business news in context, analysis with attitude

Got the following email about a joke I made at Tesco's expense, commenting on a story about how it is launching a fresh foods ad campaign designed to counteract the bad publicity it got during the horse meat scandal:

That was a pretty cheap shot against Tesco this morning  -- apologies if you covered this at the time, but Tesco was buying meat that went back to a French company called Spanghero.  I was living in Europe at the time, and followed the story closely as I was fascinated as to how this could happen, given the attitudes toward food in Europe and the origin-labeling regulations.

When the horse meat scandal erupted, there was an immediate investigation, and it was found that a Romanian abattoire (slaughterhouse) was selling properly marked and labeled horse meat to Spanghero - which is absolutely legal.  The abattoire was held blameless -- they were doing everything they were supposed to be doing. There are folks who are looking askance at Romanian meat, particularly horse, because of other issues, but not at the Romanian firm in particular.

Spanghero was flat-out lying to its customers -- they were receiving boxes of frozen meat clearly labeled 'horse, and shipping it out in boxes labeled 'beef'.  I'm more than a little surprised that they're still open...probably a move to placate the 140 employees in a region where there just aren't many large employers.

It wasn't Tesco's fault or intention - any more than it was the fault or intention of Ikea, Lidl, Carrefour, or any of the other dozens of retailers who ended up ditching thousands of euros of inventory.  It was costly all across the board -- both in terms of profits and in goodwill.

I'll add, by the way, a gentle reminder that horse meat is regularly found on tables across Europe -- and meat distributors in the UK saw a huge jump in sales, as people were actually seeking out horse meat to try out of curiosity.  I've tried it - served to me at a large function where I didn't know what it was until after dinner -- I don't like it, but if someone else wants to eat it, that's their deal.

So continuing to backhand Tesco just because they happened to get caught in the swirl of deception is pretty unfair -- it's a black eye they just don't deserve to have.

Okay, it was a cheap shot. But it was just a joke.

Regarding the Market Basket controversy, one MNB user wrote:

In the article this morning regarding the dispute among the Demoulas family members running Market Basket, you comment that "...the more I read about the case, the more it seems like the board is headed down a road that could improve ownership's compensation at the cost of higher prices and margins ... which could screw up the whole enterprise."  Any specifics you could cite there from materials you have come across?

I'll let MNB reader Herb Sorensen reply to that via the email I got from him at around the same time:

I'm no expert on Market Basket, although I've worked in their stores personally a number of times over the years.  However, this conflict sounds like the classic margin battle of winning retailers, originally A&P back in the day when they were pioneering the way to become the world's first billion dollar business - and followed a couple of decades after their founding geniuses passed on, by Walmart.

A&P built their success on building traffic and volume as JOB #1, and this through minimizing prices.  So severe was the margin discipline, that a store manager who turned in margins higher than 19% would be reprimanded for excessive profits, that should have been plowed back into lower prices to drive more traffic to the store.

As Marc Levinson explains in "The Great A&P": "To John [Hartford,] though, a large profit was a warning light, signaling an attempt to maximize short-term returns by paying workers inadequately or by holding prices too high. Either way, too much profit in the short term was bad for the company’s position in the long term. As he saw it, excessive prices would reduce volume. Once that occurred, A&P would be forced to spread the fixed costs of its warehouses and factories across a smaller customer base, which would require it to raise prices even higher. No matter what the short-term implications for the bottom line, damaging A&P’s reputation as the low-price grocer was a risk he was unwilling to take. In 1940, John went so far as to tell his division presidents the company should not attempt to earn more than $7 per common share; if earnings were above that, then their prices were simply too high."

When the discipline of the Hartford brothers was no longer at the helm at A&P, the company crumpled like a cheap suit.  If the Telegraph story is accurate, I'm voting for the present management, against those seeking higher profits.

Yeah. What he said.

We had a piece the other day about a new baseball bat that has been designed with a slanted nob that, the inventor says (with some scientific verification), would cut down on injuries to players when swinging. But no players want to change bats, and manufacturers don't want to make them. Which struck me as a kind of denial of reality that serves as a good business lesson.

Well, the MNB community being what it is, I got the following email from a reader:

All UCL injuries to baseball pitchers could be eliminated by taking the baseball out if the glove with the hand under rather than on top of the ball. When one of you guys was waxing lyrical about Strasburg I told you you were watching a guy on the downward path to oblivion. He had his UCL operated on shortly thereafter. If you are a Mets fan, their latest star will soon face the same fate (if his shoulder does not go first). Hundreds of millions in pitching injuries every year. All avoidable. Now that's an eye opener.

Anyway, I asked Dr Mike Marshall about the new bat. Here is his response which you can also read this Sunday on his web site,

Dear Sir,

This bat handle reminds me of the U-1 baseball bat when I played shortstop. It had no knob at all, just a smooth enlargement of the handle.

The Hamate carpal (wrist) bone rests against the proximal phalange of the little finger. The 'hook' of the Hamate bone extends laterally to the Ulna bone side of the wrist. The 'hook' of the Hamate bone is the lateral boundary of the Carpal Tunnel through which the tendons of the Flexor Digitorum Superficialis and Profundus pass to attach to the middle and distal phalanges (fingers), respectively.

