Thursday, June 24, 2010

John Miller: WTF?! Why did you say you're not leaving?!!!

Amidst various reports of sex scandals, bullying, bankruptcies of small Pinoy entrepreneurs, beleaguered banks (from the bankruptcies), predatory pricing and anti-trust practices from different sectors regarding our favorite imperialistic trans-national corporation (TNC), Nestle, the top broadsheets have reported that according to Nestle Philippines chairman and CEO, John Miller, Nestle is here to stay.

*Insert favorite expletive here*!!!! Damn! Double Damn!!

A common defense of used by TNCs such as Nestle in spite of their highly imperialistic practices is to try to hold a developing country's balls by threatening, subtly or otherwise, that they will be stopping or withdrawing their purported investments in that particular country. Sometimes, it works; most of the time, though, it does not, most especially for our favorite TNC. In fact, these TNCs should be encouraged to leave! Here's why:

1. Nestle is one of the primary causes of inflation. Insiders in their marketing department have said that they have been encouraged by their mother company to incorporate as many price increases in their brands as possible. Look at Nescafe, a rough computation of the price index in 2001 versus 2010 reveals that the prices have grown to as much as 70% depending on the variant! Compare this to a developed country where the price increase is as low as 4% to a high 14% in the same period. Consider also the supply side of coffee. It is widely documented that in Vietnam, one of the world's largest producers (if not the largest already), farmers have even resulted to destroying some of their produce as their over supply has caused prices to drop! Supply cost has been low at most times yet price increases continue to hound our poor country. All of this, of course, is at the name of profit! Geesh! Talk about squeezing blood from a stone!!! Our poor country is a victim of this TNC's greed. Damn! Double damn!

2. Nestle's products are commodities. Coffee, milk, non-dairy creamer, chocolate are products that are easily replaceable by a competent manufacturer and there is no glut of these! San Miguel, URC, Alaska, Kopiko, Columbia, etc. can easily fill up a purported vacuum that Nestle insiders claim they will leave. The other manufacturers, I bet, were so unhappy about John Miller's announcement today.

3. The economic impact of the loss of exports are mitigated. A third of Nestle Philippines sales (est. PhP30 Billion) are exports to other countries and they are saying that leaving will have a tremendous negative impact in our economy. Hogwash! I say this for several reasons: a. They export their products ONLY to fellow subsidiaries and revenues are posted as merely accounting entries and not actual cash to the country. b. If indeed there was cash remitted to the country, it stays here for just a short while and is then traded in other markets or remitted to the mother company. The company maintains just enough working capital that it needs and places the excess cash to instruments that make more in its idle state! Guess what? The Philippines does not have high paying instruments compared to the rest of the world. So, no the loss of exports are mitigated because they were NEVER HERE IN THE FIRST PLACE.

It should now be clear why Nestle should leave. Our country will not be beholden to arrogant ASSHOLES like you, John Miller. You can fool some people all the time. You can fool all people some of the time. But you can never fool all people all the time.

1 comment:

  1. May I add that Nestle spends billions in trade spend every year to ease out competition. They would buy most of the space for their products in major retailers such as SM, Robinson's, Waltermart and Puregold to name a few. Cost of which is passed on to the consumer. They would also lay off employees even if the company is making a lot of money. Pinoys should patronize our own, homemade products and not brands which pay royalties to their home country.