Trade is the process of buying, selling or swapping goods or services. There are two types of trade, Domestic trade and Foreign trade. Domestic trade is trade within the country where as Foreign trade is international. It is important that Australia trades, domestically and foreignly, because Australia is a developing country. Trade supports developing countries and helps them grow. Arnott’s Biscuits Limited is one of the worlds leading food companies, selling biscuits in over forty countries around the globe. This report will examine where Arnott’s is based, the company’s finance, the history of the company and manufacturing, foreign ownership and the effects on the company for Australia.
2.0 Company Background
2.1 Company History
Arnotts began as a small bakery in Hunter Street, Newcastle, 1865, selling bread, biscuits and pies, it is now one of the worlds largest food companies. Arnott’s Australian made biscuits are sold in more than 40 countries, including Japan, USA, Canada, United Kingdom, Indonesia, Tahiti and New Zealand. In 1997, North American company, the Campbell Soup Company, brought Arnott’s. In spite of the move, the manufacturing of the Australian Biscuits continued in Australia.
Arnott’s Australian Biscuits are made in Australia from Australian products. Although the Campbell Soup Company now has ownership of Arnott’s, 99% of Arnott’s products that are sold in Australia, are made in Australia at either, Arnott’s Huntingwood in Sydney, Arnott’s Marleston in Adelaide, or Arnott’s Virginia in Brisbane (As shown in diagram 1).
Arnott’s produces majority of its income from Australian biscuit sales. Due to the amalgamation no information is available to the public. As this is the case, no graph could be made.
4.0 Going Offshore
4.1 What is going offshore?
‘Going offshore’ is a term used when a company moves overseas for cheaper manufacturing or lower taxes. Arnott’s have not moved their company offshore, the Campbell Soup Company bought Arnott’s and they combined to form one organisation, this is called amalgamating.
4.2 Advantages and Disadvantages of Amalgamating (Company)
Amalgamating has many benefits for the company, Arnott’s, some of these include, less taxes and bills paid towards the Government, cheaper to maintain staff, and being supported by a larger company. Although there are many advantages, along come disadvantages. Amalgamating with a larger substantial company could cause loss of identity or reputation, serious cost increase, and connections with local resources could be affected.
4.3 Advantages and Disadvantages of Amalgamating (Australia)
When Australian companies amalgamate with companies out of the country, it means Australian employees are able to continue working within the country while in conjunction with other foreign employees of the combined companies. However, when a company has a change of ownership, the new owners have the choice to...