Polman’s Brexit burden
Unilever vehemently denies that its proposals to move its HQ from london to rotterdam are anything to do with Brexit.
The rationale from Unilever House is that it merely needs to simplify its unwieldy Anglo-Dutch structure, and the majority of its shares are held through the netherlands side – so move along, no Brexit rows here please.
However, given the timing and the fact that chief executive Paul Polman has been a critic of Brexit, it is inevitable the link will be made.
Alison McGovern, the MP for Wirral South, whose constituency includes Unilever’s historic Port Sunlight base, explicitly blames Brexit. Pro-leave financier Peter Hargreaves argues the contrary, waving aside the idea that the consumer goods giant will be in the vanguard of a corporate Brexodus as ‘wishful thinking’ by remainers.
virtually any big corporate decision right now is bound to be viewed through the prism of Brexit – it is an inescapable subtext. And while it may not have been the main motivation for the move, the leave vote won’t have helped sway its decision in favour of this country.
Unilever’s commitment to Britain in terms of jobs and investment is unaffected for the time being. it employs 7,300 people in the UK, more than double the number in the netherlands, and is basing beauty and home care, two of its fastest-growing divisions in this country, with a pledge to continue to spend £1bn annually here for the next five years.
A company like Unilever takes its responsibilities far too seriously to turn its back on a major market in a hasty or ill- considered way. But it is legitimate to harbour doubts as to whether, in a postBrexit world and with a centre of gravity that has moved to Holland, this level of commitment to the UK will continue over the longer term.
if Brexit is one undercurrent beneath Unilever’s move, then the threat of takeover is another. Again the company denies it is seeking a safer haven in the netherlands, where the regime is seen as being more protective against corporate predators, but it could hardly be blamed if that were the case following an unwanted bid from US giant Kraft Heinz last year.
The laissez-faire attitude towards takeovers in this country leaves some of our best-loved companies dangerously exposed. Unilever, quite reasonably, does not want to be the next Cadbury.
The main consequence if Unilever goes fully Dutch is that its shares will no longer be allowed in the FTSe 100, which would affect millions of savers via their pension schemes. That would be a great shame because it is exactly the sort of investment many small shareholders seek out. it offers a combination of good returns – £1,000 invested when Paul Polman took over in 2009 would now be worth around £2,770 – along with genuine social responsibility.
Unilever lobbied FTSe russell, the company that compiles and oversees the Footsie indexes, to be allowed to stay in, but was told it would no longer meet the rules if it is not incorporated here.
This is a bizarre outcome. The FTSe 100 is graced by a string of companies with virtually no heritage or operations in the UK, including Chilean mining group Antofagasta, Middle eastern hospitals group nMC Health, Greek bottling business Coca-Cola HG and global commodities giant Glencore. They are allowed in the FTSe 100 nonetheless because they are incorporated in this country even if it is little more than a brass plate.
Yet Unilever will be slung out of the FTSe 100 regardless of its long history, its deep roots, its thousands of employees and an army of shareholders who want to invest in it as a Footsie stock.
The panel overseeing Footsie admissions should think again and ask themselves what purpose the expulsion of Unilever could possibly serve.
Seventies style
John neill, the chairman of car components group Unipart, warned earlier this year that a no-deal Brexit was the worst threat to motor manufacturing in this country since the rampant trades union strife of the 1970s.
Since then, Jaguar land rover’s chief executive ralf Speth has also issued warnings and put some employees on a threeday week.
BMW is planning to shut its Mini plant for a month after the UK’s official departure to minimise disruption, and industry body the SMMT says there will be £5bn of tariffs.
Brexiteer MPs accuse motor industry leaders of scaremongering, but are their insights really superior to those of a seasoned industrialist like neill, whose views are based on 50 years of experience?