Confused by Conglomerates? Consider These Three Things When Researching Corporate Ownership.

There is a difference between brand identity and corporate identity but finding the latter may prove to be more difficult than reading the name on a label. While the average consumer in a retail store may not know—or indeed have a desire to know—who owns each product in their shopping cart, there are legitimate reasons why the matter of corporate ownership may become important.

Whether by a series of opportune mergers and acquisitions, the planned purchase of an entire supply chain, or through strategic efforts to saturate a given category, the portfolio of brands a parent company may own can be confusing—if not nearly impossible—to track down.

This can create a challenge for researchers trying to match brands to corporations or a local sales manager to their global c-suite leaders. Consider the difficulty an academic researcher might have evaluating potential conflicts of interest whenever any given funding source could have financial interest in dozens of varying industries. In other cases, one industry behemoth may have acquired most—if not all—of the supply chain. How might a small- or mid-sized competitor evaluate that and engage with potential suppliers without the risk of supporting their primary competition?

Navigating the web of corporate ownership and affiliation can be complex, but there are certain paths to take to find clarity.

Follow the Trail of Reporting

Activities that bring varying brands under new parent company ownership often attract some level of media attention—even smaller acquisitions tend to get listed in local business publications. For much larger companies, however, M&A activity is likely to be covered heavily in local, national and industry-specific news.

Determining the parent company of a certain product or organization can often require looking beyond the current news cycle. A parent company may have made headlines for acquiring a brand a decade ago, but that brand could still operate the same today with little or no mention of its parent entity.

Duracell—the worldwide battery company with headquarters in the United States and Switzerland—is an example of how this happens. While the brand itself has existed continuously since the 1920s, there have been many changes in its ownership that might be hard to track, especially when only evaluating today’s reporting on the company.

The current owner of Duracell, Berkshire Hathaway, Inc., is a clear example of the diverse holdings a single company today may own. Beyond batteries, the company operates in industries as varied as insurance, building materials, food condiments and media outlets. While stories from the time of its acquisition of Duracell provide context to better understand the details of the Berkshire Hathaway transaction, even stories published in highly specific battery-industry trade journals don’t mention the brand’s ownership today.

Don’t Be Fooled by Apparent Competitors

Belgian beverage company Anheuser-Busch InBev has practically stacked the shelves in their favor when it comes to global beer consumption. While beer brand loyalists may feel a competitive rivalry between what they consider domestic or imported, craft or classic, many of these beer brands—as diverse as Budweiser, Corona and Stella Artois—originate from this same parent company.

In fact, owning seemingly competing products in the same category isn’t all that uncommon. U.S.-based Proctor and Gamble owns two diaper brands, at least four fabric detergents, multiple shampoos and several competing detergents and cleaners… among many others. This is an “illusion of choice” that often goes unnoticed by consumers.

For researchers, the challenge comes from finding quality source materials that bypass branding in favor of data.

Use Resources to Help Connect the Chain of Ownership

Researching corporate ownership may feel a lot like genealogy and following the trail of corporate affiliation can certainly branch out like a family tree. One brand’s parent company can have another parent company that is held by yet another organization on top of that. This can go on for many “generations,” and can potentially complicate research. Especially as partially owned companies, sister companies and joint partnerships come into play, bypassing information geared toward consumers and looking at more direct industry filings can prevent research from being derailed by chaos.

The information exists, but finding it can be difficult. Public financial records, regulatory disclosures, press releases and investor reports all disclose information that—when analyzed together—can help determine corporate affiliations. Additionally, researching executive and board staffing can provide hints to corporate affiliations as well. While many legal entities can exist in the chain of corporate ownership, because they have unified operations, they will often have the same people in positions like chief executive or chairperson.

Using research tools that bring these information sources together can help make the corporate ownership research process less manual than mapping out an entire corporate tree and scouring company biographies and announcements.

Electronic Voting Experts Express Concern About Wireless Voting Machines

A group of 30 researchers, activists and scientists signed a letter this month urging the federal government to issue an official warning to states that use voting machines with integrated wireless technology that the machines are vulnerable to hacking. The voting machine experts said they had “grave concerns” that such manipulation could “wreak havoc on an election.”

 

Sarah Revell, a spokeswoman for Florida’s Department of State, defended her state’s use of such machines, saying they “are not connected to the internet” and “that when transmitting election data everything is encrypted and authenticated.”

 

But Andrew W. Appel, a computer scientist at Princeton University, said a “modem talking through the cell phone network really is more connected to the internet than they like to think.”

 

He said hackers could use a portable cell tower, known as a Stingray, to intercept the wireless signals or use an internet-linked cellular network to introduce malicious code into the machines.

