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Blue chip? What is ‘blue chip’? According to Google, the term comes from poker: the blue chip is the highest value chip. Companies which are honoured with the prefix ‘blue chip’ are deemed to be well established and 100% solid and trustworthy. These are the household names that we can give our trust to. Heinz and Ford and Kenwood and
and Cadburys. Familiar names. Names we have grown up with. Names which have
been waved in front of our faces for years and years and years. Hoover
And familiarity has bred contempt.
We trust them and they shaft us.
Of course few of these much loved brands have ever been whiter than white. Anything but. I guess they merely used to be rather better at keeping their nasty secrets. A semblance of decency used to be important. It doesn’t seem to be so any more. Not they are much more in our faces. So what are you going to do about it pal?
We still hold up Henry Ford as a visionary figure: a borderline industrial genius who delivered affordable cars for all. The fact that he was more racist than most Ku Klux Klan grandmasters from
has been gently
air brushed from history. He always greatly admired the visions and dreams of
Hitler and maintained an unholy contact with the Nazis right through the
1930’s. Many have often wondered if he offered a helping hand to the beloved
Fuhrer in sitting up the assembly lines that delivered the ‘people’s cars’ to a
grateful German public. Many have often wondered if Ford offered his wisdom and
expertise in the development of the most brutal and starkly efficient assembly
line of them all – the one that ran from all corners of Alabama Europe
to the ovens of Auschwitz Birkenau. I guess the answers to that one were all burned
and shredded long ago.
And what of good old cuddly Cadburys? How can a company we have known and shopped with for all of our lives be anything but British and good and decent? I mean they did that brilliant advert with the gorilla and the drums for Christ’s sake.
To make lots of chocolate you need lots of cocoa. We Brits used to have that well sorted. Our Empire was good for lots and lots of cocoa, every pound of it sold on the
London market at a price
guaranteed to makes a tonne of cash for Cadburys and a lifetime of penury for
the poor sods who grew the beans in . This happy state of affairs
ended in 1957. The Americans put their foot down after the Ghana debacle and gave our Empire a winding up
order. No more colonies for us. Suez Ghana
became independent and the new leader Kwame Nkrumah had the cheek and audacity
to refuse to sell his cocoa exclusively in . Within months the price of cocoa
beans went up from $150 a tonne to $450 a tonne. That must have stung a little
in the panelled boardroom of London ’s
most treasured purveyor of chocolate. There is plenty of rumour and hearsay
about what came next. Nkrumah lasted for ten years until he was ousted in a run
of the mill African coup. The rumour and hearsay suggests that the coup was
arranged by the CIA and MI6 and largely financed by Cadburys. Surely not! What
is beyond dispute is that the price of cocoa crashed. Britain
And it stayed crashed. For years and years. The cocoa farmers went back to grinding poverty and Cadbury’s made their gorilla advert.
Boots is another so called blue chip outfit. Familiar. Trusted. Much loved. We all grew up with Boots. When we were ill as kids, our mums would return from a trip to Boots with a bottle of cure in one of their instantly recognisable paper bags. Founded in 1853 in
they grew and grew until they found a spot on every High St in the land.
And they still do.
Boots the chemists. They have never needed to re-brand. Why would they? That familiar blue lettered logo says all there need to be said. For here is one of those most British of British companies. Set in stone. Part of the scenery. An ever present presence through the years of our lives. Can we trust Boots? Of course we can. Boots are as blue chip as they come.
Well the Government certainly trusts Boots on our behalf. Every year they bung the company over two billion quid’s worth of business in the form of prescription fees and other NHS work. That by the way is £40 a head for every man jack of us. Nice business if you can get it. But that is exactly the kind of business you can expect to get when you are a blue chip and well loved firm who has graced the British High St for these last 160 years.
If only it were true.
The truth is that Boots is about as British as lasagne and high speed trains. Boots ceased to be British six years ago when it was bought up by an Italian billionaire and a private equity outfit from
. This unholy alliance shelled out a
cool £9 billion and promptly re-registered the company in a sleepy little town
in New York .
I listened to a Radio 4 podcast last year where the reporter tracked down their
new head office. It is a post office box! The firm that technically hold the
Boots deeds is based in Switzerland Gibraltar. The firm
that lent all the money is on Wall St of course.
Once they had their hands on the firm, they danced their capitalist tango with each other. One side of the partnership had leant the other the side the cash for the deal and they set an eye watering interest rate for doing so. This has become a well loved ploy over recent years.
In the years since the takeover Boots has racked up an operating profit of £5 billion. Most of the cash has been generated in
largest share has come from that lovely, lovely £2 billion a year from the tax
payer. When we hand out so much business to a company, surely the least we can expect
is that they will reciprocate by shelling out to pay taxes on the profits. Britain
Well it would be nice. Well, wouldn’t it?
