The Null Device

The big fish eat the little ones

What happens when a company known for its ethical principles and alternative business culture is taken over by a multinational corporation? The outcomes vary; in many cases, the "funky"/ethical brand becomes merely a fig leaf over the parent's more conventional business practices:
Body Shop has just become part of the French cosmetics giant L'Oréal; Tom's of Maine fell to Colgate-Palmolive last month; Wales-based Rachel's Organic is a subsidiary of the American conglomerate Dean Foods, which has come under fire in the US over its industrial-scale organic dairies and factory-farm milk production. Pret A Manger is one-third owned by McDonald's; Ben & Jerry's has been under Unilever's ownership for six years and Green & Black's belongs to Cadbury-Schweppes, the world's biggest confectionery company.
At Ben & Jerry's in the US, the relationship with Unilever remains an uneasy one. Ben & Jerry's most recent social audit highlighted a "disappointing" lack of social initiatives at the company and poor morale among employees. It questioned whether the company was "simply a Unilever marketing operation using the brand's reputation for social responsibility to promote sales."
Ethical Consumer magazine runs an online shoppers guide, at www.ethiscore.org, which rates companies and their products on their ethical credentials. Body Shop's rating has plunged from 11 out of 20 to just 2.5 since the L'Oréal deal and the magazine has urged a boycott of its products in protest not only at the French cosmetics group's ownership, but also its links with Nestlé, which owns 26% of L'Oréal. Nestlé has faced boycott campaigns over issues from animal testing to the marketing of baby milk substitutes.
This gloomy scenario, however, is not always the case; occasionally, a parent manages to keep its hands off a smaller unit and its culture, and the subsidiary continues on as before, only with the benefit of the parent's resources:
Like most of the niche businesses bought by multinationals, Green & Black's is run as an entirely separate operation within the Cadbury empire. "It's a case of how they can help us, not telling us what to do," Mr Palmer says.
He adds: "You can be fiercely independent and not have any funds to grow. But does that help the cocoa growers in Belize?"
Perhaps Green & Black's having fared well is more a result of Cadbury's not particularly ruthless corporate culture (weren't the Cadbury family, who owned the company until not that long ago, Quakers or something?). I suspect that had they been bought out by, say, Nestlé, it may be a different picture altogether.

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