IN one sense the collapse of New Age Beverages (NAB) is an everyday tale from the world of business – a story of straightforward mismanagement. The company expanded too fast, too soon, making fundamental strategic mistakes along the way, the biggest in distribution. Losses mounted, market share shrank and the shareholders baulked at throwing good money after bad. In the absence of a white knight, the provisional liquidation will go ahead and the PepsiCo venture will be consigned to the voluminous dustbin of capitalism’s failures.
But the story has another, more tragic aspect to it – as South Africa’s first black economic empowerment project, launched in 1994 with the backing of some of America’s great and good to the accompaniment of a great deal of fanfare and optimism. Leading figures from the African-American community in the United States gave financial backing to the project, as did two local unions via their investment arms – the National Union of Mineworkers and the Southern African Clothing and Textile Workers Union.
Calculating the total financial loss incurred by NAB’s shareholders will be relatively easy; the blow to the black empowerment cause is more difficult to quantify, but it will be considerable.
It is a noble cause that is also being damaged badly by the drama still being played out over the Mpumalanga housing scandal. Although the full story has still to emerge, an outline is beginning to emerge of cynical exploitation of black economic empowerment for the sake of personal enrichment.
There may be some who will see these episodes as supporting their racial prejudices and ammunition with which to undermine the principle of racial economic justice.
The involvement of whites in the Mpumalanga scandal makes the point that greed is no respecter of pigmentation, while NAB merely demands recognition of a need for hard- nosed realism when competing in the market place.
The reminder offered by these two sorry tales is that when the flag of black economic empowerment is raised, there is more at stake than the interests of individuals. Neither episode should stop us from seeking ways of distributing the wealth of this nation, which is still largely in white hands, among all South Africans.