Boots needs to help Walgreens quit its addiction to tobacco

US Outlook

One of the strangest things about living in the States is walking into the equivalent of Boots and seeing a selection of cigarettes and tobacco products behind the counter that would warm the cockles of Dot Cotton’s heart. Walgreens, CVS, Rite Aid … they all make a pretty penny selling fags, cigars and chewing tobacco, as well as booze.

It’s a strange juxtaposition: trying to convince customers that their health is the number one concern – but hey, if you want to give yourself cancer, heart or liver disease, we can help with that too.

As an ex-smoker I appreciate how hard it is to quit. Admirably, CVS, the second-largest chain of US pharmacies, announced its intention to quit back in September and followed through. It took a $2bn (£1.2bn) gamble that customers will reward it for doing the right thing – actually being a health company rather than a company willing to sell anything so long as there’s a buck in it. The gamble will be worth it because by repositioning itself as an actual health company, CVS will more than make up for the $2bn worth of tobacco sales it sacrificed.

Walgreens, the owners of Boots, is too addicted to smokes to take the same decision. Selling people something to which they are chemically addicted, even if it will kill most of them before they are 65, is too sweet a plum to take out of the pie. Boots’ investors knew about this before they accepted Walgreens’ bid last year. Should they have cared more? Certainly.

CVS went a step further this week, resigning as a member of the US Chamber of Commerce over the latter’s stance on tobacco sales outside America. You see, it’s fine for smoking in public, advertising and marketing to be restricted in the US. Presumably executives don’t want their own kids to start smoking.

But restricting sales and marketing abroad – where American tobacco companies make most of their money? Where lung cancer is pretty much untreatable and where rates of cancer are skyrocketing? An outrageous restriction of business freedom!

The chamber and CVS got into a bit of a spat over it. The chamber is the victim of “misinformation”, of course, saying only that it opposes “singling out certain industries for discriminatory treatment”. CVS is right to stop paying its membership fees, and others companies considering themselves to be in the health industry should follow suit.

Another industry that has got a free pass for supporting the tobacco industry for donkey’s years is investment banking, where practically every institution wants a piece of that tobacco money, resulting in a bizarre world where they tout their charity investment while at the same time shilling for the fag industry.

JP Morgan was house broker to BAT for years, while at the same time running a very lucrative charity investment management business. So, run the marathon to raise money for a cancer charity, then let JP Morgan look after it while also recommending investors buy shares in tobacco companies because they operate virtually unregulated in emerging markets. Nice.

If you’re not trying to position yourself in the healthcare or charity industry, selling or shilling for tobacco companies is probably justifiable, to yourself at least. If you’re positioning yourself as a healthcare company, as Walgreens, Rite Aid and CVS do … well, there is only one of those three that is actually willing to be true to its word.

For the sake of Boots’ own reputation, gutless Walgreens must do the right thing and quit smoking.

Be very scared of what Republicans wish for

The Export-Import Bank is one of these things that nobody should have heard of, and most still haven’t – a quasi-public institution that provides loans to foreign companies wishing to buy American goods. It has been around for years, quietly doing its bit to make sure that American capitalism gets all the help it needs. Until now – its charter has not been renewed by Congress thanks to the Republican majority acting at the behest of those powerful industrialists the Koch brothers. Unless it is renewed, it will cease to exist by Christmas.

Its demise is important, and not in a good way. Many US businesses rely on foreign customers being able to raise finance in order that they can actually buy their goods, particularly big-ticket capital goods. So General Electric and Boeing, two of the Ex-Im Bank’s most regular customers, have urged Congress to act. Those two are far from alone, with the manufacturing industry already predicting dire job losses if the Ex-Im Bank does close.

This is a perfect illustration of why it is almost always a bad idea to give Republicans what they want. The campaign to force the Ex-Im Bank’s closure has become a cause célèbre among the radical right and a litmus test for moderate Republicans, if such a thing exists any more: want it closed and you’re a freedom-loving capitalist; want its charter renewed and you’re a big-government communist. It’s absurd, but then this is a party that has Donald Trump leading in several polls.

Regardless of the politics involved, the argument over the future of the Ex-Im Bank highlights a fundamental weakness and lie within the American economy. That being the belief that American companies do it alone, that they operate in a pure vacuum of capitalism. They don’t. They rely, and always have done, on the generosity of the American taxpayer. I don’t mind that. Making sure your nation remains as competitive as possible makes perfect sense. But at least Europeans have the decency to call this sort of deal what it actually is: a subsidy.

My bet is that enough members of Congress will side with business rather than the Kochs and the Ex-Im Bank will get its charter renewed before it is forced to close. Jobs, exports and most importantly political contributions are on the line. If not, Republicans will get what they wish for, something that should scare everyone.