Saturday, January 26, 2008

Retail Memo: The Blair Wal-Mart Project

Tony Blair taking a tour of an Asda supermarket after Britain's number two retailer was acquired by Wal-Mart in 1999. "Value Tony" was a champion of low prices for British consumers during his many years as PM.
Call him the "Pro Low-Price Prime Minister." London's is reporting in tomorrow's edition that the details of a secret meeting between former British Prime Minister Tony Blair and a senior Wal-Mart official just months before Wal-Mart bought UK supermarket chain Asda have finally been released, nine years after the acquisition deal by Wal-Mart was finalized. The meeting occurred in February, 1999. Wal-Mart bought Asda in July, 1999.

The Telegraph reports that Bob Martin, the Wal-Mart senior executive, complained to Blair at the meeting about Britain's restrictive planning rules. The minutes of the secret meeting, released under the Freedom of Information Act, show that Martin told a not unsympathetic Blair that "the main obstacle to Wal-Mart in entering the UK market was zoning and planning controls." As a result, Martin told Prime Minister Blair, Wal-Mart concluded that the only way the mega-retailer could come into the UK was via an acquisition of an existing company.

The minutes are at odds with the Prime Minister's administration, which at the time told the UK press there were no discussions with Wal-Mart at any time about planning and zoning issues.

The minutes also describe an exciting round of lobbying by Wal-Mart officials prior to and surrounding the company's acquisition of Asda, one of Britain's "big four" supermarket chains, along with Tesco, Sainsbury's and Morrisons. Asda is Britain's second largest retailer, after number one Tesco.

The Telegraph report says Wal-Mart's Martin let on in the meeting with Blair and his key aides that "a big deal in the UK might be in the offing." Martin sensed no objection to such a deal from Blair. In fact, the Prime Minister even seemed a bit excited about it.

Later, when the deal was made and Wal-Mart acquired Asda four months after the secret meeting, word of the Tony Blair, Bob Martin meeting became public, although the minutes were not released at the time. When that happened, Blair defended his meeting with Martin, and in fact was happy and pleased with the deal. Regarding the meeting and the Wal-Mart's acquisition of Asda in general, Blair said: "I make no apologies for it whatever. We (British consumers) pay too much not just for our basic goods, but across a range of services."

It appears we can now add the title of "Pro Low-Price Prime Minister" to Blair's growing list of titles and achievements.

Read the full story here. There's also a link on the Telegraph story to a pdf file of the minutes from the Blair, Martin meeting so you can read them in their entirety if you like.

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