Indulge in some literary banting
21 October 2017 18:00 (South Africa)
Politics

Nestlé chooses dollars over Zim dollars

  • Branko Brkic
    branko3048 a ray
    Branko Brkic

    Brkic is the founder and editor of The Daily Maverick.

    He has edited magazines on business and politics, technology, and wildlife. He has also published fiction and non-fiction books, most of them in Serbian. Though he has never pretended to be a reporter, his wide knowledge of politics (especially in America), combined with his experiences in a disintegrating Yugoslavia, gives him an unusual outlook on events in South Africa.

    Despite the vowel-poor surname, he tells anyone who asks that he hails from Hyde Park, Johannesburg, having spent most of his adult life in South Africa.

    Recent columns:

  • Politics
nestle

Morgan Tsvangirai (and, presumably, Robert Mugabe and his wife) thinks Nestlé is silly for shutting down an entire plant because of undue government interference. Maybe they aren't quite as familiar with risk/reward calculations as one of the biggest consumer food companies in the world is.

When the cops showed up at a Nestlé plant in Zimbabwe and started throwing their weight around, they were probably just trying to intimidate managers into taking milk from the ill-gotten farms of Grace Mugabe. They sure weren't expecting the company to take the nuclear option – but that's what they got. Nestlé promptly shut down the entire operation, saying it wasn't prepared to risk the safety of staff in such an environment.

Which is a laudable standpoint, and almost certainly true, but that's only part of the story. The timing of the decision, plus the delay in originally deciding that Mugabe's wife's milk is off, indicates a head office decision. And while staff safety may have been the first thing on the mind of the international managers, the safety of their brand would have been a damn close second.

Zimbabwe isn't exactly a massive profit centre for Nestlé, but SA is. So is Britain, the EU, the US, Canada, Australia, the rest of the English-speaking world, and the rest of the non English-speaking world. A decline of a fraction of a fraction of a percentage point in just a few of those markets (say after a political action group calls for a boycott, or a local newspaper publishes an investigative story) would outweigh the value of the entire Zim operation by orders of magnitude.

Dealing with state-run Chinese companies has clearly softened the heads of Zimbabwean apparatchiks. They are used to getting their own way in those discussions, and even global mining houses tend to give ground when rich deposits are at stake. Somebody should point out to them that consumer companies march to a different beat.

Read more: Mail & Guardian, Times Live

  • Branko Brkic
    branko3048 a ray
    Branko Brkic

    Brkic is the founder and editor of The Daily Maverick.

    He has edited magazines on business and politics, technology, and wildlife. He has also published fiction and non-fiction books, most of them in Serbian. Though he has never pretended to be a reporter, his wide knowledge of politics (especially in America), combined with his experiences in a disintegrating Yugoslavia, gives him an unusual outlook on events in South Africa.

    Despite the vowel-poor surname, he tells anyone who asks that he hails from Hyde Park, Johannesburg, having spent most of his adult life in South Africa.

    Recent columns:

  • Politics

Get overnight news and latest Daily Maverick articles






Do Not Miss