EARLY BIRD PROMOTION: Register for the Masterclass by May 31 to secure lifetime(!) access. (Only 7 spots remaining)

More info.

The Future Of Capitalism: A Swinkels Economy, Or Heineken Economy?

Tom van der Lubbe
Written by Tom van der Lubbe December 09, 2020

I'm not a big beer drinker, but as an entrepreneur I do follow the financial news, especially when it comes to reporting on companies like Heineken.

2141 1140x0

Heineken reported its Q3 figures last week: in July, August and September, sales of its beers fell by 1.9 percent. The net profit for the first nine months was a ‘mere’ 396 million euros, while in 2019, a profit of 1.7 billion euros was generated over the same period. This is why Heineken wants to cut back on 20 percent of its staff costs.

The other reason I follow Heineken is because I am an avid supporter of so-called Rhineland capitalism.

The difference between American shareholder and Rhineland capitalism

So, what is the difference between American shareholder capitalism and the European Rhineland model? Shareholder capitalism is primarily concerned with the interests of shareholders, while the focus of the Rhineland model is firmly on the interests of all stakeholders: employees, customers, suppliers and shareholders.

The difference between the two models become more apparent in times of crises, with the coronavirus crisis serving as a litmus test. It is a bit like the tale of the emperor’s new clothes. The American model tries to tell us that it also cares about others, but in times of crisis it proves to be naked, just like the emperor was, as everybody could clearly see.

Classic SMEs - the medium and small enterprises, often anchored within their local communities - try to show as much solidarity as possible with their own employees and their location. The listed companies on the other hand, feel the hot breath of shareholders in their necks, who – wherever they may be in the world - decide where their money will yield the highest return.

Comparing the approach of two Dutch brewers

It’s always a bit of an abstract tale, but we can make it tangible by comparing two Dutch brewers: on the one hand the Heineken corporation, listed at the Amsterdam stock-exchange and headed by Mrs de Carvalho-Heineken, who is the controlling stakeholder, and lives in London. On the other hand we have Bavaria, a local brewer, located in the southern province of Brabant, and run by the Swinkels family since seven generations. CEO Peer Swinkels grew up in a catholic environment, meeting after church on Sundays, with the whole family at his grandparents house.

Heineken generated sales of 28.5 billion euros in 2019, and below the line had an operating profit of approximately 3.5 billion euros. By comparison, Swinkels generated 892 million sales in the same year, with an operating profit of 94 million. Both brewers therefore make about 10% profit on their turnover, despite Heineken being 30 times bigger.

The wealth both families have been able to amass through beer brewing is public knowledge: Mrs. de Carvalho-Heineken, as can be read in the business magazine Quote, is currently worth in excess of 14.2 billion euros. This is no mean feat, because at the time of her father Freddy's death, the share package she inherited - as the only daughter - was worth 3.7 billion euros. On that same Quote list, the Swinkels family was listed for 650 million euros in 2019. Interesting detail: The Swinkels family has also almost tripled its assets since 2002: that year, its net worth was still 250 million euros.

CEO Peer Swinkels: "We are in the midst of a major crisis that directly affects our industry. Our priority is to get out of this crisis healthy and stronger, together with our employees, customers and business partners."
Click to tweet

Swinkels have the advantage of not being listed on the stock exchange, and still remaining in charge of their company, enabling them to play the long game. On the family-owned company's website, CEO Peer Swinkels says: "We are in the midst of a major crisis that directly affects our industry. Our priority is to get out of this crisis healthy and stronger, together with our employees, customers and business partners."

I hope that the Rhineland DNA of the Swinkels family and the financial buffer of the past are strong enough for Bavaria and other beer brands to avoid redundancies, such as Heineken has announced.

I sincerely hope they will prevail; not only as an entrepreneur, but also as a citizen. Because in this respect, the coronavirus crisis is not only a litmus test, but also an opportunity.

So, dear citizen, what will it be for last orders: would you prefer a Swinkels economy, or a Heineken economy? You can have your say, mainly in the supermarket for now, as a consumer.

(This article previously appeared in a slightly different form in the Dutch newspaper Trouw.)

Written by Tom van der Lubbe
Tom van der Lubbe
I am an entrepreneur and Co-Founder of Viisi, a mortgage advice company. I believe we should leave the world in a better shape than it was when we were born.
Read more
Apr 28, 2024
The Purpose Experiment: From Dream to Crushing Reality
Tine Bieber Written by Tine Bieber
In late 2016, while searching for a thesis topic for my master's degree at Business School, I aimed to challenge the status quo and bring…
Read more about The Purpose Experiment: From Dream to Crushing Reality
Sep 03, 2023
The Purpose Dance: Shared and Individual Beats at the Heart of Organizational Impact
Marc-Peter Pijper Written by Marc-Peter Pijper
My wife and I, accompanied by our friends, often enjoy attending music festivals. What unites us is our mutual love for live music and the…
Read more about The Purpose Dance: Shared and Individual Beats at the Heart of Organizational Impact
Aug 20, 2023
Scaling the Right Way: Clarasys' Path Forward with Progressive Principles
Klara Nenadlova Written by Klara Nenadlova
At Clarasys, our core purpose is to make a lasting difference to the way how people work, live, and grow. As an independent consultancy…
Read more about Scaling the Right Way: Clarasys' Path Forward with Progressive Principles
Jun 14, 2023
Steward-ownership: Choosing Purpose Over Profit
Gijsbert Koren Written by Gijsbert Koren
This post is part of an ongoing series with inspiring stories about steward-owned companies that are changing the game. Steward-ownership…
Read more about Steward-ownership: Choosing Purpose Over Profit
May 11, 2023
Map of Meaning: Change The Meaning of Work Instead Of Organizational Structure
Pim de Morree Written by Pim de Morree
'Why am I here'? Ever wondered that, at work? How much you value the answer to that question, can be outlined with the map of meaning. Read…
Read more about Map of Meaning: Change The Meaning of Work Instead Of Organizational Structure
Mar 08, 2023
Steward-ownership: For Entrepreneurs Who Want to Make a Positive Impact
Gijsbert Koren Written by Gijsbert Koren
Have you heard about steward-ownership? If not, you probably heard that Patagonia’s founder, Yvon Chouinard, is giving away his company to…
Read more about Steward-ownership: For Entrepreneurs Who Want to Make a Positive Impact
Read all articles

Download: Free Guide

Unlock our in-depth guide on trends, tools, and best practices from over 150 pioneering organizations.

Subscribe below and receive it directly in your inbox.

    We respect your privacy. Unsubscribe at any time.