Recently, the Chief Executive of Carlsberg Malawi Brewery Ltd was overhead complaining against the effects of floatation of the local currency with a warning to citizens for dire consequences in eighteen months time. It is this outcry that has necessitated the need for a closer look at the economic posture by the company in Malawi. Why should Carlsberg complain about the floatation of the Kwacha and not citizens? Has Carlsberg now assumed partisan interests which are at variance to those by the People’s Party?
Far from it; the outcry by Carlsberg is not political but the manifestation of mistakes that were made when inviting the Danish investor from Copenhagen Denmark. The first salient point to understand is that Carlsberg Malawi Brewery Ltd is the only investment outside Denmark in which Carlsberg Copenhagen has equity. Those who have studied Carlsberg’s foreign policy know that it operates franchise business with its name. Therefore, when you travel across the globe you find the Carlsberg label; know that it is a franchise.
The case of Carlsberg Malawi is the manifestation of legacy of mistakes made by newly independent states in their quest to promote industrialization. When looking for the new investors, what may have been forgotten by the founding President the late Dr Kamuzu Banda was that regardless of history developed countries shared one common objective and that was exploitation. No one can disagree with me that both Europe and North America managed to develop so quickly through exploitative schemes in poor underdeveloped countries which came in the form of slave trade, imperialism and colonialism.
The Danish Court saw the approach by the Malawi Government for Carlsberg to open a brewery in the country as a golden opportunity to continue with exploitation through international business model. Consequently, Carlsberg Copenhagen pursued an integrated mixture of global and international marketing strategies. Bartlett and Ghoshal(1988 pp54-74) explain that international companies see overseas investments as appendages to a central domestic corporation while global companies sees overseas operations as delivery pipelines for a unified global market.
This is where the Malawian negotiating team failed to conceptualise. Needless to say, the trick by Carlsberg Copenhagen was not detected by the negotiating team comprising administrators and economist without an operations strategist. The consequences of those mistakes are the ones killing Carlsberg Malawi Brewery Ltd now. Just imagine, in spite of its nominal share capital, Carlsberg Malawi Brewery continues to import almost all its raw materials excluding water, electricity and labour. As if at no cost, besides this requirement, the Carlsberg Malawi Ltd has to send representative samples of all beer production batches for the preceding month to Copenhagen Denmark for quality standardization. These tactics when compared to Carlsberg’s franchise policy, the investment in Malawi is a neo-colonialist exploitative policy in a poor developing country.
Instead of the Chief Executive Officer of Carlsberg Malawi Brewery Ltd complaining against the neo-colonialist exploitative policy to Denmark, he has misdirected to the Malawi Government. Why has he done that? He is basically a chemical engineer who may not fully understand what is being discussed here. Carlsberg Malawi Brewery has matured after operating in this country since 1975.It is incumbent upon its major shareholders to conduct a value analysis of the company’s value chain.
A fundamental question for the Chief Executive Officer of Carlsberg Malawi Ltd to answer is does the company want to be treated as a charity simply because it offers happiness to citizens? No ways. It is incumbent upon the company to examine its expenditure patterns and eliminate the need for externalization of unnecessary large amounts of forex for paying for things that should be substituted with locally found inputs. While at moment the company has minimized the importation of expert employees from Copenhagen, it is sad there are frequent visits by consultants who offer nothing to the local staff but get paid huge sums of money for their visits. Then he has to pay loyalty for the Carlsberg name. All these are pipes for siphoning money from the local company.
Our appeal as patriotic Malawian citizens is that now is not time for any company to be treated as a social enterprise simply because it offers employment to Malawian citizens. Employment is not a favour but a factor of production. No company can operate without employees. It is also being unreasonable for the Chief Executive Officer to complain against payment of high taxes to government. If companies do not pay taxes to government, how does government realise public revenue? The outcry is misplaced. If indeed it is company’s policy to close shop in Malawi, know that Premier Millers owners of Castle Breweries having been looking at opportunities to invest in Malawi. Unlike Carlsberg Copenhagen’s policy of treating foreign investments as delivery pipes, Premier Millers operates foreign operations as multinational companies in which each investment is seen as an independent portfolio. This is why every Castle Brewery develops its own taste derived from locally found raw material used.