Re: Britain's Worst Supermarket : Tue May 14, 2013 10:34 pm  

Dally wrote:

I see Tesco are one of those companies with more than their fair share of offshore subsidiaries.

I thought you knew that the British Virgin Isles is the world's leading supplier of Value Baked Beans. Tesco buy them from there and then sell them at a great loss to the undeserving British consumer.

Prior to the Pepsico takeover of Walkers Crisps, Walkers would buy potatoes from British farms, slice and fry them, add flavours, bag them and sell them to British supermarkets and would then pay corporation tax on their profits.

These days the same Walkers crisps factories now buy their potatoes from a Swiss subsidiary, even though the Swiss subsidiary still buys the potatoes from the same British farms. The Walkers factory then processes the potatoes and sells the crisps to another Swiss-based Pepsico subsidiary, this second subsidiary then sells the crisps to British supermarkets and the Walkers factory no longer pays any corporation tax because they no longer make a profit.

Anyone seriously expect Gideon to change anything here?

Re: Britain's Worst Supermarket : Wed May 15, 2013 3:26 am  

cod'ead wrote:

I thought you knew that the British Virgin Isles is the world's leading supplier of Value Baked Beans. Tesco buy them from there and then sell them at a great loss to the undeserving British consumer.

Prior to the Pepsico takeover of Walkers Crisps, Walkers would buy potatoes from British farms, slice and fry them, add flavours, bag them and sell them to British supermarkets and would then pay corporation tax on their profits.

These days the same Walkers crisps factories now buy their potatoes from a Swiss subsidiary, even though the Swiss subsidiary still buys the potatoes from the same British farms. The Walkers factory then processes the potatoes and sells the crisps to another Swiss-based Pepsico subsidiary, this second subsidiary then sells the crisps to British supermarkets and the Walkers factory no longer pays any corporation tax because they no longer make a profit.

Anyone seriously expect Gideon to change anything here?

Cod’ead, I’m going to go all corporate on you again here!

Tesco are the third largest retailer in the world (by revenue), and operate in many countries. However, unlike businesses such as Amazon and Starbucks, corporation tax (or country equivalent) is paid in a number of countries depending where profit – or loss – is made.

Tesco worldwide revenues in 12/13 excluding VAT were £65 billion. Worldwide trading profit before tax was about £3.5 billion. The UK represents around 66% of both revenue and trading profit.

Total Group tax was paid on profit before tax prior to any one-off charges - tax paid in the UK was about £350m, and tax paid overseas was about £230m

One-off charges in 12/13 were big: pulling out of the US, writing down UK property values, etc, meant that about £1.6 billion was taken from trading profits, meaning statutory profit of just under £2 billion.

If you look at percentage of tax paid on trading profit, you’ll see that it equates to approx. 16.6% worldwide. If you look at tax on statutory profit, it’s approx. 29%.

As a multinational retailer, Tesco are obviously successful. They are making around a 5% profit on revenues. Compare this to some large multinational manufacturers: businesses such as P&G, Unilever, etc consistently achieve 12%-15% profit. General retail really is a low margin, high volume business - scale is the only way to get shareholder returns.

Re: Britain's Worst Supermarket : Wed May 15, 2013 7:42 am  

Man in Madrid wrote:

... They are making around a 5% profit on revenues. Compare this to some large multinational manufacturers: businesses such as P&G, Unilever, etc consistently achieve 12%-15% profit. General retail really is a low margin, high volume business - scale is the only way to get shareholder returns.

So in essence, 5% profit on revenues is not enough and hence the company need to try to completely Tescoify the world, with the bullying and everything else that enables this to be done.

It has nothing to do with individuals and/or communities; with health or sustainability.

And therein lies the problem.

Re: Britain's Worst Supermarket : Wed May 15, 2013 9:21 am  

Mintball wrote: So in essence, 5% profit on revenues is not enough and hence the company need to try to completely Tescoify the world, with the bullying and everything else that enables this to be done. It has nothing to do with individuals and/or communities; with health or sustainability. And therein lies the problem. It's a PLC - profit is a shareholder requirement, otherwise there'd be no dividend. It's economics. Of course, you believe that it's nothing to do with individuals / communities / health / sustainability. Perhaps a read of the PLCs' Corporate Responsibility information may help. Details here: http://www.tescoplc.com/index.asp?pageid=87 Headlines from this (for 12/13):- ---------------------------------------- * Industry-leading performance in reducing CO2 emissions. * 9.3m people involved in some form of activity via Tesco (eg. Race For Life / Tesco FA Football Skills / Aerobics, etc). Every evening on the car park at our Bangkok Head Office, I watch around 200 staff and customers doing aerobics to blaring music! This is replicated at every large-format store in the country. * Staff and customer fundraising last year was >£13 million. The Charity of the Year was Cancer Research, and I believe that this is the largest single-business 12 month fundraising effort ever. * At least 1% of pre-tax profits donated to charity in 12/13, in addition to the £13m to the Charity of the Year. £74.5m. * This years Charity of the Year is Diabetes UK - we're after £15m!! .....but, don't let the positives blur the negatives, hey?

