I realize that the news of Suntory's purchase of Beam Brands is almost two months old now, but I had a few thoughts about that deal (and a few others) that I'm just getting around to writing down.
If you missed it, Businessweek had an article in January that you can read for back story. That news followed closely on the tails of a release I read on CNN Money about Italy's Fiat buying the final piece of Chrysler for $3.65 billion. Taken together, I believe it was a bad month for American companies and worse, for future US Spending Power.
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Why my backlash?
Well, Vauhini Vara of the New Yorker suggests that Americans might disapprove of the sale because they feel uncomfortable with foreign owners controlling their food and drinks. From the sound of it, the author expects to see a group of xenophobic Mid-Westerners sharpening their pitchforks and warming up their feathering tar. Even though we Mid-Westerners make easy targets, I don't think that's the reason why I oppose a sale like this.
He goes on to write some strong points: brands can be better positioned for profitability or international sales through foreign acquisition and that the profit motive can be sufficient to broaden brand horizons. But it's this line of thinking that touches on where I found my major objection to the acquisition.
Vara later cites a review of Budweiser's purchase by Belgian InBev that I think illustrates it best:
Is it un-American? Yes. I think it is. But maybe not for the reasons he mentioned.
Adam Smith, Wages, and Profits
So, like most JB drinkers (or ex-JB drinkers), I'm a fan of their spin on American Mythology, the 200 year history of the Beam family, and the picturesque farmland where the Bourbons are made. But my question in evaluating this deal is "where does the money go"?
(...to be continued)
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