 

“If you can talk to that modem, and if there are any security flaws in the voting machine software that talk through that modem, then the voting machine could be confused into installing new software that changes the vote,” he said. (MCCLATCHY DC)

Supreme Court Rebuffs Challenge to CO’s ‘Amazon Tax’

Last week, the U.S. Supreme Court refused to hear a challenge to a Colorado law aimed at enabling the state to collect more of the sales taxes that go unpaid each year by Colorado residents on their out-of-state purchases, costing the state more than $170 million in lost revenue each year, according to recent estimates.

 

The law, passed in 2010, requires businesses located outside the state, including online retailers - hence the nickname of “Amazon tax” given to such laws - to either collect and remit sales tax on behalf of their Colorado-based customers or inform those customers of their obligation to pay their state’s 2.9 percent sales tax and submit information about those customers and transactions to the state. The Direct Marketers Association (DMA) - now known as the Data & Marketing Association (DMA) - challenged that law on the grounds that it violated the U.S. Constitution's Commerce Clause, barring undue restrictions on interstate commerce. But the 10th U.S. Circuit Court of Appeals in Denver upheld the law in February, and the Supreme Court’s refusal to take up the case leaves the 10th’s ruling in place.

 

“We are disappointed the Supreme Court did not take the case and are concerned it will only encourage other states to adopt similar laws and regulations that are designed to put arbitrary burdens on out-of-state sellers,” DMA Senior Vice President of Advocacy Emmett O’Keefe said in a statement.

 

Max Behlke, director of tax and budget policy for the National Conference of State Legislatures, likewise, said: “Other states, which have seen their revenue decline in sales tax, would be more apt to introduce and enact legislation like Colorado’s [law].” (REUTERS, DENVER POST)

Janus Ruling Not Hurting Union Membership

In June the U.S. Supreme Court ruled in Janus v. AFSCME that unions could no longer require public workers who choose not to join a union to pay union fees even if they benefit from union efforts.

 

That ruling has adversely impacted union finances. For example, in Pennsylvania, unions had to refund about 15 percent of the $42.5 million in union fees they collected from nonmembers and executive branch members last year.

 

But the Janus ruling hasn’t led to the mass defections some had predicted. And in some unions, membership has actually increased since the verdict.

 

At the time of the ruling, 50,072 state executive branch employees in Pennsylvania were union members. Now 51,127 are members. New union memberships have outnumbered defections in Oregon’s Local 503 chapter of the Service Employees International Union (SEIU) by a margin of three to two. And membership in the Chicago chapter of SEIU has increased from 23,800 members to 26,000 since August 2017.

 

“I think the right wing thought this would decimate public-sector unions, and they were clearly wrong,” said Kim Cook of the Cornell University Worker Institute, which supports union and worker rights.

 

One reason union membership hasn’t dropped is because unions stepped up their efforts to attract new members even before the Janus decision. Democratically controlled states have also recently taken actions to bolster union membership. For instance, New Jersey, limited the period of time during which public workers can leave their union. And New Jersey, California and Washington have prohibited public employers from discouraging union membership.

 

But Ken Girardin, an analyst for the fiscally conservative Empire Center for Public Policy in New York, said significant membership declines will be coming in the next few years.

 

“Based on what we’ve observed, you will likely see a multi-year drop in membership, driven chiefly by the fact that people aren’t going to join in the first place,” he said. “The next cohorts of employees won’t join at the same rate as the retirees they are replacing.” (GOVERNING)

States Rush to Fill Gaps Left by Federal Shutdown

As the partial closure of the federal government continues to drag on, states across the country are stepping up to assist the tens of thousands of their residents impacted by the longest federal shutdown in U.S. history.

 

Brand new Govs. Gavin Newsom in California, Michelle Lujan Grisham in New Mexico, and Tony Evers in Wisconsin, all Democrats, have each assured furloughed workers they will receive unemployment benefits. Oklahoma Gov. Kevin Stitt (R) called for his state’s Banking Department to direct banks to restructure loans or extend payment deadlines for federal workers unable to make their mortgage payments during the shutdown. And Connecticut Gov. Ned Lamont (D) has proposed a public-private partnership with a local bank to provide furloughed workers interest-free loans that would be guaranteed by the state.

 

But some expressed concern about the potential impact of such actions on state budgets with no end in sight to the shutdown.

 

“If this goes on another few weeks, it will be very significant for some state budgets,” said Scott Pattison, executive director of the National Governors Association. “There’s not extra money. So if they move funds into something the federal government isn’t covering, then something else is cut at the state level or they’re actually dipping into rainy day funds.” (HILL)