Australia celebrated when we got Vegemite back in Australian hands. Bega Cheese bought the iconic brand from US multinational Mondelez International, (formerly Kraft.) The $460 million dollar corporate acquisition sparked a glittering fireworks display of patriotic fervour.
But what did it get us?
The new Australian owners promptly foisted on us Blend 17. New, premium and expensive, a less quintessentially Australian Vegemite you could hardly imagine. Consumers hated it — after being launched at double the price of Vegemite, Blend 17 was reduced to less than half in order to clear the shelves.
Image credit: reddit user mrchips1231
But at the level of corporate backlash, the dominant sound was silence.
I find it hard not to imagine the counter-factual where such a spin-off was launched after the sale of a proud Australian brand to a foreign company. The outrage would have been palpable. Radio hosts would not have shut up about it, from Fitzy and Wippa all the way through to Alan Jones. The absence of a furious frothing backlash is amazing.
The quick withdrawal of the “posh” Blend 17 reminds us ownership isn’t everything. In the end, the consumer is sovereign. A foreign company can’t survive without meeting local tastes. Neither can a local brand. In a competitive marketplace the preferences of the owner are not nearly so important as those of the consumer.
This is why haters of foreign ownership in Australia are wrong*. The foreign companies that buy into Australia are not owning us. They’re serving us.
Is Made in Australia just ‘fuck off we’re full’ in fancy clothes?
In few other domains is discrimination on the basis of national origin so warmly applauded as the economic. Perhaps because economic activity is measured on a national basis we think of economies as things that are inherently national.
If so, this is an example of reification, where the abstract becomes concrete. A concept adopted for measurement shapes up our understanding and eventually our behaviour. We fight to defend what we see as ours, waving back trade flows and investment flows we imagine as foe not friend. ‘Buy Australian’ campaigns run hot and on change.org signatures rack up, petitioning against foreign ownership.
Economies aren’t national though. The only countries where economic borders match the ones in the atlas are isolated autarkic regimes like North Korea. Internationalisation is getting faster. According to the World Bank, international trade flows are now over 50% of the value of all global production, up from 25% in 1960. Meanwhile foreign direct investment flows are equivalent to 2.5% of global GDP, up from half a per cent in 1960.
The idea we can win without everyone else winning too is increasingly outdated.
A little bit of give and take
Australia benefits from foreign companies coming here and buying assets in order to serve us. In the 1920s Vegemite itself looked doomed until the company that invented it — Fred Walker & Company — entered a joint venture with the Kraft Cheese company. The new larger joint company gave the scale and heft needed to overcoming consumer doubts about its taste and write it into our national story forever.
As anyone who drives a Ford ute will tell you, foreign ownership is no impediment to a product being iconically Australian. Vegemite has been made in Melbourne forever, but since 1935, when Fred Walker died, Vegemite was owned by Kraft, which itself went through a dizzying array of corporate structures including the tobacco conglomerate Phillip Morris. Through all that time we expertly – but carefully – spread it onto our toast and crunched down just as the butter melted.
Australia also takes advantage of the chance to invest in other countries. An Australian retailer owned malls in London – right up until Westfield sold them to a big French company on Tuesday. An Australian toll road owner charges Americans to drive on Washington DC’s Beltway. That certainly doesn’t make the Beltway Australian.
Foreign investment comes and goes. With all the cheap money floating round in the world at the moment, Bega Cheese could easily be bought out again and Vegemite could pass out of Australian ownership once more. I hope that if that happens we understand it makes little difference. The spread is Australian no matter what.
* There are exceptions:
- Where foreign companies are intimately tied up in state apparatuses (hello to the Chinese state-owned enterprises);
- Where the assets are especially sensitive and significant. (NSW senators are firmly in this second category. Honesty even renting them out is probably a bad idea).