If, instead of holding the knob of the handle of the baseball bat in the little finger/metacarpal joint, baseball batters place the knob of their baseball bat on the heel of their hand, then they roll the knob of the baseball bat over the top of the 'hook' of the Hamate bone.

Baseball batters that fracture the 'hook' of their Hamate bone use their front arm to start and stop their baseball bat.

Therefore, my first recommendation is for baseball batters to change to using their rear arm to start and stop their baseball bat.

Failing that, I recommend that baseball batters move the knob of their baseball bat away from the 'hook' of the Hamate bone.

With apologies to Mr. Phelan (the inventor), I do not believe that his knob design prevents baseball batters from placing the knob over the 'hook' of the Hamate.

Sounds like a scientific disagreement.

Though where else can you read a business site that uses phrases like "Flexor Digitorum Superficialis"?

On another subject, MNB user Jacque Copeland wrote:

Kevin, in reference to the conditions that led to Fox & Obel’s shutdown, if you haven’t already, I’m sure you will see the connection and enjoy immensely reading Carl Hiaasen’s new book “Bad Monkey.”

Read it, gave it a glowing review here a few weeks ago, and you're right - that's exactly what the story made me think of. 

Lots of comments re: the Rolling Stone cover controversy...

One MNB user wrote:

I would like to read the story because I have been told it is good journalism and informative, but I wont because of the cover. My position is the position of most people, its not the article, it’s the cover!
Rolling Stone did themselves in! No one to blame but themselves!

From another reader:

How “many” people does it take for these retailers to deem something offensive or do they just know it when they see it?

And another:

Certainly another case of “Just because you can do something, doesn’t mean you should….”.  Additionally, one can add that based on the reactions of some Retailers, “Just because you should so something, that is enough of a reason to do something” (or in this case NOT do something…)

And still another:

Rolling Stone has always courted controversy. It needs to in order to maintain some of its street cred as a youth orientated publication. While putting this young man on the cover is certainly insensitive in many people’s eyes it’s in keeping with Rolling Stone’s commitment to covering stories – in a way the MSM  won’t investigate for a variety of reasons.  Hopefully the story touches on why with all the billions we spend on gathering intelligence the US government can’t seem to pick up on the most obvious clues in any number of the so-called terrorist events. (why do they always seem to happen in conjunction with a “drill” that’s being run-but that’s another story).
If we’re talking about painting public personalities in the media-especially ones involved with crime-on the cover of magazines-and in effect portraying them as something different than what the public believes they are- what about the coverage of the Martin/Zimmerman case where the MSM  has insisted on showing the picture of Mr. Martin as a 12 year old rather than how he actually looked at the time of his death.  Pictures from the time of Martin’s death-his social networking account and police photos show a much different image-one of a strapping young man, and from some of the photos- some would say wanna-be thug not the sweet-looking 12 year old the MSM would have us believe was killed during the confrontation via their constant use of the much younger Martin’s photo.  If we’re talking about insensitivity, wrongful portrayal, and general misleading of our understanding of these figures-where does the difference lie in terms of misleading the public when it comes to comparing the two treatments of  the public images of these young men?  
The point is, American culture always exploits criminality and some would argue the MSM in particular has always been used to present the kind of picture the powers that be want  in order to condition the general public’s view about events and policies maybe even agendas those ruling our society desire-for our own good they might say. Rolling Stone is pretty straight forward in courting controversy. But I wonder rather than focus our outrage over the bombing on  Rolling Stone shouldn’t something be aimed at the government agencies that are supposed to protect us from these events-especially when there are oftentimes plenty of clues and warning signs that make you wonder if  anyone’s really doing their job.  Remind me again why all our communications are monitored...

From yet another reader:

I understand why people think the victims should be on the front page, but the story isn’t about the bombing or the victims, it’s about how a smart kid with rock-star good looks develops into a ‘monster”.  They use the word Monster on the front cover, and the juxtaposition of the rock-star looking kid with the word “Monster” ought to make people think and want to know how this happened.

I know the knee-jerk reaction is to think Rolling Stone glorifying a terrorist and to vilify them for doing so.  But the deeper question is to ask how this came to happen—in order that we can try to keep it from happening again.  This kid and his brother snuck up on our entire culture, and we really ought to be thinking about the why and how of it.

It is interesting to see how the popular reaction is not to see the word “monster”, but to see the kid’s face and think they are glorifying him.

And, on another subject, MNB reader Joan Toth wrote:

Kevin, I really enjoyed today’s column because I had the EXACT same experience with Wende. I purchased a tasting for 10 during a PSU event auction a few years ago. My sister, who lives in Portland, gathered up a crowd and we descended on WVV last fall. On a spectacular fall day, Wende spent more than two hours with us, regaled us with great stories, enthusiastically led us in tasting their premium pinots, and generally had a blast. Having been on my fair share of winery tours, I wanted to skip the tour and get right to the tasting. Wende made it totally worthwhile. I even got a follow up phone call a month or so after the event asking me if she could do anything else for us.

Now here’s the really interesting part of the story. Did you ask her how she came to be working at WVV? I did. Jim Bernau, the owner, got to know her when she was waitressing at a local place he frequented for lunch. Lo and behold, he asked her to work for him, bringing her terrific customer service skills to WVV. Moral of the story: great talent is everywhere. If people love what they do, their enthusiasm is infectious. Lucky for us – she loves to talk about and sell wine!

I did know that. And am equally impressed.
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