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Who Owns Ikea?

by OLIVIER BAILLY, JEAN-MARC CAUDRON And DENIS LAMBERT

Ikea is not quoted on any stock exchange. There is no way of knowing who really owns the Ikea idea, and still less of obtaining a consolidated balance sheet or a breakdown of investments. It seems that the Stichting Ingka Foundation in the Netherlands owns the limited company Ingka Holding, which embraces all the Ikea companies.

Above all, there is Inter Ikea Systems, which owns the “Ikea concept” and is controlled by the Inter Ikea Foundation of Waterloo, Belgium. Inter Ikea Systems controls the brand name and focuses on making it a lasting success. It controls the image, names and standards that ensure there is almost no difference between an Ikea stores in China, the United States or Kuwait.

Who runs Inter Ikea Systems, with its ownership of the concept and franchise rights? Stellan Björk, a Swedish journalist who investigated it, said: “As far as we know Inter Ikea Systems belongs to several foundations and offshore companies, some of which are registered in the Caribbean” (1). So we know nothing, although the Kamprad family cannot be far away.

This opacity contrasts with the transparency flaunted by the company. During its campaign about Ikea, Oxfam-Magasins du Monde asked to be allowed to monitor five products jointly selected in consultation with the international management. A year later, despite many reminders, it had not received any answer. Ikea made a point of never putting anything in writing when dealing with the Belgian NGO.

Ikea’s supposedly “independent” audits are carried out by consultants who are not allowed to release their findings, less still comment on them.

In the framework agreement signed by Ikea and the International Federation of Building and Wood Workers (2) in May 1998, the union agreed to warn the firm before reporting any failure to comply with the Ikea code of conduct. In exchange the firm “will review the matter and propose appropriate measures” (3). Nothing slips out. In keeping with this rationale it proved impossible to find a single Ikea employee in Belgium prepared to answer our questions. They are not authorized to talk to the media. If mistakes are discovered, though, Ikea communicates a great deal. Each time it reacts in exactly the same way, acknowledging its mistake, playing down its importance and providing “solutions”.

Since the 1990s, in response to campaigns by environmental pressure groups worried about the use of timber, Ikea has developed links with the World Wildlife Fund and Greenpeace. When other groups accused Ikea of using child labor it launched partnerships with Unicef and Save the Children. Without prejudging the value of such projects, we have to make two observations.

Ikea’s social and environmental policy is merely a reaction to outside pressure. It is not based on any altruistic commitment, but is an attempt to protect its business interests. None of the partnerships offers any form of guarantee. None of the partner NGOs get to supervise production, nor do they visit the factories of suppliers.

The way in which Ikea handled the biggest media scandal involving its founder, Ingvar Kamprad, is revealing. In 1994 a Swedish newspaper exposed a friendship from 1941 to 1950 between Kamprad, then a young man, and a prominent figure from Sweden’s political extreme right of the era. Under attack, Kamprad acknowledged his errors, repudiated all racist and fascist ideas, shed a tear on Swedish television and sent a letter to his employees explaining that this friendship had been the stupidest act of his life.

In his official biography Kamprad openly accused his father of being anti-Semitic, and then concluded that he often wondered when he might be absolved of his “youthful sins”. He asked if it was a crime to have been raised by German grandparents. Kamprad used similar communication techniques to those of his company when he referred to something he did aged 24 as a “youthful sin” (4) and apologised profusely. By occupying any space opened up by critics, and putting a different spin on events, Ikea monopolizes all the versions of the stories in circulation.

The revelations about Kamprad’s past helped to boost the image of its founder that Ikea wants to promote: that he is sensitive, acknowledges his faults and has the common touch. Many stories followed to corroborate this folksy image: how he sold matches when he was five or how, despite being an ageing billionaire, he still compares the price of postcards. Ikea’s corporate communications team and Kamprad himself have built on the image to create an awesome figure, enforcing penny-pinching on the whole workforce. Such tales delight the media. Kamprad is on first-name terms with staff, drives an old junker, waits until the end of the market to buy vegetables at reduced prices and flies economy class just like everyone else.

True, not many ordinary people had two Porsches by the age of 30, own a 17-hectare vineyard or a 435 sq m mansion in Switzerland. Do we really believe he lives the life of a hermit? Despite the inconsistencies between fact and fiction much of the media still love the Ikea story.

A striking example was the interview Kamprad gave this March to the Pardonnez-moi program on Swiss-French television. The presenter aggressively questioned him at length about his stinginess (“You fly economy class? Staff must write on both sides of the paper? Did you really drive an old Volvo for years? You haggle over lettuces at the end of the market?”) and spoke openly about Kamprad’s past. The interview seemed courteous yet pointed. However, it was exclusively personal. Though they talked for almost 20 minutes there was no mention of Ikea’s environmental performance or the working conditions of 90,000 employees and the hundreds of thousands working for its subcontractors.

As usual Ikea had decided the agenda. By maintaining a trickle of self-criticism, occasionally revealing minor failings, Ikea is determined to monopolise debate, positive or negative. It hopes to pre-empt any publicity that might harm its sales.

Alexander Cockburn and Jeffrey St Clair write: This article, along with the piece on Ikea we published yesterday, first appeared in the excellent monthly Le Monde Diplomatique, whose English language edition can be found at mondediplo.com

This full text appears by agreement with Le Monde Diplomatique and CounterPunch will feature one or two articles from LMD every month.

Translated by Harry Forster

(1) Oliver Burkeman, “L’empire d’Almhult vous veut du bien’, in a feature “Ikea: la secte mondiale du kit”, Courrier International, n° 722, Paris, 2-8 September 2004.

(2) Now called Building and Wood Workers’ International.

(3) “Revised agreement between Ikea and the IFBWW”, December 2001.

(4) Bertil Torekull, Leading by design: the IKEA story, HarperBusiness, New York, 1999.

 

 

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