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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 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 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.
If only.
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 Ghana Suez Ghana
became independent and the new leader Kwame Nkrumah had the cheek and audacity
to refuse to sell his cocoa exclusively in London 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 Nottingham ,
they grew and grew until they found a spot on every High St
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 New York 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 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 Britain
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,
Prove it.
Let us see the books then.
Can’t. They’re in Switzerland
Oh. That’s a pity.
Isn’t it.
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.
Fat chance.
Here is my very own little beef with the well loved
favourite of the British High St
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.
Anyway.
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
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
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.
Fat chance.
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.
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