Competition in Civilized Society

Several news outlets (e.g., WSJ) are reporting this morning that Japanese company Suntory Holdings has agreed to purchase Beam, Inc., the maker of Jim Beam whiskey, “for $83.50 a share…a 25% premium over Friday’s closing price.” Beam hasn’t yet decided to accept the offer, but if it does, “it would create the world’s fourth-largest liquor company by volume.” Currently Suntory is just in the top 15 companies by volume, but is nonetheless able to fund the $13.6-billion transaction with a combination of cash on hand and lender financing.

The company says it doesn’t plan significantly to reduce the scale of operations or workforce of Beam, as it “hopes to use Beam for a ‘major offensive’ in the global markets—particularly Japan, the U.S., Australia, Europe and the emerging markets….” Whiskey, particularly higher-priced brands of bourbon, are in vogue again, and this is something upon which Suntory plans to capitalize. (Incidentally, I wonder whether both the rise in consumption of whiskey, and the fact that the fourth-largest liquor company in the world is a ripe acquisition target, are due to Barack Obama’s nihilist economic policies.)

Contrast this way of dealing with a competitor—making an offer to buy him out on terms that benefit everyone—with the recent news from France’s taxicab industry. CNET reports today that striking taxicab drivers in Paris actually vandalized an Uber car, slashing the tires and smashing the windows, the latter causing passengers to suffer lacerations to their hands. The cab drivers apparently resent losing business to Uber, which pioneered the business model of having customers “use a smartphone app to easily summon a car, inform the driver about your destination, and pay.” The company got its start in Paris, but instead of giving Uber thanks for its time- and money-saving innovation, or instead of seeking to become part of Uber (or a competitor’s) network, Parisian cab drivers are assaulting Uber’s drivers and vandalizing its cars. Moreover, the cab drivers in France have apparently used whatever political clout they have to impose a country-wide “rule starting January 1 that requires a minimum 15-minute wait before an Uber-like service can actually pick up a passenger.” As my friend Frode, who posted this story on Facebook this morning quipped, this is necessary “to level the playing field.” I guess in France, the slogan is, “If you can’t beat them, pummel them”?*

At least here in the United States we still have a veneer of companies actually competing for their market share. GM, which has been given, at taxpayer expense, a huge leg up in the auto industry, has just unveiled its 2015 GMC Canyon, a midsize truck that GM, according to the Wall Street Journal, hopes will help it “unseat Toyota as the leader in the mid-size pickup market.” GM already has another midsize truck, the Colorado, which it just released last year. The company will try not only to increase its market share for mid-size trucks, but also help increase overall demand in this market segment. The Colorado will be marketed to “active people who like using their truck for work and play,” while the Canyon will emphasize luxury and high-tech conveniences.

Toyota, in response, is vandalizing GM’s factory and assaulting its workers. Actually, the WSJ reports that Toyota “gave the Tacoma a restyled exterior look and an upgraded interior,” and may be planning another “face-lift.”

*Remind anyone of speed limits on trains imposed in a certain novel of increasing relevance to today’s world?

(By the way, if you sign up for Uber using the code “wary4,” then you will get $20 off your first ride, and I will get $20 in my Uber account. Win-win, assuming you need Uber’s service on an upcoming trip.)


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