Big Business Contradictions: Big Bazaar, Vinci Construction & Airtel

ACORN International

pix-construction09Mumbai Luckily, there are a lot of folks out there who are smarter than the average bear and might be able to point out to street organizers like me and our team what is really going on in the weird calculations of many huge businesses.   Seems like I’m running into more than my fair share of head scratchers.  I’ve got theories, but would love to have a better grip.

Here are some cases in point:

  • The Price of Plastic: Meeting with ACORN India’s organizer in Bangaluru (Bangalore) the other night in Delhi, he shared some interesting news from our waste pickers in that city.  There were suddenly new “market makers” for plastic.  Where our brokers were normally paying 6 rupees per kilogram, Big Bazaar, the India-based hypermarkets, were now offering 30 rupees per kilo, and Reliance Fresh, another grocery competitor was offering 26 rupees per kilo.  ACORN International’s Suresh Kadashan told me the big problem he was trying to solve with our leaders in the association was how to get our plastic to the higher priced venues without the costs of transport trumping the advantage, which is no small problem, but at a price 5 times what they can get now, it’s worth the climb!  And, why do these big boys, like the Future Group and the Reliance Group want to try and corner the plastic market at these prices?
  • Vinci Construction: A week ago I had never heard of this company, but the fault is all mine, since it turns out to be a huge $6 billion revenue global construction company headquartered in France with operations in 8 of the 10 countries where ACORN International organizers.  Our friends with  our new ACORN International affiliate, ACORN – CC in Prague, tell me that Vinci is the 3rd largest company in the European Union, which I need to confirm, but under any terms they are huge.  They also are on the verge of signing an agreement to construct 15 kilometers of highway through the Khimki Forest outside of Moscow in a wildly controversial and destructive environmental move.  Reading their most recently translated annual report from 2009, the company celebrates their human rights record, their sustainability program, and their environmental record.  Why would a global company like Vinci, risk their entire international reputation and the prospects of doing business in much of the world for a relatively small (though no doubt lucrative) contract to destroy a virgin forest and the Moscow environment?  It makes no sense when looking at their brand and normal self-interest.
  • Airtel: Airtel is the crown jewel of the Bharti empire in India.  Because of our long standing India FDI Watch Campaign focused on the entry of big retail in India, we have watched their attempt to move from telecommunications into a retail partnership with US conglomerate, Wal-Mart, which more than casual interest.  We also noted recently in Kenya that they were petitioning the central bank there to level the playing field so that they could more competitively use mobile phones to facilitate money transfer and money payment schemes.  Given the lower phone rates, fierce competition, and ubiquitousness of cell phones in India and the lack of access of most of the poor to banking services, why hasn’t Airtel implemented the same technology here in this country?  Is there a deal of some kind with the huge state owned banking establishment?  Is this part of the trade against modification of FDI in retail, banking, and insurance in India for cell carriers not to move around the system or is this somehow a problem caught in the broadband spectrum sale of 2G which cost the country billions in lost revenue, generates daily headlines, and has several big time company executives in the dock now?

We have some big time companies that either could and should do the right thing or in the case of raising the price for recycling, are doing it, but may not be committed to doing much other than trying to corner the market.  Are there pieces we are missing here or what does it take to help push them in the right direction?

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