The Impact of Multinational Investment on Alcohol Consumption Since The

The Impact of Multinational Investment on Alcohol ConsumptionSince the 1960s

Teresada Silva LopesI

Departmentof Economics, TheUniversity of Reading UniversidadeCatdlica Portuguesa

Though much has been written about the alcohol beveragesindustry, lit- tle hasbeen said about its internationalisation.This articleattempts to analyse the impact of multinational enterprises(hereafter MNEs) on the availability and consumptionof alcohol in the world economyin the context of the evolution of the alcoholicbeverages industry since the beginningof the 1960s.2 It also givesspecial emphasis to the resourcesof the firm, and to the issuesof internationalrelated diversification and branding.For that purpose,it drawson businesshistory literature[Chandler, 1990;Jones and Morgan, 1994;Jones, 1996] and internationalbusiness theory. The studyis basedon the evolutionof the largestfive MNEs in the world in 1997,in terms of salesvolume - Allied Domecq, Bacardi-Martini,Diageo, Moat-HennessyLouis Vuitton and Seagram.These account for an increasingly large shareof the world trade in alcoholicbeverages. Because the aim of this article is to find a pattern of growth basedon comparativeanalysis of suc- cessfulfirms, rather than causalityrelations between growth and its determi- nants,the sampledoes not includeany 'control' firms, to which the behaviour of the successfulMNEs of alcoholicbeverages can be compared.It drawson evidencefrom the businessarchives of the MNEs, annualreports, interviews with top managers,other specialistsin the industry,and secondarydata. Existingstatistics on consumption,trade and number of firms in the alcoholic beveragesindustry are not very robust,but the patternof an increasingly concentratedindustry since the 1960sis significant.For example,in 1996a publishedlist of the drinks companieswith internationalactivity showeda total of 2061 firms in the industry?In this period the big five MNEs account-

• Thisarticle has been substantially improved because of the commentsof GeoffreyJones and Paul Duguid.Michael Jackaman, James Espey, Tony Froget, Phil Taylor, George Sandeman and David Orr were extremelyhelpful in givingme their commentson the industryand on accessto information.Salvador Guedes,Paul Smith, Vicky Nobles, Michael Hallows, Brigitte Dreville, Gillian Bouzy, and Sue Phillips were helpfulin providingaccess to the internalrecords of the MNEsin whichthey work for. Mrs. Bellamy from CompaniesHouse greatly assisted my researchon the British-basedalcoholic beverages firms. • The category"alcoholic beverages" includes - wine,spirits and beer [World Drink l?ends, 1998, p.8; Cavanaghand Clairmonte,1985, p.21]. • ImpactWorld Directory [1996]. BUSINESS./tNDECONOMIC HISTORY, Volume Twenty-eight, no. 2, Winter 1999. Copyright¸ 1999by the BusinessHistory Conference. ISSN 0894-6825 110/ TERESADA SILVALOPES ed for around one-fifth percentof world trade in volume, in a market where the number of equivalentfirms usingthe Herfindahl index is 70.4 Businesshistory literature,following Chandler [1990], has until recently been largelyfocused on managerialindustrial enterprises. Theories of MNE have also had as their empiricalbackground such enterprises,stressing issues related to technologicalinnovation as the core explanationsin the under- standingof their evolution [Dunning, 1981]. Studies of industrieswhere brandsand distributionservices are a crucialpart of the valueadded by MNEs are still very scarce?For that reason,the caseof the MNEs in alcoholicbev- eragesgains particular relevance,since it illustrateshow important interna- tionalisationstrategies and brandinghave been in determiningthe processof growth of the MNE.

