Companies in the United States that contemplate shipping their headquarters abroad to decrease tax loads also need to consider another type of departure, specifically the fleeing of their no longer loyal customers.
With Walgreens’ announcement to complete its partnership with Alliance Boots – and to create the Walgreens Boots Alliance 11,000-pharmacy chain – came confirmation that Walgreens would not “invert” its nationality and head to low-tax Switzerland. Had it done so, Walgreens’ geographic shift of headquarters would have effectively made it a Swiss company, thereby lowering its federal taxes.
Playing a role in Walgreens’ decision to remain in Illinois was the input of thousands of consumers. A press release issued by Walgreens stated: “The company was mindful of the ongoing public reaction to a potential inversion and Walgreens unique role as an iconic American consumer retail company with a major portion of its revenues derived from government-funded reimbursement programs.”
It’s no surprise, for economic reasons, that US corporations have often deemed the scenery to be far more vibrant across the pond. Groups like Americans for Tax Fairness (ATF) have been critical of such maneuvers. On 5 August 2014, ATF released the results of a poll on corporate inversions that found that more than two-thirds of likely voters disapprove of corporate inversions. Over the past several months, consumers protested the move at certain Walgreens stores. However, a more immediate, louder and persuasive protest was heard through social media.
“Change to Win [a coalition of labour unions] helped coordinate an outpouring of social media protest that was heard across the country and in Washington, DC,” says Nell Geiser, associate director of Change to Win Retail Initiatives. “Walgreens’ brand is a big part of their identity, and that’s why consumer backlash matters so much to them.”
Change to Win, which worked with a broad group of partners that were against the inversion, as well as with elected government officials to make this issue a topic of political reform, secured about 300,000 social media responses through various strategies.
The organisation created a “Walgreens gone wrong” Facebook page, on which people could leave comments. It also used several petitions which simply required adding one’s name to the list. For example, the heading of their online “Credo mobilize” petition was “Walgreens: stand with us & stay in America,” and was addressed to Gregory Wasson. Their US “Action” petition grabbed attention with “Walgreens, we need to talk”.
“The [prospect of an] inversion upset many people, and the tone of the petitions reflected that this issue was not one to be taken lightly,” says Geiser. In at least one instance, online petitions were delivered, by hand, to a Walgreens in Chicago.