The Economist - USA (2019-07-20)

56 Business The EconomistJuly 20th 2019

2 sate’slicenceforuseuntil2023.

Inthelongertermthepictureisblurrier

still.Counterintuitively,bansmayendup

benefitingBayer.Lastmonththecompany

announcedthatitwillspend€5bntore-

search alternatives to glyphosate-based

weedkillers.Thatcouldpositionit aheadof

rivalswhenthepopularweedkilleriseven-

tuallyphasedout.

If, that is, Bayer survives that long.

Someinvestors,includingElliott,a feisty

Americanhedgefund,havecalledforthe

companytoexcisethetoxicagribusiness

froma healthydrugmaker(Bayer’soriginal

operation).Toreassureinvestorsthecom-

pany’smanagementiscutting12,000jobs

and has considered selling its animal-

health,sun-creamandfoot-carebusiness-

es.Butithasresisteda fullsplit,having

foughthardtocombinethetwofirms.

A separationwould containthelegal

risktoa smallerunit.AnalystsatabBern-

stein,a researchfirm,whorecommenda

split,pointoutthatresearchoverlapand

technology transfer between the health

andcropbusinessesareminimal.Bayer’s

valuationissolowthata willingbuyermay

come forward. Many shareholders may

pounceontheopportunityto ridthem-

selvesofthemigraine. 7

“S

weat is fun!” insists Pocari Sweat, a

Japanese soft drink loved by active

types across Asia. This summer millions of

Hong Kongers have taken up a new sport:

marching, originally against a controver-

sial extradition bill and increasingly in op-

position to their territory’s pro-Beijing

government. Many do so clutching bottles

of the isotonic beverage.

Pocari went from a source of hydration

to a symbol of political resistance after a

Facebook exchange on July 9th between Po-

cari Sweat Hong Kong and a customer re-

vealed that it was withdrawing adverts

from tvb, a local television network that

pro-democracy activists say has portrayed

them unfairly. In the statement Pocari

Sweat said that it had taken a “proactive

step” to urge tvb “to respond to public con-

cern”. Pocari cans have since starred in doz-

ens of revolutionary memes.

Around the world consumer-facing

companies have embraced progressive

causes dear to the coveted demographic

group of 20- and 30-somethings. In Hong

Kong, however, corporate activism is com-

plicated by consumer attitudes on the

mainland, where anti-Beijing sentiment is

often viewed as treasonous.

Some companies side more or less

openly with the protesters. Wonder Life, a

Hong Kong maker of condoms, posted on

Facebook that consumers’ objections

about tvb had led it not to advertise on the

channel. Others are more oblique. The

Hong Kong arm of Cigna, an American in-

surer, said it would stop advertising on tvb

and explained in a social-media post that

“we are constantly reviewing our media

planning strategies to promote our brand

and our mission to be your health and well-

being partner.” In June Ztore, a local e-com-

merce startup, tried to avert a boycott by

distancing itself from a founder who

backed the extradition bill.

Just as appearing to stand up to the au-

thorities can burnish corporate reputa-

tions, seeming to kowtow to them can do

harm. Yoshinoya, a chain of Japanese res-

taurants which endeared itself with protes-

ters after running a Facebook ad that

seemed to mock heavy-handed Hong Kong

policemen, faced a backlash when it de-

leted the ad and the boss of its Hong Kong

franchise-owner told two newspapers that

he had taken part in pro-police rallies. On-

line maps shared by protesters tag the

chain as unfriendly to the cause.

Some businesses fall foul of demonstra-

tions through no clear fault of their own.

Sun Hung Kai Properties is facing calls for a

boycott of its 24 big shopping centres after

some accused the developer, Hong Kong’s

largest, of letting the police clash with

protesters on its premises on July 14th. The

company says it did not call the police and

was unaware of the deployment.

Firms with a presence on the mainland

as well as in Hong Kong face the most del-

icate balancing act. Seeming to back prot-

ests may play well with Hong Kongers but

backfires among mainland influencers.

Last month Nike pulled a line of limited-

edition trainers from being released in Chi-

na after its Japanese designer’s opposition

to the extradition bill prompted calls for a

boycott on Chinese social media.

Many brands are studiously trying to

stay neutral. On July 10th Pizza Hut, which

had stopped advertising on tvb days earli-

er, issued a statement to explain that its

promotion had simply ended as scheduled.

Three days later Tempo, which makes toilet

paper, posted on Facebook, which is popu-

lar in Hong Kong, and on Weibo, the main-

land’s biggest microblogging site, that it

would carry on advertising with tvb, earn-

ing it plaudits from the Global Times, a

Communist Party newspaper.

Fearing a backlash Pocari’s mainland

offices in Tianjin and Guangdong disasso-

ciated themselves from the Hong Kong

branch. “We are two completely different

entities,” they said in a statement. Head-

quarters in Japan has not weighed in pub-

licly. On July 10th the Hong Kong arm post-

ed a short statement on its Facebook page

in which it apologised for any “inconve-

nience” caused by the conversation on July

9th. Marchers thirsting for undiluted polit-

ical electrolytes may feel they are the ones

who have been inconvenienced. 7

HONG KONG

Taking sides in political disputes carries opportunities for companies—and risks

Brands and protests

Pocarious position

Thirsting for change