Sunday, June 29, 2008

2008 Tesco AGM: Activist Groups Dominate; Shareholder Vote Sends Celeb Chef's Chicken Welfare Resolution to the Manure Pile; Not One Motorcycle Stolen

From the Fresh & Easy Buzz Editor's Desk: Tesco PLC, parent company of Fresh & Easy Neighborhood Market USA, had a sometimes intense and other times surreal Annual General Meeting (AGM) on Friday at the National Motorcycle Museum in Birmingham, UK, as predicted.

Along with such nuts and bolts discussions about sales and profits, the UK and world's ailing economies, growing competition from discounters at home like Wal-Mart's Asda and the German fighting tigers, small-format, no frills discount grocers Aldi and Lidl, numerous shareholder resolutions were discussed and voted on at Friday's AGM.

Tesco PLC shareholders passed every one of those resolutions accept one--celebrity chef and animal rights activist Hugh Fearnley-Whittingstall's chicken welfare shareholder resolution, which also just happend to be the one resolution among the many voted on Friday that received the most attention, focus and publicity in the UK and abroad.

The shaggy-haired and increasingly influential UK chef and activist (pictured at left) raised the fees required of him by Tesco to place his chicken welfare resolution, which if passed would have required Tesco to change its broiler chicken procurement and selling policy in the direction of selling more free-range birds, and less chickens raised in small or battery-type cages.

As was predicted by all (including the chef himself), Hugh Fearnley-Whittingstall's shareholder resolution went down to a resounding defeat, as Tesco shareholders gave his resolution--which would have curtailed sales of Tesco's famous "cheap" ~1.99-p chickens at the UK's number one retailer's stores--the bird, as the headline in the UK's Times Online put it Saturday.

Fearnley-Whittingstall's resolution did receive nearly a 10% yes vote (9.88% to be precise) by Tesco PLC shareholders, which was more than many observors thought it would get, but half of what the celebrity chef andpoultry activist was shooting for, which was a 20% shareholder approval vote. The resolution though did what Fearnley-Whittingstall wanted it to, which was to create tons of publicity over the chicken welfare issue, along with putting Tesco in the spotlight on it since it's the nation's leading food and grocery retailer.

Friday's 2008 Tesco PLC AGM also included a variety of critics and activist groups--ranging from members of the U.S. United Food and Commercial Workers union, who are attempting to get Tesco to sit down for a meeting to discuss unionizing the retailer's Fresh & Easy Neighborhood Market grocery stores in the U.S., to the group War on Want, which is claiming Tesco is paying workers at one of its clothing factories in India sub-minimal wages. Tesco denied that charge at Friday's AGM.

From the activist standpoint at the 2008 AGM--which among the many also included groups claiming Tesco isn't doing enough to curb its carbon output and another that argued Tesco is mistreating live turtles in its stores in China--there was a bit of something for everyone this year. For Tesco PLC, we suspect CEO Sir Terry Leahy and his executive team are rather glad it's over, so they can get on with the job at hand, which is selling food, groceries and non-foods.

And when it comes to retailing (and selling goods), Tesco is doing just that in the UK. At the AGM Friday, CEO Sir Terry Leahy stated Tesco now accounts for ~1-p out of every ~7-p's spent at retail in the nation by consumers. That's up from ~1-p out of every ~8-p's just a couple years ago.

Even though its lost a tiny amount of market share in the UK, Tesco still controls about 31% of the retail market in the nation. By comparison, that's about the same amount of market share the UK's number two (Wal-Mart-owned Asda) and number three 3 (Sainsbury's) retailers hold combined. The remaining about 40% of the retail pie is divided up by a cast of retailers, including number four market share leader Morrisons, Somerfield (which looks to be selling to the Co-op) the Co-op chain, Waitrose, Aldi, Lidl and numerous others.

The issues--animal rights, worker rights, the environment, unionization of Fresh & Easy in the USA--aren't going away for Tesco because the 2008 Annual General Meeting is over however. Far from it. These issues and more, along with the numerous activist groups promoting them, remain central to Tesco's job one, which is selling food, groceries, soft goods and hard goods at its thousands of stores in the UK and elsewhere throughout the world.

As the UK's largest retailer and the world's number three retailer, Tesco is square in the sights of numerous groups at home and internationally. Like the World's largest retailer Us-based Wal-Mart, Inc. Tesco PLC will increasingly be targeted even more frequently and aggressively by various interest groups as it continues to expand globally, as well as at home.

As a result, issues like union organizing of its U.S. Fresh & Easy grocery markets, animal welfare, labor conditions at its overseas factories and others will have to be addressed. For global mega-companies and retailers like Wal-Mart and Tesco, social, labor, environmental and related issues are no longer a mere doted line on the organization chart. Rather, these issues share space with growing the companies' number of stores, sales and profits, right on the CEO's job and mission statement.

The UK press also was a significant presence at Tesco PLC's 2008 AGM, covering it nearly as extensively as they tend to cover a U.S.-UK summit meeting between Britain's Prime Minister and America's President.

Below is a selection of some of the British Press' coverage of Friday's Tesco PLC AGM, which lasted about three -to- four hours at the UK National Motorcycle Museum in Birmingham on Friday afternoon, June 27.

>, Sunday, June 29, 2008: Are we falling out of love with Tesco?
It has been an unprecedented British success story with record profits and global expansion. So why is Tesco under increasing fire over the way it does business? Last week Barack Obama and Hugh Fearnley-Whittingstall were the latest to join the chorus of protest. David Smith and Zoe Wood asks why the store has become the focus for such fierce criticism

>, Saturday, June 28, 2008: River Cottage v Tesco - celebrity chef's chicken crusade hijacks investor meeting
· Fearnley-Whittingstall loses poultry welfare vote · Protests over turtles and treatment of US workers (includes video link.)

Chickens took over the National Motorcycle Museum in Birmingham yesterday as the Hugh Fearnley-Whittingstall circus pulled up at Tesco’s annual meeting for a showdown over poultry welfare.

>Hello Magazine UK, Saturday, June 28, 2008: Animal campaigners Jamie and Hugh to be honoured by RSPCA
Their food has won awards. Now celebrity chefs Jamie Oliver and Hugh Fearnley-Whittingstall are to receive another gong – this time from the RSPCA for their animal welfare work.

>The Sunday Times, Sunday 29, 2008: Hugh Fearnley-Whittingstall in farmyard fight with Tesco over chicken welfare: Hugh Fearnley-Whittingstall, the TV chef, wants chickens to have a decent life before becoming dinner – which led to a farmyard fight with Tesco last Friday. Here’s his diary of his war with the supermarket giant

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