The Period of Analysis, 1961-1997 The last four decadesof the twentieth century sawboth rising incomes,at least in the industrialisedworld, and the creation, or re-creation,of a global economy[Jones, 1996; Pollard, 1997]. Total consumptionof alcoholicbeverages,like all other consumergoods, increased, rising from 6,215 million litres in 1961 to 15,056 million litres in 1997, at an averagegrowth rate of three per- cent per year.However, in per-capitaterms, there has been a generaldecrease in consumptionof alcoholic beverages.6 The fast growth rate in alcohol consumptionduring the 1960sand 1970s was mainly related to increasingincomes in Western countries,to changing lifestylesand consumertastes. The stagnationand decreaseof per-capitacon- sumptionin 1980sand 1990s,on the other hand, reflectedthe maturingof marketsin industrialisedcountries, as well as the economic and social crisisin the former SovietUnion. In Westerncountries, the decreasewas due to changes in the legislationon drinking and driving,to fiscalpolicies established by gov- ernments(set to restrictdrinking), and to the higherlevels of educationby consumers(who becamemore concernedwith qualitywines, health, and other side effectsrelated to addictionand health). In the former Soviet Union the high declinein consumptionof alcohol, at least accordingto official figures,was relatedto the political and economicinstability.

4 Estimatesbased on the companiesannual reports, International lgqne and SpiritRecord 1997 and ImpactInternational 13(16). UnfortunateIy, there exist no officialestimates on the sizeof themarket in sales value.The MNEs market sharein volume,as welI as the Herfindahl Index, can understatethe extentof powerof theseleading MNEs in the industry[The Economis• 2 May 1998;Fortune, 31 May 1982]. sHowever, Wilkins [1970, 1974] is noteworthyfor includingdistribution and servicesin her general surveyof US multinationals.See also Tedlow and Jones (1993) and Jones and Morgan (1994). 6 Averagegrowth rate estimated using per-capita consumption by country-lr/orldDrink •ends,1998; and populationby country-DemographicYearbook (United Nations, 1998)-estimates of mid-yearpopula- tion. THE IMPACTOF MULTINATIONALINVESTMENT ON ALCOHOLCONSUMPTION / 111

In this period, the MNEs in alcoholic beveragesintensified their invest- mentsabroad, increasing the availabilityand diversityof brandeddrinks in the emergingmarkets of Latin America,Asia and EasternEurope, where formerly the alcohol consumedwas largely of locally produced beverages,frequently home made and home consumed.That is why, in many of thesemarkets, sta- tisticson consumptionand production,only start to be reliableand systema- tised after MNEs investedlocally. Although largecountries such as the United Statesand Japan figure among the largestabsolute consumers of alcohol, the biggestmarkets in per-capita terms are found in a clusterof WesternEuropean countries. It is in theselat- ter countries that there has been the most marked decline in absolute consumptionsince the 1980s. Apart from the dispersionof alcohol drinking around the world sincethe 1960s,there has alsobeen a trend towardsthe consumptionof a similarmix of alcoholicbeverages (wine, beer and spirits)by differentcountries [Spawton, 1990].In Northern Europe,where markets traditionally consumed beer, there has been an increasein wine consumption.The UK, where consumptionof beer is still around six times more important in volume than wine, is a good exampleof a fast growingmarket in terms of wine consumption.In Southern Europe,where the most important wine producersare located,while wine still accountsfor the majority of alcohol consumption,beer consumptionis grow- ing fast. France,Italy and Portugalare good examplesof this pattern of consumption,confirming the trend towardsglobalisation of the alcoholicbever- agesindustry.

