emphasise this point – both relating to one of Barbados’ most respected and recognised companies, Banks Holdings Limited (BHL), the parent company for well known brands such as Banks Beer and Pine Hill Dairy.
On Monday the news broke that BHL was sending home 48 employees from across its network, the result of streamlining that was being implemented six months after it was taken over by Brazilian entity AmBev, which is itself owned by one of the world’s most recognised brewing companies, Anheuser-Busch.
The acquisition process included a bruising battle with regional giant ANSA McAL from Trinidad, an exercise that pushed the price of BHL shares to an all-time high, in the process making the acquisition an expensive one. Only the naive would have expected a continuation of business as usual.
Two days later, BHL was again in the headlines, this time with the news that its long-term franchise contract to manufacture the world most popular soft drink, Coca-Cola, was in jeopardy because having been acquired by AmBev it was now owned by the company producing Coke’s number one competitor, Pepsi Cola.
Again, only those walking around with their eyes closed would not have seen the very strong possibility that the local arrangement for the manufacturing of Coke, dating back to 1945, was very likely to be a casualty. We don’t wish to be previous, but it would take a lot of public relations spin from BHL to convince thinking Barbadians that a loss of the Coke business would not have serious implications for BHL jobs.
But our world is not made up of neat, unrelated boxes. If BHL loses the Coke business that does not mean the appetite of Bajans and tourists for the product will automatically evaporate. So someone else will either succeed in getting a licence to produce the drink here, or grasp the opportunity to be the official importer. In either case this is likely to create some jobs.
Business is not an academic subject at all. It touches our daily lives in very real ways. And it is this thought that should set us thinking of another development that is still quite fresh and subject to serious debate about its implications – the decision of a majority of United Kingdom voters to support the exit of the UK from the European Union.
What are its implications for the strength of the pound sterling? Will the impact on the British economy be negative or positive? How will all this impact on the holiday travel of Britons, given the critical importance of this market to Barbados’ tourist arrivals and spending?
Just as importantly, what is the likelihood of a British exit from the EU plunging the fledging European recovery into a tailspin? Would such an eventuality hurt the world economy?
This cannot be an academic subject for Barbadians, not given the pain of the last eight or so years that resulted from the international recession.