Mintball wrote: So in essence, 5% profit on revenues is not enough and hence the company need to try to completely Tescoify the world, with the bullying and everything else that enables this to be done. It has nothing to do with individuals and/or communities; with health or sustainability. And therein lies the problem. It's a PLC - profit is a shareholder requirement, otherwise there'd be no dividend. It's economics. Of course, you believe that it's nothing to do with individuals / communities / health / sustainability. Perhaps a read of the PLCs' Corporate Responsibility information may help. Details here: http://www.tescoplc.com/index.asp?pageid=87 Headlines from this (for 12/13):- ---------------------------------------- * Industry-leading performance in reducing CO2 emissions. * 9.3m people involved in some form of activity via Tesco (eg. Race For Life / Tesco FA Football Skills / Aerobics, etc). Every evening on the car park at our Bangkok Head Office, I watch around 200 staff and customers doing aerobics to blaring music! This is replicated at every large-format store in the country. * Staff and customer fundraising last year was >£13 million. The Charity of the Year was Cancer Research, and I believe that this is the largest single-business 12 month fundraising effort ever. * At least 1% of pre-tax profits donated to charity in 12/13, in addition to the £13m to the Charity of the Year. £74.5m. * This years Charity of the Year is Diabetes UK - we're after £15m!! .....but, don't let the positives blur the negatives, hey?

Re: Britain's Worst Supermarket : Wed May 15, 2013 9:49 am  

Man in Madrid wrote:

... * This years Charity of the Year is Diabetes UK - we're after £15m!!

Pity so much of the sugar-laden, processed crap produced/retailed by Tesco and its like are helping cause it in the first place, eh?

Man in Madrid wrote:

.....but, don't let the positives blur the negatives, hey?

Indeed. The homogenisation of high streets, the bullying of producers and councils, the absurdity of the chains of production (see horsemeat again), the driving down of choice and out of business small, independents, the treatment of staff (including a refusal to pay a living wage to many).

Let's stick those to one side and discuss the filthy lucre that the shareholders get and the sops to an idea of responsibility.

Re: Britain's Worst Supermarket : Wed May 15, 2013 9:51 am  

Man in Madrid wrote:

Headlines from this (for 12/13):-
----------------------------------------
* Industry-leading performance in reducing CO2 emissions.
* 9.3m people involved in some form of activity via Tesco (eg. Race For Life / Tesco FA Football Skills / Aerobics, etc). Every evening on the car park at our Bangkok Head Office, I watch around 200 staff and customers doing aerobics to blaring music! This is replicated at every large-format store in the country.
* Staff and customer fundraising last year was >£13 million. The Charity of the Year was Cancer Research, and I believe that this is the largest single-business 12 month fundraising effort ever.
* At least 1% of pre-tax profits donated to charity in 12/13, in addition to the £13m to the Charity of the Year. £74.5m.
* This years Charity of the Year is Diabetes UK - we're after £15m!!

.....but, don't let the positives blur the negatives, hey?

So they're wonderful for giving money to charities from staff & customer funding and then they avoid paying stamp duty on land purchases? Is that how it works? Maybe I could stop paying Income Tax and make a donation to the charity of my choice instead?

I also notice that they swing between fixed sums (£13m) and percentages (1% of pre-tax profit).

If they are so transparent and benevolent, then why the need for Cheshunt Properties LLP? or other shadow subsidiaries in Luxembourg, BVI etc?

Re: Britain's Worst Supermarket : Wed May 15, 2013 10:08 am  

cod'ead wrote:

So they're wonderful for giving money to charities from staff & customer funding and then they avoid paying stamp duty on land purchases? Is that how it works? Maybe I could stop paying Income Tax and make a donation to the charity of my choice instead?

Up to you, if that's what you want to do.

cod'ead wrote:

I also notice that they swing between fixed sums (£13m) and percentages (1% of pre-tax profit).

The fixed sum was an amount that staff and employees raised via fundraising activities - the target was (I think) £10m. The 1% of pre-tax profit was a donation, and something quite different.

cod'ead wrote:

If they are so transparent and benevolent, then why the need for Cheshunt Properties LLP? or other shadow subsidiaries in Luxembourg, BVI etc?

