Examination of Witnesses (Questions 180-193)
TESCO PLC
7 SEPTEMBER 2004
Q180 Sir Robert Smith: For a company
your size would you make use of them?
Ms Neville-Rolfe: You might occasionally,
particularly if you are moving into a new product area because
you might not know what you needed to do. So again it is this
ability to know, the expertise in knowing the regulatory regime
or how things are done, but we would mainly, once we had been
there a few years, build up regulatory expertise and then the
political advice on what is happening and how are things changing.
Particularly as you become bigger in a country you tend to have
a win/win with the government of the day because you want the
country to do well and the businesses to do well.
Q181 Sir Robert Smith: Do you have any
sense of comparison of the kind of advice and support you get
from UK compared with what your rivals are getting from their
own national authorities?
Ms Neville-Rolfe: I am not sure
our relations with our rivals are friendly enough to compare notes!
Q182 Sir Robert Smith: Are there any
markets where you have felt somebody has beaten you to the door
because maybe their country has been more proactive?
Ms Neville-Rolfe: I think it is
difficult to make comparisons. Other countries do back their companies.
We would like our country to back our company both in the markets
and indeed back at home because if you have got a secure home
base like Carrefour or Walmart have got, that is obviously extremely
helpful if you have got new challenges in your overseas markets
because the boards of companies only have so many hours of the
day to worry about things.
Q183 Linda Perham: I just wanted to take
up something that we have been given from your website about this
double gateway where in Thailand, Tesco Lotus facilitates both
the import of products to Thailand and the export of Thai manufactured
products to the UK. Is that usual practice with other companies?
Because it is highlighted on your website I wondered if it was
something you in particular do or whether other companies do that
as well.
Ms Neville-Rolfe: I would think
we are probably quite unusual in that we are buying supplies for
our UK and indeed our European businesses and potentially can
therefore help the home government in seeking to develop their
industries, so for instance a Malaysian party of ministers were
over recently and the Malaysian agriculture minister spent some
time with us and our suppliers trying to understand what they
might export here. I am not sure if I am answering your question
correctly however.
Q184 Linda Perham: I just wondered—because
it was something that you highlighted that you did—whether
it was something that was an initiative or something unusual that
other British companies did not do.
Ms Neville-Rolfe: I am not aware
of other British retailers doing it.
Q185 Linda Perham: It seems a very worthwhile
thing to do.
Ms Neville-Rolfe: Exactly.
Q186 Linda Perham: Because you are encouraging
the import of products to Thailand and the export of their goods
to this country.
Ms Neville-Rolfe: Exactly, it
is two-way trade. The theory of comparative advantage tells us
if you do it in the right way that can be highly beneficial. That
is one of the reasons that we try to do it.
Q187 Sir Robert Smith: You do not have
a feel then for when we will get our Scottish beef back into the
Thai market?
Ms Neville-Rolfe: I am afraid
the answer is I do not know.
Q188 Chairman: You mentioned Carrefour
and Walmart and you said they had the advantage of a strong home
base. Do you think that they have got an advantage over UK companies
because of their domestic dominance?
Ms Neville-Rolfe: Yes I think
it can be helpful because it means that you are in a position
of strength in the overseas market and all we would want is the
British Government similarly to support UK businesses in the same
way because if you have difficulties at home it makes it that
much more difficult to achieve successful enterprise and investment
overseas. That in a way has been part of the French culture I
think of trying to encourage exports from France and to back their
companies. Different cultures do it in a different way but that
seems to me to be important, that they back them at home and they
back them abroad.
Q189 Chairman: You have not been unduly
critical of the British presence. How do you think then that more
could be done?
