Five Things I Have Learned This Week #10

1–1209 North Orange Street, in the rather lovely-sounding neighbourhood of Brandywine in Wilmington, Delaware, is the registered head office of the Apple Corporation. This isn’t perhaps that interesting, until you realise it’s also the registered head office of Coca-Cola. And Walmart. And Alphabet. And General Motors, Verizon, American Airlines, Yum! Brands, two thousand Deutsche Bank subsidiaries and around 300,000 other companies. It houses the Corporation Trust Centre, a company offering “registered agent” services to corporations who need a Delaware address for their HQ.

The majority of US corporations are headquartered in Delaware (including 68% of Fortune 500 companies) for two reasons. Firstly, there is zero state corporate income tax. (California, as a comparison, charges 8.84% of net income.) There is also an infamous loophole allowing companies to transfer profits into Delaware from out of state via payments for intellectual property. And secondly, Delaware’s corporate case law is extremely well defined and there is a specific court (the Chancery) which exclusively deals with corporate law and promises astonishingly rapid turnaround on cases. The average civil case in the US can take 2–3 years to resolve, in Delaware, judgements can be as fast as four days.

Delaware’s pre-eminence in US corporation tax is the result of a 19th Century race to the bottom in state tax rates. By 1899, when Delaware’s 0% rate was instituted, most states were down near the bottom. New Jersey, the early leader, blinked first. In 1913, its outgoing Governor (Woodrow Wilson — moving to the White House) accused the state’s corporate law of encouraging monopolies, then the most feared of all corporate creations. The state reformed its legal code almost overnight, leaving Delaware as the incorporation state of choice for America’s burgeoning mega-corporations then spreading out of their home states and across the country.

In a rebuke to the world’s corporation tax race to the bottom (current front runner — Republic of Ireland, 12.5%) President Joe Biden recently upped his aspirations for US rates, simultaneously suggesting a global floor of 12.5%. Which is ironic as he spent 36 years as a senator for Delaware.

2 — Pity the trade negotiators of the world. The EU has recently awarded protected status to Halloumi/Hellim, the squeaky cheese often spotted as the vegetarian option in gastropubs. The differing spellings reflect the southern (Greek) variety and the northern (Turkish) version. North Cyprus has been cut off from international trade ever since the controversial Turkish invasion of 1974, but this cheese-based diplomacy also comes with an agreement allowing Northern Cypriots to export their cheese to the EU via Cyprus.

Which would be fantastic, if only Europeans had any interest in the stuff. Of the 33,000 tonnes exported to the EU in 2019, 53% went to the UK. “I am not aware of the Germans or the French or the Spanish deciding to eat hellim,” grumbled Tahsin Ertugruloglu, North Cyprus’s foreign minister.

3 — Food labelling is a nightmare. Smoked Scottish Salmon, is salmon from Scotland, which is then smoked anywhere in the world, for instance France. Scottish Smoked Salmon, is salmon smoked in Scotland, though the origin of the salmon is not disclosed. Theoretically, there is a third label of Scottish Smoked Scottish Salmon, but I can only find one company labelling as such, John Ross Jr of Aberdeen. They have a royal warrant (Fish Merchants & Curers), so you’d like to believe they are making the holy grail of a Scottish salmon, raised in Scotland and subsequently smoked on home turf.

4 — What constitutes part of a building? In January of this year, Frasers Group closed Edinburgh’s iconic Jenners department store for good. Which was sad enough until the company, fronted by Mike Ashley, then removed the famous signs from the side of the building. Edinburgh Council promptly demanded their reinstatement, concluding the sign was integral to the building’s listed status. They were backed up (and possibly prodded) by the building’s actual owner — Danish billionaire Anders Holch Povlsen.

Having bought the building in 2017, there was always an element of risk in the relationship between thetwo famously hard nosed businessmen. Whilst Povlsen was potentially keen to get control of the building’s lease (otherwise, why else buy it?), it’s obvious he wasn’t as keen to see the link to Jenners disappear.

Povlsen intends to turn a portion of the building over to a hotel, but will keep a department store element in the mix. Which means we’ll have a new department store, not called Jenners, in a building with a big (listed) sign on its side reading: “Jenners”.

What’s frustrating from a local’s perspective is that Edinburgh’s current tourism-led economy could hugely benefit from a high quality department store at its heart. Anyone who has ventured into London’s Fortnum & Masons before Christmas can attest to the popularity of well packaged food and drink gifts with provenance. F&M is a little older than Jenners (1707 vs. 1838), but both brands are synonymous with both their cities and their buildings. If Povlsen can wrest control of the Jenners brand from Frasers (a poor custodian of it at best), there is enormous value in it being reinvented as Edinburgh’s answer to F&M.

5 — Anders Holch Povlsen is mostly famous for being one of Britain’s largest landowners, coming in only second to the Duke of Buccleuch. More impressively, his estates in Scotland have all been acquired during his lifetime, unlike the Duke’s who inherited his land.

His love of Scotland stems from fishing trips taken here as a young man. The trips kindled a love of nature he has channelled into a vast experiment in rewilding, creating new forests and reintroducing extinct species. The project has entailed culling large numbers of deer to allow tree growth, which has upset some of his neighbours.

In 2019, whilst on holiday in Sri Lanka, three of his four children died in the Easter terrorist bombings. Despite his private nature and the controversy of his plans, the outpouring of sympathy from the Scottish people was such that he took out a full page advert in The Scotsman to thank people for their messages and support.

https://paddy-fletcher.medium.com/five-things-i-have-learned-this-week-10-70a8e9d035ce