“Nigeria is a safer place for our company than Greece” says Heineken CEO
Davos, Switzerland, became the temporary capital of the planet during the last week of January 2011 as business and policy leaders converged at the World Economic Forum to tackle pressing issues.
Two questions come to mind: Why do they do it? Will it make any difference?
France’s President Nicolas Sarkozy, well-known for his pithy sayings, made a big show of Franco-German “united-we-stand” and gave, unwillingly, an answer to the two, when he warned off those who speculate against the currency: “For those of you, who want to bet against the euro, be careful how you invest. We are determined to ensure the strength of the euro," he said. Hedgies (aka hedge funds) were probably trembling in their sky boots.
European Central Bank President Jean-Claude Trichet also played down the eurozone’s problems, calling them no more serious than those faced by other major economies such as Japan or the United States. After such a show of confidence, Greek Prime Minister Georges Papandreou cannot have been too pleased by comments made by Jean-François van Boxmeer, CEO of Heineken, who reportedly told other executives at a breakfast in Davos that he thought Nigeria is safer for his company than Greece.
Eurozone countries have been battling to prevent a debt crisis from spreading from Greece and Ireland to Portugal and other economies in the bloc.
Heavily indebted Greece was forced to seek help last year from the European Union and International Monetary Fund to avoid a default that many feared could have sunk the decade-old common currency project.
Mr van Boxmeer, clearly not impressed by this show of political confidence – after all, Heineken reports in euro – decided not to mince his words when he said: “Nigeria is more predictable than Greece. I’m speaking of our business."
Mr van Boxmeer said he gauged a country by three primary criteria: population; GDP growth; stability.
In recent years Greece has not scored highly on these. Its population shows a rapid increase in the percentage of the elderly people and its youth a willingness to fight running battles with the police. In 2010, Greece’s Gross Domestic Product (GDP) dropped 3.9 percent, a decline which will widen to 4.1 percent in 2011.
In Heineken’s third quarter 2010 earnings report, the company released a statement attributing a 1 percent drop in volume in Central and Eastern Europe and a drop in consumption due to austerity measures in places like Greece. In comparison there was 12 percent volume growth in Africa with Nigeria accounting for the most growth in the region.
On 16 February 2011 Heineken will report its full year 2010 figures and we might get further confirmation for Mr van Boxmeer’s harsh words on Greece.