Multinational Enterprise in Alcoholic Beverages The period sincethe 1960sis one of fast growth in foreigndirect investment [Dunning 1993,p.15]. Many industriesbecame increasingly concentrated in a handful of giant corporations,with oligopolisticpower, and startedcon- fronting each other in different markets[Hymer, 1968]. The alcoholicbever- agesindustry exemplifies such a pattern of concentration,with MNEs inte- gratingvertically and horizontally,combining production of differenttypes of drinks with trade and distribution. The type of diversificationstrategy followed by eachMNE varied,depend- ing on the specificmarket opportunities,on the corporateresources available and on the type of products produced and traded. Penrosehighlights the importanceof the creativeand dynamic interactionbetween the firms internal resourcesand its market opportunities,in the processof growth of the firm [Penrose,1995(1957)]. This sectiongives a brief highlight of the direction of expansionof the MNEs of alcoholic beveragesselected in this study.Table 1 includesa summary of their businessactivities by decade,and their dates of foundationand country of origin. The history of internationalbusiness in this industry is complex. Even the date of foundationof the MNEs, as well as their country of origin, can be dif- 112/ TERESADA SILVALOPES ficult to determine,since they all resultfrom a seriesof mergersand acquisitions.For the purposeof this work, the date of foundationand country of origin consideredfor each MNE will be the one that refersto the corporation that had the most active role in its processof growth. For example,Allied- Domecq is the resultof severalacquisitions and mergers.Although it may seem a young firm (havingbeen formed in 1961),it wasthe outcomeof the merger of three regionalbreweries founded in the eighteenthand nineteenthcentury. 7 All the MNEs owe their initial growth to consumptionfrom developed countries,which for the majority of the cases,coincide with the country of origin. Bacardi seemsto be the exception,since it was originally set up in Cuba but grew through salesin the United States.However, its real process of growth and international expansiononly startedwhen the Bacardi family was expelledfrom Cuba in 1960 (followingthe Cuban revolution),and had to set up its operationsabroad. The caseof Seagramis similar in the sense that its growth resultsfrom salesin the US market, though the companywas originallyfrom Canada. The MNEs in the alcoholic beveragesindustry differ from many other industriesin two significantways. First, in contrastto so many other industries,MNEs originatingfrom US do not have a leadingposition among the big multinational investorsof this industry?One possibleexplanation can be that, althoughthe US is an important market due to its size,it has never rankedamong the top ten consumers of alcohol in per-capita terms. Another explanation can be related to Chandler'sview about the developmentof strong branded, packagedfood industriesin the UK [Chandler, 1990]. While American firms developedby exploitingeconomies of scaleand scopein production,international marketing and distribution networks,the British firms made their mark in branded, packagedproducts which demandedfewer managerialskills in terms of the complexity of production and offered less opportunity for securingscale economies[Church, 1990]. Second,their patternsof ownershipare distinct.Despite Chandler's argument that family ownershipor more precisely'personal capitalism' unduly restrictedthe growth of firms (and thus contributed to British relative economic decline),this industryhas remainedpredominantly owned by family businesses[Chandler, 1990, pp. 236-94].Out of the five MNEs selectedfor this article,only Diageo and Allied Domecq, the two British basedMNEs, are no longer family controlled,though their predecessorfirms had a strongfamily influence until the early 1980s.9In this industry,family membersare an impor-

