Psychopaths or Citizens? The battle for the soul of modern brands
Ogilvy & Mather
At the end of 2012, Starbucks, Google and Amazon were called before the House of Commons to explain their tax contributions over years of trading in the UK. They left the hearing amidst a public media firestorm.
Starbucks had notched up UK sales of 400 million in the previous year, but had reported a taxable profit only once in the 15 years of operating in the UK1. They attempted to navigate around it by offering to pay £20million, a fraction of what should have been paid in tax, over the next two years. A cynical spectator might suggest that this cost came out of their marketing budget.
The issue of tax avoidance is a murky one, but offers a topical illustration of the conundrum of brands as profit-maximising machines versus brands as contributors to the social good. It seemed to paint a picture of brands only valuing social good when it suits them to do so – if this particular example is broadly representative, then in situations where brands believe they can get away with it, they are quite happy to dispense with even basic tenets of the social contract like taxes, let alone wider social good, for the sake of maximising profits.