Unilever says moving their HQ out of London is nothing to do with Brexit – but in business the truth isn't always important
Might crucial investors perceive Unilever’s move as a further sign that Brexit is compromising the UK’s value as a country to do business? I can certainly see it happening. ‘Who might be next?’ is being asked across corporate canteens today
Unilever – the consumer goods behemoth behind Marmite and Persil, Magnum and Ben & Jerry’s, Flora spread and Dove soap – has just dealt an almighty blow to Britain’s status as a business hub, whether intentional or not.
After months of deliberations, the UK’s third biggest company, a stalwart of our stock index, has announced that it has chosen Rotterdam over London as the location for its new consolidated headquarters. Up until now it had been jointly based in the UK capital and the Dutch port city. By mid-morning on Thursday, even Wikipedia had cottoned on that such peaceful hybrid existence was history.
The firm itself was quick to defend the decision and dispel inevitable accusations that it had been fuelled by anything happening in March 2019. “Let me categorically say that this had nothing to do with Brexit,” chief executive Paul Polman told reporters. “We think both countries are highly attractive investment climates and we will continue to invest in both countries as a result of this.”
But actions – especially in the brutal world of corporate strategy – speak louder than words, and despite his best efforts to set the record straight, Polman has served up a timely reminder of what’s at stake as we hurtle towards the EU’s exit door.
Unilever’s products are mainstays of the British home. It claims that its best known brands can be found in 98 per cent of households across the country. The Marmite row that ensued in 2016 over price hikes as a result of the tumble in the pound left scores of Brits with the bitterest taste in their mouths. Many perceived a part of our cultural heritage to be under attack. So how must they feel about a grand building, in a prime location on the river Thames with an unobstructed view of Westminster, no longer being deemed an appropriate HQ for one of our corporate crown jewels?
Operationally at least, Unilever has assured us that this move will change very little. Yes, a small number of jobs could be relocated to the Netherlands, but it stipulated that the 7,300 people working for Unilever in the UK, and the 3,100 people in the Netherlands, would be “unaffected by the changes”.
Polman wasn’t the only executive to stress the group’s unfettered commitment to this country, but we shouldn’t underestimate the lemming effect. Might smaller companies in the process of choosing a location for their headquarters look to Unilever for guidance? It’s not unthinkable. Might crucial investors perceive Unilever’s move as a further sign that Brexit is compromising the UK’s value as a country to do business? I can certainly see it happening.
If there’s one thing that being a business journalist has taught me, it’s that the truth is often far less important than the impressions and the off-the-record chatter. “Who might be next?” is being asked in conference rooms and corporate canteens across London, Brussels and beyond.
Other companies with a foot in two countries include Royal Dutch Shell and Eurotunnel. Both already have a nod to the trading bloc in their name. And what could this mean for the potentially colossal initial public offering of Saudi Aramco which the capital has been so desperate to win? Anything at all?
The next 12 months may well shed light on some of those questions. For now, though, perhaps we can distract ourselves by tucking into our toast and Marmite. In 1990, quintessentially Swiss Toblerone came under the ownership of Kraft foods and it’s now owned by consumer giant Mondelez. Fortunately, despite US ownership, it tastes just as sweet. And sometimes, that’s all that matters.