Concern about the effects of global brands

Global consumer brands damage the economies of developing countries, distorting competition, driving out local rivals and creating consumer aspirations which often lead people into debt.

David Benady 120x120

By David Benady

Global consumer brands damage the economies of developing countries, distort competition, drive out local rivals and create consumer aspirations which often lead people into debt.

These negative perceptions are not just the views of some wild-eyed anti-corporate campaigner fresh from the latest G8 riot, fired up on reading No Logo, Naomi Klein’s Jeremiad against global corporations.

Far from it. This downbeat assessment of the effects of brand globalisation is shared by some of the world’s most influential people, according a survey conducted by brewing giant SABMiller.

As part of a series of debates about globalisation, the world’s second largest brewer surveyed 1,011 members of YouGovStone’s panel of senior “influential” people drawn from politics, business, media, non-government organisations, health, education and other fields.

That these leading players should judge globalisation in such a pessimistic light is a blow to those who promote the idea that brands can help make the world a better place. At a discussion in London this week organised by SABMiller to highlight the survey, Coca-Cola chairman and former chief executive Neville Isdell sang the praises of his own global brand and spoke enthusiastically about the work it is doing to become “water neutral” so it puts back “into nature” the water it draws out to make its drinks. “We are trying to do the right thing,” he said.

According to the YouGovStone respondents, the idea that brands contribute much to the welfare of developing countries is far from the truth.

Two thirds of them said local cultures suffer negative impacts from the introduction of global consumer brands and a similar proportion said the same of local heritage brands. Meanwhile 78% felt that multinational consumer brands have an unfair advantage over local brands and 70% felt that governments in developing countries rarely understand the full impact of multinational consumer brands entering their markets.

SABMiller chief executive Graham Mackay admits his disappointment at the findings. “We would challenge the research findings that global consumer brands are perceived to have an unfair advantage over local brands: this is clearly not the case in the brewing industry,” he says. “In fact we would strongly disagree with the conclusions of the research that there is a conflict between the demands of consumers for ethics and sustainability and the demands of shareholders. We believe that those companies that understand and respond to the needs of their consusmers will invariably deliver greater value to their shareholders,” he adds. But full marks to Mackay for producing research which – unlike other work – is not manicured, rigged or watered down to flatter his own point of view.

However, the research does create challenges for those in charge of brands and hope to promote them globally. They need to show not just that they have a nice side and will put profits into good causes. They must demonstrate that introducing a brand into a developing country will not mean death for local rivals, but will invigorate their markets. They must also be careful about the way their advertising affects local cultures and aspirations.

The great globalisation debate is likely to get increasingly heated in the tough economic conditions the world faces. Brands still have a long way to go to persuade the most influential people that they are a global force for good.

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