issue 144

Boycott news from Ethical Consumer magazine issue 144 September/October 2013.



Amazon updates



UK book buyers favour Amazon boycott

An independent survey carried out by Censuswide on behalf of The Booksellers Association revealed that almost 60 percent of book buyers were less likely to buy books online following recent revelations about the tax avoidance schemes of internet-only ooksellers such as Amazon.

The survey also found that bookshops in Britain were still managing to withstand the competition from their web-based rivals. The survey showed that, of the 2,045 book buyers questioned, as much as 83 percent said they still shopped for books in book stores, with two thirds preferring to pick up a book before purchasing.

In addition, the majority of book buyers were concerned that there were fewer bookshops on Britain’s high streets than five years ago, with most believing that a book store made a high street more appealing.

A petition asking Amazon to pay their tax, organised by independent booksellers Frances and Keith Smith who run Kenilworth and Warwick bookshops, was debated in Parliament recently. When he opened the debate, Chris White MP paid tribute to the petition, saying he wanted the debate to take place not only because of the gravity of the issue but because of the 170,000 signatures gathered. He said it proved that: “Individuals can make a difference in politics … and we should encourage more citizens to take similar action.”

MPs discussed many issues, including the need for HM Revenues & Customs to be tougher on tax avoidance.



Germany and France bite back

German politicians are now calling for a change in tax law after it was revealed that Amazon made around €6.8bn in 2012 but only paid€3m in taxes in the country after reporting a profit of just €10 million. It uses the same tax avoidance scheme in Germany as in the UK, channelling its business through Amazon Europe Holding Technologies, based in low-tax Luxembourg.

Germany is Amazon’s second largest market (behind the US), and accounts for a third of its international sales. A quarter of all German online sales are made via Amazon.

Meanwhile, France’s culture minister, Aurelie Filippetti, has unveiled a number of measures to help small booksellers in the face of unfair competition from Amazon. This includes a €9m fighting fund to support struggling independent bookstores.

The minister also aims to introduce laws banning both Amazon’s free delivery of books and its large discounts. At the moment Amazon is circumventing France’s ban on booksellers discounting more than 5% from the price set by the publisher.



Amazon in the US

As if Amazon weren’t avoiding enough tax, they’ve managed to get themselves an official tax break
in Florida. In June the authorities in Hillsborough County agreed a plan that would give the online retailer nearly $1m a year in property tax breaks for a seven-year period should it choose to locate a new operation in South Hillsborough County.

Meanwhile Minnesota is the latest US state that want Amazon to collect sales taxes on transactions from consumers in the state. In retaliation Amazon has threatened to sever its connection with Minnesota “affiliates” (marketplace traders).

That, Amazon says, removes any “nexus” to Minnesota and thus frees it from collecting sales taxes. Amazon Marketplace traders in the UK may want to take note of the cavalier approach appears to take to small business using its platforms.


More international tax loopholes closing?


One of Amazon’s tax dodges could become a thing of the past if new rules suggested by international regulators come into force. The OECD ( Organisation for Economic Co-operation and Development), the international body that co-ordinates accountancy standards, has produced an action plan to crack down on egregious tax avoidance by multinationals. (See also
Richard Murphy’s article on the G8 announcements on tax avoidance.

The suggested reforms include a commitment to change ‘permanent establishment’ rules which at the moment allow companies such as Amazon to avoid Corporation Tax despite having a presence in the territories in which they trade. Under the new proposals, multinationals with warehouses will be taxed in the country where the facilities are located.

However this is only an initial report and it’s hoped that more concrete proposals will be tabled within the next 18 months – at which point nation states will need to ratify any changes. Unfortunately the US has so far refused to sign up to proposals, wary that reforms could damage the competitiveness of US companies.

The Tax Justice Network attacked the proposals for their piecemeal approach, commenting that, “[the plan] does not point to a new approach towards taxing transnational corporations, but aims at strengthening the existing rules. It therefore does not address the fundamental flaw in the current system, which attempts to tax multinationals as if they were separate entities operating independently in each country. Since in reality they are unified firms under central direction,
we consider that the only effective way to tax them is using a unitary approach...”


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Other boycott news



Four in 10 might join consumer boycott over tax avoidance.

A Guardian/ICM poll has found that 41% of consumers may boycott companies as a result of anger over the plethora of stories about tax avoidance by big companies.

21% of those questioned agreed that it was “very likely” they would refuse to use brands that have made headlines over their tax affairs, including Amazon, Starbucks and Google. Another 20% said it was “quite likely” they would support a boycott. A further 31% said it was “not very likely” they would stop using a company because of its tax stance and 24% said it was “not likely at all”.

It is the older part of the population that is more inclined to boycott companies over tax. Only 28% of the youngest voters, aged 18 to 24, say they would be likely to refuse to use taxavoiding brands. This rises to 38% of those aged 25-34, 41% of those aged 35-64, and 54% of the over-65s.



Gay bars boycott Stolichnaya vodka

A global boycott of Russian vodka – particularly Stolichnaya, the most iconic brand – was launched in July by North American gay activists to protest against Russian anti-gay legislation and a recent outbreak of violent attacks on the country’s gay citizens and advocates. The Russian Standard brand of vodka was also singled out.

A draconian new homophobic law criminalises any public expression of gay identity and any calls for gay human rights.

In response, Val Mendeleev, CEO of Stoli’s parent company SPI Group, issued an open letter to the LGBT community, citing the company’s position as a “fervent supporter and friend” of the gay community. Regardless, say boycott participants, the company is inextricably linked to the country.

Moreover, Jeremy Joseph co-founder and owner of the G-A-Y chain of bars and clubs, believes that boycotting Russian vodka may be just the beginning: “Hopefully, this would lead to not just Russian vodka being banned, but looking at the brands that will be sponsoring the Winter Olympics [who will know that] unless they make a stand, then their products will get banned.”

See Dan Savage’s blog which launched the boycott.



InterContinental Hotels boycott

Free Tibet and other international groups have launched a global boycott targeting the InterContinental Hotels Group (IHG), owner of Holiday Inn, over its plan to open a hotel in Lhasa, the capital of occupied Tibet.

Campaigners highlight the severe human rights abuses in Tibet and intense, ongoing protests against Chinese rule.

They are demanding IHG’s withdrawal from Tibet because the hotel’s presence will be a PR coup for the Chinese Government and will exacerbate the oppression and economic marginalisation of Tibetans.

IHG asserts that it is honouring its own CSR policies by undertaking “full consultation with the local community and government bodies”. However campaigners say that in Tibet, members of local communities face jail, torture and lengthy sentences for resisting government policy.

Eleanor Byrne-Rosengren, director of Free Tibet, says:“The presence of an upscale multinational brand such as Intercontinental gifts priceless PR to the Chinese regime responsible for gross human rights abuses throughout Tibet.

IHG’s marketing portrays Lhasa as a paradise and trades on images of an ancient Tibetan culture which in reality is being systematically destroyed by China,” she continued. “In a city in which people fear imprisonment and torture for speaking out against the regime, there can be no genuine implementation or objective evaluation of the company’s CSR policies.”

Join the boycott here