7 Ind CoopeLimited (Essex) founded in 1799;Tetley Walker (Leeds) founded in 1822,and Ansells BreweryLimited (Birmingham and Midlands) founded in 1881lind CoopeTetley Ansell Limited -Annual Reporte.4ccounts, 1961; Tombtell and Tweedle, 1998]. 8 Thereare howevertwo MNEs originatingfrom the US - BrownForman and Jim Beam,which rankedamong the leadingalcoholic beverages firms worldwide in the endof the 1990sbut did not figure amongthe big five MNEs in thisindustry. ' Forthe decliningimportance of familyfirms in Britainsince the 1950sand 1960s, see Rose (1998). THE IMPACTOF MULTINATIONALINVESTMENT ON ALCOHOL CONSUMPTION/ 113 tant factorsupporting the companybrand image, given they arethe livingicon of their brand names,and successin this industry is strictly linked with tradi- tion and heritage)øThis entrepreneurial nature of the businessis alsoan assur- ance to the customerthat quality standardshave been met, productionexpe- riencehas been accumulatedand traditionalmethods of productionkept. Table 1 showsthat eachMNE expandedin differentways since the 1960s. Most of the MNEs diversifiedinto unrelatedactivities during the 1960s and 1970s.More recently,the trend has been for them to abandonthose business activities which are not related to their core businesses.Guinness, one of the MNEs that mergedto form Diageo in 1996,started to transformitself from a conglomerateinto a sharplyfocused international drinks companyin the 1980s.Since then, it has concentratedon producing,distributing and marketing branded spirits and beer worldwide,overseen by United Distillers and GuinnessBrewing •0(7orldwide, respectively. Its subsequentacquisitions were designedto strengthenits positionwithin the alcoholicbeverages industry. The demergerby Allied Domecq of its leisureand retailingactivities in 1999 (which accountedfor around one fourth of its salesvalue), also illustratesthe contin- uing pressureMNEs are facingto concentrateon their core businesses. Some MNEs only diversifiedhorizontally into different typesof beverages and vertically in the production and distribution of alcoholic beverages. Bacardiis an exampleof a MNE that only diversifiedwithin the alcoholbusi- ness.It was sinceits foundation a "dominant product firm", relyingon a sin- gle brand - Bacardi.Its diversificationstrategies from the 1960swere mainly into production and distribution of rum in different countries. It was only recently, with the acquisition of Martini-Rossi in 1993, and Dewar's and Bombayin 1998,that it has startedto diversifyhorizontally by broadeningthe scopeof its portfolio of alcoholicbeverages. The growth of MoEt-HennessyLouis Vuitton (hereafterMoEt-Hennessy) distinguishesit from the other MNEs in the sample.It has taken an ethno- centricapproach to mergersand acquisitions.The country of origin (France) was the key determinantin its processof growth and expansion.It mainly acquiredand mergedwith companies,such as Louis-Vuittona producerand distributorof luggageand leather goods, whose businesses were associated with luxury,fashion and high qualityproducts. These mergers and acquisitionshave mainly beenmade with other Frenchcompanies.

•0For an analysisof the importanceof familynetworks in the evolutionof the alcoholicbeverages industry,see Duguid and Lave(1996).

116 / TERESADA SILVALOPES

International Related Diversification n

As sometheories of the MNE would predict,internationally related diversificationby MNEs in the alcoholicbeverages industry was not a continuous processbut insteadevolved incrementally [Johanson and Vahlne, 1977].In a first stage,firms exportindirectly, only respondingto customer'sorders. Then, as the frequencyof transactionsincreases, firms hire independentdistributors or agentsto trade their products in foreign markets.Although salesbecome recurrent,firms still keep a low level of control and risk in foreignmarkets. As foreign marketsbecome more important for the company in terms of their overall activity,it becomeseconomically advantageous for the firm to inter- nalisedistribution. The last stageof internationalisationis achievedwhen the firm becomesmore involvedin termsof controland risk,by settingup a production unit abroad.Internalisation theory providesan explanationof shifts from one mode of entry in foreignmarkets to the other [Buckleyand Casson, 1976]. The variantsof thesepatterns of internationalisationinvolve licensing technologyto local producers,or franchisingof product or trade name, dependingon the productor servicerendered. In the alcoholicbeverages industry MNEs cannot alwaysadvance into the last stageof internationalisationby settingup a productionunit in a foreign market.For someproducts, where asset specificity relating to the type of land and climate is high, exports(whether or not these occur through a wholly owneddistribution channel) are the only feasiblemode of entry.For example, it is possibleto setup productionunits of gin and rum in foreignmarkets, but the same does not apply for whisky,champagne, cognac or port wine. This land specificity factor has always impacted on the stage of international involvementof firms operatingin the alcoholicbeverages industry. •2 For example, Bacardistarted to set up rum productionunits abroadsince the beginning of the twentieth century,having severalunits dispersedaround the world in presenttimes. For firms for which production dependedon land specific assets,exports were normally the main form of approachingforeign markets. Mo•t & Chandon and Hennessy,which werehistorically two separatecompa- niesby the time of their mergerin 1971and producedFrench champagne and cognacrespectively, had a high internationalinvolvement but only through exports (directly to customersor through intermediaries)?However, some companiessuch as Seagram,despite trading on whisky,which is land specific, werealready highly internationalisedto Canada,the US and Scotland.Having made its first investmentabroad in the 1930s,with the acquisitionof a Scotch