Ms Neville-Rolfe: I think it is
difficult to know without knowing exactly the whole picture of
what they do do already. I have told you where I have found what
they have done has been very helpful to our business. If other
companies are in a similar position, the same ability to help
in a timely and focused way a) on the political side and b) on
the commercial side, if they could do more of that that would
be helpful. The things that we obviously have not taken advantage
of, and I do not know how valuable they are, are things like trade
missions which you know—
Q190 Chairman: Really what I was getting
at is here you are, you are saying that of course the French and
Americans seem to back their people more but when we ask you for
specific examples you are not really able to give us any.
Ms Neville-Rolfe: It was more
a point I was making about attitude and actually the British government
try in the same way. I was saying that that can be helpful. If
you are a big company trying to operate overseas it is helpful
to have support.
Q191 Chairman: How we got into this inquiry—and
maybe we should have started with that—is that we were lobbied
by the Singaporeans and Malaysians who were concerned about the
apparent disconnection between ASEAN and the EU and the fact that
ASEAN countries, where obviously there is quite a difference in
development and political development, are not quite as homogenous
as the EU used to be (it may no longer be, but as it was) and
as a consequence we have not really been able to establish a bilateral
trade agreement between the two blocs and they were talking about
bilateral agreements between individual countries and we were
wondering if you felt that formal agreements between, let's say,
Malaysia and Thailand and the UK on trade matters would facilitate
your activities and help them or do you not think it is relevant?
Ms Neville-Rolfe: I think this
is a complex issue but our immediate approach would be to
think improvements in multilateral trade would be the way to go,
which is Doha and all of that. I am not quite sure where that
has got to but in principle that seems right. That brings trade
barriers down across the world and is beneficial to all. Quite
apart from the complexities and time taken in trying to do lots
of bilateral agreements you can end up with some unfortunate tit-for-tat
and rules-based free trade is a good objective. Work by the Asians
to aspire to that seems to me to be a very good thing. I suspect
that it is going to take time to achieve that. It is a bit like
the EU 30 or 40 years ago when it set out with an aspiration and
then over time the trade barriers have come down. On the whole
I think that has been highly beneficial.
Q192 Chairman: I think the problem is
that what we have seen, if I can put it this way, is a variability
in the level of economic activity and political liberalism between
particular countries. This group in ASEAN, lumped together as
it is, is quite heterogeneous and then you have the more developed
countries which are somewhat impatient and want to establish the
bilaterals. I would think that probably our attitude was summed
up quite well by your own but in the absence of the long-term
solution being available in the short term should the best be
the enemy of the good or is it worth our while hanging out and
holding on to try and get the best possible multilateral deal?
Ms Neville-Rolfe: I think my position
now would be particularly with perhaps better prospects for the
WTO next stage—we have got the Presidency—that there
are some quite good possibilities it seems to me in the next 18
months around that which maybe would lead to progress on the multilateral
side. For me that would be the best. I think if the ASEAN economies
begin to grow, even the ones that we are not in (which you can
understand why we are not in because they have got much much lower
disposable incomes and they are less developed politically) if
they come forward there is no particular reason why some sort
of ASEAN grouping longer term should not start to make some slow
steps towards improving things and the thing to do is to try and
choose areas where they can act together in concert and have some
successes rather than get too frustrated on the things that are
really difficult. I do not know which the difficult areas are
and which the easier areas are. You would need to talk to the
WTO-type experts on that.
Q193 Chairman: We do. Can I say thank
you very much, that has been very helpful. I think we have covered
all the ground.
Ms Neville-Rolfe: I had one final
thought which was to answer your question in a sense as to what
could Britain do better. I think celebrate success might be quite
a good thing because there are some great successes—the
way Dyson's exports have developed in Malaysia and our own success.
If one got a bit more awareness of that that can actually be helpful.
The British are not always terribly good at that and a bit more
of that would be good.
Chairman: I suspect that a number of
people would be very surprised to know what we have in Malaysia
and in Thailand and probably would turn round to you and say,
"We would not want to export there because it is too difficult
and nobody does it anyway," and the fact is that folk like
you have rolled up your sleeves and are getting on with things.
Thank you very much.
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