business news in context, analysis with attitude

Even though we took a few days off last week, the world kept turning, stories continued breaking, and things remained, in the words of our favorite pop philosopher, “simply complicated.”

Let’s see if we can summarize some of what we missed (with brief commentary in italics)

  • Fast Food Foreign Policy. The Washington Post reported last week on how the American fast food experience seems to pervading the Asian continent, and that “41 percent of respondents in mainland China eat in a fast-food restaurant at least once a week, compared with 35 percent in the United States.” Furthermore, “61 percent of Hong Kong residents, 59 percent of Malaysians and 54 percent of respondents in the Philippines say they frequent fast-food places at least weekly, underscoring how Asians are more likely to carry their meal in a bag than people in any other region. By contrast, 11 percent of European adults eat take-out meals weekly, the survey found.”

    McDonald's has more than 600 stores across 105 Chinese cities, with plans to add more than 100 annually in coming years, while KFC has more than 1,200 outlets with plans to open at least 200 more this year alone.

    Talk about a foreign policy that ought to ruin the US in the eyes of the world…why can’t we export lobsters from Maine, barbecue from Arthur Bryant’s, and gumbo from New Orleans…?

  • Survival of the Biggest. Fascinating piece in the New York Times last week about how, “across Latin America, supermarket chains partly or wholly owned by global corporate goliaths like Ahold, Wal-Mart and Carrefour have revolutionized food distribution in the short span of a decade and have now begun to transform food growing, too.

    “The megastores are popular with customers for their lower prices, choice and convenience. But their sudden appearance has brought unanticipated and daunting challenges to millions of struggling, small farmers.” The problem, according to the NYT is that if these small farmers go bankrupt, they could “join streams of desperate migrants to America and the urban slums of their own countries. Their declining fortunes, economists and agronomists fear, could worsen inequality in a region where the gap between rich and poor already yawns cavernously and the concentration of land in the hands of an elite has historically fueled cycles of rebellion and violent repression.”

    If we’ve learned nothing else in the last week, it is that a tectonic shift on one part of the planet, even one under water, can have an enormous human, cultural, political, geographic and financial toll on the rest of the world. That knowledge, if nothing else, ought to inform how our nation and our business institutions deal with other peoples and other nations, knowing that much of the world rests in a delicate balance.

  • The Future Ain’t What It Used To Be. The New York Times reported that while Wal-Mart wanted its top 100 suppliers to be using radio frequency identification (RFID) technology by January 1, 2005, “the technology is not yet ready to meet the needs of either Wal-Mart or its suppliers.”

    The NYT wrote, “To date, most of Wal-Mart's suppliers have not figured out inexpensive ways to automate the printing and application of the tags. Although read rates are improving, no one who uses the technology has systems that can reliably read the information 100 percent of the time in factories, warehouses and stores.” And, the data is not “integrated well enough with other technology to initiate changes in manufacturing or shipping schedules that could actually save the large sums of money that would make the investment worthwhile.”

    We remain intrigued by the hypothesis that RFID is a plot by Wal-Mart to bankrupt every other retailer on the planet, while it drives the growth of the technology with petty cash. If this indeed is the case, then it seems like Wal-Mart may have to wait a little longer for retail world domination to kick in…

  • Getting Juiced. Good piece in last week about how Florida orange growers have accused Brazilian orange juice companies of dumping products in the U.S. The complaint, according to SG, “was filed with the U.S. Department of Commerce by Florida Citrus Mutual in Lakeland, the state's largest growers' representative, and Florida's Natural Growers in Lake Wales. Four of the largest Brazilian growers and juice manufacturers were named in the complaint. Other private companies in Florida joined in the complaint.

    “Brazilian companies are being accused of shipping their products to the United States at prices that are drastically lower than their estimated cost of production. During the 2003-04 season, reports say they shipped orange juice at prices 37 to 78 percent lower. As a result, the price that Florida processors pay the state's growers for oranges has been lowered substantially, weakening the market.

    “Brazil is the largest producer of orange juice in the world, Europe being their biggest customers. But in 2001-02, the amount of orange juice shipments to the U.S. rose 53 percent despite the fact that Florida growers had an almost record year for the orange crop.”

    Should Brazilian companies be found guilty, the US could impose a retaliatory tariff.

  • McDonald's Reconsiders Fowl Play. McDonald's Corp. reportedly is considering whether to require its processors to use “controlled atmosphere killing,” in which chickens are put to sleep with an inert gas, as the sole acceptable method for slaughtering poultry.

    We used to think that this was all much ado about nothing, until we read that this new method would “replace a slaughtering process in which chickens are hung by their legs on a moving conveyor line and pulled through an electrified vat of water.” While we’ve generally thought of People for the Ethical Treatment of Animals (PETA) as a radical fringe group, in this case we think they’re in the right.

  • Fast Food Fitness. Bally Total Fitness is offering free four-week memberships to any of its more than 400 US health clubs – to anyone who eats at any of Yum Brands’ more than 18,000 restaurants that operate as Taco Bell, Pizza Hut, KFC, Long John Silver's or A&W Restaurant.

    Cholesterol test not included.

  • You’d Better Watch Out. We loved the story in the Washington Post last week about the Texas father who got fed up with his three sons’ behavior in the days before Christmas. They were fighting and verbally abusive to each other, and so he warned them that the Nintendo system that he’d intended to give them for Christmas would instead be sold on eBay.

    The oldest child double-dared the father to do it. So he did.

    If more parents had the courage to do stuff like this, we’d live in a better, more considerate world. Good for him.

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