Corporation Tax on £5 billion is something over £1 billion. Not enough to cover the cost of Boots issuing all of those NHS prescriptions, but a fair chunk of it.
Unfortunately, the guys who own Boots don’t do tax. They are allergic to tax. They hate tax and they will go to almost any lengths to avoid paying so much as a penny of tax.
So they don’t.
Instead they tell it like this. Oh yes, we have made an operating profit of £5 billion. But here’s the thing. We are paying a fortune in interest on the £9 billion we borrowed to buy the company. And that means we have made a monumental loss. In fact, we have made such a monumental loss that we would like to use this loss to reclaim some tax from the years before we bought the company.
They have made £5 billion in six years and remarkably enough it turns out that WE owe THEM £130 million! It is £2 from every man, women and child in
Ah but hang on a second here. You borrowed that money from yourself!
No we didn’t.
Yes you did.
No we didn’t.
Yes you did,
Let us see the books then.
Can’t. They’re in
Oh. That’s a pity.
It would be nice to think that the Government’s reaction to this bare faced con would be to instruct the NHS to withdraw all business from Boots with immediate effect. I wonder why they haven’t? Could be anything to do with party donations and champagne jollies at Twickerham? Surely not? God forbid. Blue chip companies don’t do stuff like that.
It would be nice to think that having such a cunning plan in place to ensure they never have to pay any tax, they could at least behave with a semblance of decency in their day to day business.
Here is my very own little beef with the well loved favourite of the
British High St.
A few years ago I read a report that showed the mind boggling impact a high
dose of Omega 3 can have on the human mind. Well my human mind is half a
century old now and it is getting a tad rusty and it needs all the help it can
get. The report suggested that to have the optimum effect, the brain needs 1000
mg a day of EPA and DHA which are the initials that describe the
unpronounceable chemicals that make up Omega 3.
So I went into Boots and did some label reading. Their top of the range product went by the name of ‘OMEGA 3 FISH OIL’ and the front of the box stated that each and every capsule would provide 584 mg of EPA and DHA. So no problem them, Two capsules a day would take me well beyond the 1000 mg a day target. How much? Bloody hell. £12.50 for a box of 60. 40p a day. Oh well. What the hell.
I was writing a book at the time. My normal writing routine is to get up at 5.30 and sit down for 6 o’clock and write for two hours. For ten years, my average output during this two hour slot had been 1500 words. Within three weeks to taking on board 1000 mg of Omega 3 a day, my output had gone up to 2000 words a day. I don’t suppose you will be surprised to hear that I have take the capsules ever since.
A couple of weeks ago I noticed that there had been some subtle changes to the packaging. Check out the picture below. It’s a bit like those spot the difference things we used to do when we were kids.
You will notice the words ‘MAX STRENGTH’ have suddenly appeared, but the words EPA 351 mg and DHA 234mg have suddenly disappeared. Now why would the beloved treasure of the
British High St
have decided to disappear the amount of EPA and DHA from the front of the box
at the very moment that they had decided to add the bold claim that their
product was ‘MAX STRENGTH’?
The back of the box told the full story. The DHA had actually nudged up to 250 mg but the EHA content had done a Leeds United and crashed all the way from 351 mg to 95 mg. Looks like the price of DHA must have gone up.
OK. Time to do a few sums. 95 + 250 = 345. Two capsules a day therefore gives 690 mg. And 690 mg is still 310 mg shy of the target level of 1000. So instead of needing two capsules a day to hit the mark, I needed 3 capsules a day to hit the mark. 40p a day had suddenly become 60p a day and in my books that means a 50% price hike.
The much loved and trusted
High St institution could have dealt with
the rise price they were paying for their EPA in three different ways.
Number one. They help out their customers and absorb the rise. After all, they are making a tonne of money and paying no tax when all is said and done.
Number two, they act like a decent and honourable business and hide nothing. They keep the product identical and raise the price from £12.50 to £18.75. Maybe they even produce a short info leaflet explaining that world EPA prices have rocketed. But that would have meant that some of their customers might have looked at the price and thought ‘I’m not paying that!’
So instead they predictably went for option 3 and chose to be dishonest and tawdry. They cheapened the product whilst at the same time re-branding the box as ‘MAX STRENGTH’.
Like a bunch of no good, money grubbing shysters.
And all those customers who were shelling out their £12.50 a month in all good faith to hit their Omega 3 target were all of a sudden falling 30% short. No doubt many will right now be wondering why they don’t feel quite as sharp and putting it down to a bug or something. But it isn’t a bug. It is just yet another example of a so called blue chip firm acting like a bunch of two bit petty con artists.
Maybe it isn’t so very surprising that sales of Karl Marx have shot up over the last year or two. Maybe he wasn’t so wrong about capitalism after all.