II The relateddiversification strategies analysed in this articlerefer to productionof alcoholicbever- agesand its distribution.For an analysisof the importanceand advantagesof unrelateddiversification of the selectedMNEs, see Jones and Lopes (forthcoming). 12See Jones and Bostock (1996, p. 225)and Weir (1995). •3In 1971/1972Moat & Chandonsold a total of 17.2million bottles, 49 percentcorresponding to exports,and Hennessy sold 16.2 million bottles, being around 93 perecntexported. [Moat-Hennessy annual reports,1971/1972]. THE IMPACTOF MULTINATIONALINVESTMENT ON ALCOHOL CONSUMPTION/ 117 whisky company (Robert Brown Limited, in 1935), shortly after World War II Seagramintensified its effortsto developbusiness overseas. Seagram also set up wholly owned distribution channelsin marketsconsidered strategically important in thosedays. It wasthis foreigndirect investment (hereafter FDI) and the use of independentdistributors in other markets,that allowedSeagram to be presentin more than one hundredcountries, and to becomethe largestselling brand of export whisky in the world, in the beginningof the 1960s.TM During the 1960s,exports were mainly directedto the emergingmarkets and to neighbourhooddeveloped countries. Apart from being distributed throughindependent distributors, which werefamily ownedand had a local or regionalscope in their activity,alcoholic beverages were also sold through trading companies,especially in many emergingmarkets. In the 1970s,with the changesin consumertastes and lifestylesin the developedworld, it becamepossible for companiesto advancefurther in their processof internationalisation.Apart from someopportunistic acquisitions in productionof beveragesand in other unrelatedfields which werethen thought to be the best way to consolidatecorporate growth, augment cashflows and immunisethe corporationfrom the cyclicalbuffetings of a singleproduct line [Chandler,1990, p.62], firms startedto integratevertically into distribution,by settingup their own distributionchannels in developedmarkets. This form of FDI wasattained essentially through the acquisitionof former independentdistributors, which were startingto face difficultiesin marketinghigh volumes and remainingcompetitive [Chandler, 1990,p.30]. During this period, emerg- ing marketsstill accountedfor a smallpercentage of total foreigndirect investment given the low levelsof demand in thesemarkets. The emergingmarkets only becameimportant in terms of foreign direct investment from the 1980s onwards, when demand in the OECD countries startedto stagnate.By compensatingdiminishing levels of alcohol consumption in Westerncountries, MNEs strategiesof FDI alsoled to the dispersionin consumptionof alcoholicbeverages worldwide. Like what happenedin many other industriesduring this period,MNEs chosejoint venturesand other types of alliancesas the mode of entry into emergingmarkets. These constituted good alternativesto foreigndirect investment, especially in thosemarkets where barriers to FDI existed. These markets included India, where MNEs needed alwaysto havea local partnerin orderto investin the market,and Japan, where the distributionsystem was so bureaucraticthat wasvery hard for foreigncom- paniesto investon their own. The definitive decline of alcoholic beveragesconsumption, and the increasein assetspecificity (especially due to brands)in the 1990s,led to fur- ther mergersand acquisitions,and consequentlyto an evenhigher concentrated industryfrom then on [Lopes,1998]. Joint venturesand other kinds of hybridgovernance structures became the majorform of marketentry, not only

