A Victory for Hershey is
a Victory for America
Our Buy American Mention of the Week!
by Roger Simmermaker
September 20, 2002
The power of consumer-led, grass-roots petitioning shined in
Hershey, Pennsylvania when the trust that controls the American candy
maker's fate voted 10-7 not to sell the company on September 17th. In
the days of mega-mergers that have only slowed their dizzying pace
because of a downshifting economy, this is fantastic news.
Even with the pressures placed upon the trust's board members
from citizens throughout Hershey, the State of Pennsylvania and beyond,
the Wall Street Journal still classified the decision not to sell the
company an "astonishing" announcement.
Besides Wm. Wrigley Jr. Co., which submitted the highest bid
and appeared to meet all the self-professed goals the trust was seeking
in a sale, bids were also submitted by Swiss-owned Nestle SA and
British-owned Cadbury Schweppes PLC.
Nestle, as it turns out, was fresh off an acquisition of
another U.S.-owned company - Chef America, Inc. Chef America is best
known for its popular line of Hot Pockets and other frozen foods. And
you thought that if a company had "America" or "American" in their name
that it was based in the United States?
Although a winning bid by Wrigley would have kept the company
American, opponents to the sale argued that any sale would have
ultimately had a negative impact on the community. Hershey Foods'
president and chief executive Richard H. Lenny consistently argued that
the company was of more value if left independent. Opposing this sale
was obviously more about American culture, tradition, and values, which
are three components that seem to get lost in mergers, acquisitions and
buyouts geared towards inflating the bottom line. The fact is that most
mergers fail to achieve their desired or anticipated results, much like
many of our trade deals with other countries.
Now that even proponents of the sale have admitted that a
Hershey sale is off the table indefinitely, the downside is (yes, there
are two sides to every story) that the stock price went down and the
company must now rely on the growth of their existing brand names. That
may be a tall order for a company that already has a 30% share of the
U.S. candy market, but being number one in the America is an asset, not
Consumers can ensure Hershey stays number one, and in fact
should reward their principled stance by buying their products. It may
seem like an easy decision in your easy chair reading about Hershey's
determination to stay independent in the newspaper, but there was a lot
of pressure involved. Going against the grain, not to mention a
competing bid from the world's largest food company - Nestle - was
surely no cakewalk. Patriotic citizens in Pennsylvania now need
patriotic action from across the nation.
I would not suggest you necessarily switch from another
American-owned candy maker for a Hershey Bar, but next time you get a
sweet tooth, make sure you don't reach for a Nestle Crunch. Swiss-owned
Nestle, even though they have only 12% of the U.S. chocolate market, is
a food giant that could use a little diversification.
So congratulations to all the folks in Hershey and the rest of
Pennsylvania that held to their principles in the face of corporate
pressures from literally all over the globe. For them, and for all of
America, this victory is especially "sweet."