Gustavo Ballvé on February 23rd, 2010
Corporate Strategy, Food for thought, Food, beverage and tobacco, Home, Industries

Mostly hate, actually, judging by recent troubles in Belgium and this article at Valor (in Portuguese – links in English inside). And there’s the “socialism vs. capitalism” conflict in Europe again. If it weren’t for the image deterioration risk – and it seems that they’re handling it by going as far as they can, but no further – the union representative’s words would be music to shareholders’ ears.

Background: after the AmBev – Interbrew merger, the brazilian team’s cost-cutting efforts have surpassed European standards by far and that is rattling many cages. A strike has occurred, disrupting Stella Artois production, and competitors have jumped to the opportunity of reminding people that they’re “still Belgian”, in what must be ironic for the InBev guys. And now the management team has come to be a synonym for corporate greed. Wow.

But the usefulness of the Valor story for us is to highlight the huge gap between the unions’ speech and the interest of shareholders. Some of the quotes would read quite amusingly in the social and historical arena, if they didn’t lead to image problems that might eventually affect sales. That said, it’s crystal clear that the cost-cutting and cultural change efforts in course, if handled well, are in the best interest of shareholders in the long run.

We’ve tried to get an article in English that would translate the weirdness of the unions’ quotes and couldn’t capture them all in a single article, but here’s one from a pro-union site that has an infamous quote: “AB InBev are just thinking of their bottom line for shareholders, regardless of the social cost. There is no reason at all to fire people.”

Amazingly, the article describes the kidnapping of 10 senior managers at the plant as if it was the most normal event ever… “Social cost” indeed!

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