Annualreport, Seagram 1961. 118/ TERESADA SILVALOPES into emergingmarkets, but alsoin small marketsin the Westernworld. MNEs createdalliances with local partners(especially in emergingmarkets), or with competitors,as suchalliances provided the scaleand scopein marketswhere it would otherwise have been cost inefficient to have full control of distribution activities.Balasubramanyam and Salisuconsider that the prestigethe joint venture confersto both partners,and the preventionof entry by new firms, are also important reasonsfor the spreadof alliancesin the alcoholicbeverages industry [Balasubramanyamand Salisu,1994, p.70]. The sevenjoint venture companiesformed in 1995between Mo•t-Hennessy and United Distillers(sub- sequentlyintegrated in Diageo)covered several markets in Asia.The aim was to bring togethertheir expertisein distribution,allowing the attainmentof economiesof scaleand scopein distributionwith products,which could be considered distant substitutes. With this generaltrend towardsvertical defragmentation,management of relationsrather than control, becameone of the key issuesin international managementof the alcoholic beveragesbusiness. This evolution shows that existingtheories of the MNE are not sufficientto explaininternationalisation in the alcoholic beveragesindustry. The theoretical argument that MNEs emergeinevitably as a resultof the internalisationof transactionsin interme- diateproduct markets,seems to be specificto a particularperiod of time. In fact, not only havealternative governance mechanisms such as networks always been important in internationalbusiness [Powell, 1990], but over the last decadethey havesteadily replaced integrated corporations.

Branding in International Business The enormouspower of brandsto differentiateand add valueto products or servicesmakes them one of the principalassets of successfulcompanies operatingdomestically and internationally[Jones, 1994]. However, brands have been neglectedin the past both by mainstreameconomists and businesshistorians[Corley, 1994].Despite that, a significantliterature has accumulated. Chamberlainand Bainwere pioneers in studyingthe economicimpact of product differentiationin the strategyof firms and in preventingentry; Comanor and Wilson recognisedthe importanceof productdifferentiation in consumer goodsindustries [Chamberlain, 1933; Bain, 1956;Comanor and Wilson, 1967]. Wilkins studied the evolution of brands in food and drink, and concluded that they help both the consumerand the producer,by reducingsearch costs for the former,and by increasingefficiency in productionand making possible the existenceof moderndistribution systems for the latter[Wilkins, 1994]? Casson disagreedwith this view, and consideredthat the major role of brandingwas

15For an analysisof othercontemporary research on the importanceof brandsin businesshistory andeconomics see the booksedited by Tedlowand Jones (1993); Jones and Morgan (1994); Carter, Casson and Suneja(1998). THE IMPACTOF MULTINATIONALINVESTMENT ON ALCOHOL CONSUMPTION/ 119 to imbueproducts with culturalcharacteristics which areincreasingly linked to major lifestyleoptions [Gasson, 1994, p.56]. The alcoholicbeverages industry is a good illustrationof the importance of brandsover time. The recenttrends in the marketsand in the industryhave led firms to rationalisebrands, globalise the onesremaining in the portfolio, and to invest lessin product and brand innovation,by creatingalternatively line extensions.The disposalby Diageo of eight Canadianwhisky distilleries, four US bourbon companies,and some other drinks operationsin North Americain 1999highlights the increasingimportance of suchstrategies in this industry. Rationalisationof brandsplaces major emphasison strongbrands which hold internationalreputations for qualityand prestige.For mostof the MNEs in alcoholicbeverages, their top brandswere launchedin the eighteenthand nineteenth centuries,at the beginningof the activity of the original firms. Theseolder brandshave product differentiation advantages over new ones,of provenanceand heritage,related to beingearly entrants. These advantages have nothing to do with advertisingor consumerirrationality, but originatefrom the fact that the first brand performedsatisfactorily, becoming the standard againstwhich subsequententrants were rationallyjudged [Schamlensee, 1982; Urban et al, 1984]. However,these first-mover advantages depend on the con- tinual upgradingof productsas well as of the brandidentity, with the support of effectivedistribution and other network arrangements.Gordon's, the most importantbrand of gin ownedby Diageo,which ranked among the world'stop spiritsbrands consumed worldwide in the end of the 1990s,was launchedin 1769in London,when the firm Gordon & Companywas established. The main reasons behind rationalisation of brands are related to cost effi- ciencies,since maintaining small brands involves high productioncosts as well as stockingand marketing.Although ideally rationalisationof brandswould lead to the strengththingof existingbrands, which becomeglobal, it is not what hasbeen happening in reality.On the one hand, abandoningbrands has meant lost salesthat haven'tbeen compensated for by increasedconsumption of other brandsin the portfolio of the MNE. On the other hand, the creation of real globalbrands is a fallacy,since historical evidence shows that evenfor those brands which are available around the world, and for that reason are definedas global,their salesare actuallyaccounted for in a very smallnumber of markets.For example,in 1997,90 percentof the salesof "BacardiWhite" was generatedin elevencountries, whereas the total number of marketswhere it was availablewas eighty-three.•6 Brandinnovation is anotherkey issuein internationalbrand management [Espey,1985]. Among the top spiritsbrands in the end of the 1990s,only three - Baileys Irish Cream, Malibu, and Absolut Vodka were launched since the 1970s.The historicallow successrates attainedwith new launches,the high

