Britain plc is still for sale

NOW that cheerleading for Coca-Cola’s £3.9bn buyout of Costa from Whitbread is dying down, it is worth taking a second look at the transaction and what it really says about Britain plc.

And as we are about to lose one leading brand to a ruthless American multinational, it is also worth girding ourselves against the departure of Unilever, one of Britain’s world-beating enterprises, from these shores.

Remarkably, a timid and Brexit-preoccupied Government does not seem to care.

Let’s take chief executive Alison Brittain’s decision to sell Costa rather than go ahead with a demerger – it was greeted on the London stock market like the second coming.

The short-term attractions of a premium of up to 70pc are hard to resist. But Whitbread is not just any company. It may not brew ale any longer, but with a 276-year history as a hospitality champion and a good corporate citizen which pays its taxes and is headquartered in the UK, it ticks many boxes. This at a time when better governance is meant to be top of the Tory agenda.

Whitbread in effect has been bullied by activist investors into abandoning the only global challenger to Starbucks.

Whether Coke began its pursuit of Costa before the demerger plan is irrelevant. Whitbread chairman Adam Crozier and Brittain might not have tolerated the pursuit but for activists opening the door.

What is certain is that a slimmed-down Whitbread of Premier Inns and some restaurants as a medium-term proposition is a myth. It will be a sitting duck for takeover.

We saw that with Cadbury. Schweppes was first demerged then Kraft came for the rest. Brittain already is being cagey about her own (much enriched) future once the Costa deed is done.

WHICH brings us to Coca-Cola. The likelihood must be that its demand for coffee, to fill its 10m vending machines worldwide, will quickly make Costa’s roasteries in south London irrelevant.

And as is the case with its new rival Starbucks, Coca-Cola is not a corporation which in the past has felt it had a duty to pay its full whack of American taxes.

In a report dated March 2017, the Institute on Taxation and Economic Policy found that over an eight-year period, Coke made profits of $23.9bn and paid taxes of $4.9bn. This amounts to a US corporate rate of 20.4pc when the tax code was still 35pc.

Coke has also been named as one of 30 US companies which have used tax havens to allegedly shelter earnings. It has a complex of 15 subsidiaries ranging from Bermuda to the Cayman Islands and Costa Rica in which it holds cash. Even though Britain now has a low corporation tax regime, there is no reason to think that Coke’s behaviour as owner of Costa should be different.

Costa, however, is small fry when compared to what may happen to Unilever.

Chief executive Paul Polman did a fine job in keeping Unilever independent when it was besieged by the owners of Kraft-Heinz. Now there is a serious danger than an enterprise with a golden heritage in the UK could be off to Rotterdam. Documents will be posted soon outlining a proposal to effectively delist in London and switch domiciles.

The change is being made in the name of simplicity but it is in effect a reverse takeover by Dutch interests.

In the interests of keeping the FTSE100 as Europe’s dominant index and ensuring Unilever’s tax base and intellectual property remains in the UK, this unwanted transfer of control should be rejected. The Government needs to make its voice heard.