I didn't say they were transparent, I merely pointed out that, like with most things, there's always a different point of view. Regarding benevolence, I suppose it's a very subjective one to answer - I, personally, believe that the fundraising effort was great (it certainly brought many staff and customers together, and some friends / colleagues had fantastic experiences raising money whilst climbing to Mt Everest base camp / walking the Inca trail / etc). And to donate £74m, irrespective of what the annual profit was, should be applauded. But, as I say, that's my subjective opinion.

[DaveO]

Re: Britain's Worst Supermarket : Wed May 15, 2013 10:17 am  

Man in Madrid wrote:

Cod’ead, I’m going to go all corporate on you again here!

Tesco are the third largest retailer in the world (by revenue), and operate in many countries. However, unlike businesses such as Amazon and Starbucks, corporation tax (or country equivalent) is paid in a number of countries depending where profit – or loss – is made.

Tesco worldwide revenues in 12/13 excluding VAT were £65 billion. Worldwide trading profit before tax was about £3.5 billion. The UK represents around 66% of both revenue and trading profit.

Total Group tax was paid on profit before tax prior to any one-off charges - tax paid in the UK was about £350m, and tax paid overseas was about £230m

One-off charges in 12/13 were big: pulling out of the US, writing down UK property values, etc, meant that about £1.6 billion was taken from trading profits, meaning statutory profit of just under £2 billion.

If you look at percentage of tax paid on trading profit, you’ll see that it equates to approx. 16.6% worldwide. If you look at tax on statutory profit, it’s approx. 29%.

As a multinational retailer, Tesco are obviously successful. They are making around a 5% profit on revenues. Compare this to some large multinational manufacturers: businesses such as P&G, Unilever, etc consistently achieve 12%-15% profit. General retail really is a low margin, high volume business - scale is the only way to get shareholder returns.

What has any of that got to do with the example of Walkers under the ownership of Pepsico?

Do you consider the mechanisms outlined regarding how Pepsico have reduced the corporation tax paid by Walkers in the UK to (presumably) zero as they are now making a loss acceptable?

It is after all a legal way to increase profit and return for shareholders so does that trump all else and if it does, doesn't that mean the system is simply broken?

Re: Britain's Worst Supermarket : Wed May 15, 2013 10:55 am  

One of my favourites is the way some large manufacturers advertise their products by saying that, if you buy them, they'll donate a penny to charidee.

Re: Britain's Worst Supermarket : Wed May 15, 2013 12:40 pm  

Man in Madrid wrote: It's a PLC - profit is a shareholder requirement, otherwise there'd be no dividend. It's economics. Of course, you believe that it's nothing to do with individuals / communities / health / sustainability. Perhaps a read of the PLCs' Corporate Responsibility information may help. Details here: http://www.tescoplc.com/index.asp?pageid=87 Headlines from this (for 12/13):- ---------------------------------------- * Industry-leading performance in reducing CO2 emissions. * 9.3m people involved in some form of activity via Tesco (eg. Race For Life / Tesco FA Football Skills / Aerobics, etc). Every evening on the car park at our Bangkok Head Office, I watch around 200 staff and customers doing aerobics to blaring music! This is replicated at every large-format store in the country. * Staff and customer fundraising last year was >£13 million. The Charity of the Year was Cancer Research, and I believe that this is the largest single-business 12 month fundraising effort ever. * At least 1% of pre-tax profits donated to charity in 12/13, in addition to the £13m to the Charity of the Year. £74.5m. * This years Charity of the Year is Diabetes UK - we're after £15m!! .....but, don't let the positives blur the negatives, hey? But they treat their shop floor staff like crap (allegedly). Why is that if they are such a great company?

Man in Madrid wrote: It's a PLC - profit is a shareholder requirement, otherwise there'd be no dividend. It's economics. Of course, you believe that it's nothing to do with individuals / communities / health / sustainability. Perhaps a read of the PLCs' Corporate Responsibility information may help. Details here: http://www.tescoplc.com/index.asp?pageid=87 Headlines from this (for 12/13):- ---------------------------------------- * Industry-leading performance in reducing CO2 emissions. * 9.3m people involved in some form of activity via Tesco (eg. Race For Life / Tesco FA Football Skills / Aerobics, etc). Every evening on the car park at our Bangkok Head Office, I watch around 200 staff and customers doing aerobics to blaring music! This is replicated at every large-format store in the country. * Staff and customer fundraising last year was >£13 million. The Charity of the Year was Cancer Research, and I believe that this is the largest single-business 12 month fundraising effort ever. * At least 1% of pre-tax profits donated to charity in 12/13, in addition to the £13m to the Charity of the Year. £74.5m. * This years Charity of the Year is Diabetes UK - we're after £15m!! .....but, don't let the positives blur the negatives, hey? But they treat their shop floor staff like crap (allegedly). Why is that if they are such a great company?