'• "R. Drive Domestic Database,"Drinks International 1998. 120/ TERESADA SILVALOPES investmentcosts they required,and the increasinglyconcern of firms in achiev- ing short-termresults have stronglyinfluenced this evolution.Line extensions, which are new productsthat mix an existingspirit with another beverageand keep the name of the mother brand (generallya long establishedbrand), are alternativelyan easierand lesscostly way of innovatingin the alcoholicbever- agesindustry. Some examples are the brand extensionsintroduced by Bacardi during the 1980s,including Bacardil?opical Fruit Mixers and BacardiBreezer. Theseline extensionsresulted from the recognitionby Bacardithat many cus- tomersloved fruit drinks,but did not wish to go to all the trouble of mixing them. Apart from coveringspecific market segments needs, line extensionscon- tribute to keepingthe mother brand namein front of the consumers(especially in those marketswhere there exist barriersto marketingbeverages with a high level of alcohol),and also help to invite young drinkersto switchto spirits. Brandextensions also help creatingtrade, especially in maturemarkets; though they normally correspondto a small percentageof the MNEs total sales.The key successfactor of such brand extensionsis their capacityto fit with the propositionand personalityof the mother brand.

Concluding Remarks This article has examinedhow multinationalinvestment has impactedon alcohol consumptionsince the 1960s. MNEs have dispersedconsumption aroundthe world, by spreadingbranded lifestyles, and by homogenisingtastes betweencountries in terms of the amount of wine, spiritsand beer consumed per-capita. A numberof pointsdeserve emphasis. Firstly, multinational investment has not been spreadevenly around the world. It was only after consumptionin Westernmarkets started to stagnatethat MNEs dispersedtheir investmentsinto emergingmarkets. Secondly, the patternof multinationalinvestment has been product-dependent.For thosebeverages for which productiondoes not require locationspecific resources, it hasbeen possible to acquireor createproduction units in foreignmarkets; otherwise, exports through wholly owned distribution channels have been the most advanced form of foreign direct investment. Thirdly, this is one of the few global industrieswhich doesnot have US MNEs among the largest international firms. Fourthly, in contrast with the ChandlerJanview of the superiorityof managerialenterprise, most of them are family controlled.Fifthly, existingtheories of the MNE about the rise of big businesshave heavily emphasised the importanceof technologicalinnovation. Alcoholicbeverages provide an exampleof an extremelylarge and important world industrywhere it is the managementof brandsand distributionthat have been the key sourcesof competitiveadvantage. Sixthly, this industryprovides a vivid illustrationof the tendencyseen in many industriessince the 1980sfor hierarchicalgovernance structures to be replacedby joint ventures,strategic alliancesand other non-equitymodes. In the past, theoriesof internalisation havetended to suggesta certaininevitability in the processfrom exportsto full THE IMPACTOF MULTINATIONALINVESTMENT ON ALCOHOL CONSUMPTION/ 121 ownership.To confront the new reality in international businessstrategies, both businesstheorists and businesshistorians will needsome more persuasive explanations.

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