Back in early April when lockdown was stretching out before us like a vast expanse, I noted in this letter just how good it would finally be to have a freshly poured pint at a pub. With the pubs now open again, I aim to fulfil my pledge to conduct a “one-man’s People’s QE” to support the drinking establishments of our great nation – for as long as my liver can handle it at least.
I’m taking a short break to St Albans, the cathedral city with the highest concentration of pubs in the UK. It’ll be interesting to see how the local boozers there are getting on – with it being the publican capital of the UK, I wonder if the atmosphere there can be used as a proxy for health of the British pub scene more broadly.
Don’t worry, Capital & Conflict will continue in my brief absence – Nickolai Hubble will be sharing his market insights with you tomorrow and Monday.
In the meantime, I’ve been pondering the question of where a British investor should go if they’re seeking greater liberty than in Britain. The more I think about it, the more I think there’s an escape plan to be hatched in the regions of the world that have inherited British customs and culture, but are not under the direct control of Westminster, like the former limbs of the British Empire which can now flex freely in whatever direction that they like.
There’s the British Overseas Territories like Bermuda and the Cayman Islands, but also countries like the Bahamas which are now fully independent of the crown, but still have English common law, and through connections to the City of London have become a key node within the global financial system.
Could a British investor seeking liberty find refuge in the shadow of the British Empire? Whatever the truth is, I’d like to find out…
I’ll leave you today with a wild tale of adventure from a reader who decided to leave the UK in the late 70s…
At the tender age of 26 in 1979, the UK was in a mess, I had just resigned my job and I thought, “Let’s find a job abroad and see a bit of the world”. Four months later I was on a plane with my wife heading off to Bangkok, having secured a position with a subsidiary of Inchcape out there. Never having been further east than Munich, I looked at my wife beside me on the plane, and said “We will give this a minimum of one year and maximum five years, OK?”.
It was certainly an experience. This was before Thailand became popular with backpackers and very few people spoke English. On arrival we were put in the MD’s colonial style house while he was away on leave. Sitting on the balcony, being waited on by his man servant, with the sounds of frogs croaking in the nearby klong (canal), we thought this could be OK.
We worked hard and played hard. After identifying the IT needs of the diverse group of companies, I gradually introduced the hardware and software necessary to replace the written ledgers and accounts, providing a more modern management information system. After training up one of my staff to take over from me, it was a question of “what next?”.
I was asked to take over temporarily (for a year) as GM of the wines and spirits subsidiary. Alcohol was very tightly controlled then and I had to deal regularly with the Customs and Excise department. There were very high taxes on imports of many goods. Sausage meat incurred 100% ad valorem tax and as a Committee member of the Bangkok Saint Andrew’s Society I was tasked with ordering the haggis for the annual Burn’s Supper. I managed to speak to my friends at Customs and have the haggis classified as “religious food”, which was duty free.
Just under the five years and I was transfered in a Marketing role, to the wines and spirits subsidiary in Hong Kong. I spent thirteen very happy years in Hong Kong and I am quite concerned about current events there. (Not least because I have a son and grandchildren living there). Hong Kong was Inchcape’s “head office” for its wines and spirits business and I was sent on exploratory expeditions to see if we could expand into previously closed markets. I was once sent to Vietnam to see how we might get involved. I had to go to Hanoi first to see the communist party department in charge. They told me they had recently done a deal to set up a factory to produce Martell Cognac in Vietnam and “why do you want to import spirits instead of making them here?”. Later, in Saigon I was investigating the market to understand the distribution channels, talking to stall holders and shops selling imported spirits. On asking why the price of Hennessy XO was so low, the shopkeeper openly said “Oh, you want the special Hennessy XO from France. That is much more expensive”. After much research I discovered that spirits were sold under bond in Singapore, shipped to Cambodia, and then smuggled over the border into Vietnam, by the Vietnamese Army. I suggested to my boss that trying to compete with the Vietnamese Army might not be a good business model and we did not proceed.
Inchcape restructured its wines and spirits business to set up a joint venture with Diageo and LVMH and I was made CEO for HK, China and Taiwan. Dealing with China was always interesting. We sold to the government monopoly who all the international hotels, etc. had to buy from, but we also sold to duty free dealers in Hong Kong who managed to get it into China somehow. (I thought it better not to ask to much about how, but I know many government owned companies in China were involved). We had a 10% share in a winery in Beijing making western style wine, which we market and imported to Hong Kong. The JV board meetings were interesting, the accountant was also the company representative of the Communist Party. I remember a board meeting where the accounts, just didn’t add up, and I just looked at fellow board member from Pernod Ricard and it was obvious he did not understand the figures either. It would have been a big loss of face to have challenged them so we let it go. Heading back to the hotel we passed Tiananmen Square and wondered how the demonstration would end. It was three days before the massacre.
We tried to get the agency for Stolichnaya Vodka which involved a very drunken trip to Taiwan with the Chairman of Stolichnaya, a trip to Moscow (being told by my local mentor not to talk in one room because it was bugged) and finally reviewing the accounts of the Solichnaya subsidiary in Singapore that we were being asked to buy into, only to realise was also being used as a money laundering operation.
I came back to the UK in 1997, but I have never had any regrets about living and working overseas. I would, however, like to emphasize that the UK is a wonderful place to live. When you have lived and worked in countries where the rule of law in suspect or corruption is endemic, it makes you realise how lucky we are.
Thank you again to all who’ve written in with their thoughts and experiences on the topic of leaving the UK for greener pastures – I remain perpetually surprised and humbled at the sheer range of different ages, backgrounds and life stories of the folks who read this letter.
And with that, I’ll see you all again on Tuesday.
All the best,
Editor, Capital & Conflict
Category: Market updates