Interested in owning a casino? Or cultivating yogurt? Or making some high-quality sparkling wines?asks Michael Lynn.
Well, stay out of France. Even if you think it's the best country in which to do business in those fields, forget it. Unless you're French, you're banned.
When you look at the industries that France thinks are vital to its future, it's helpful to remember that surrealism was originally a French movement.
On Dec. 31, the French government published a decree that allows the state to block foreign takeovers in 11 designated industries linked with national security. It will have the power to prevent anyone buying companies in areas such as defense equipment, private corporate security, cryptology and the production of vaccines against bio-terrorism.
Hold on, casinos are vital to the national interest? …
There are some strange things regarded as vital to the security of the French state these days. …
The quest was for a "French solution," [a] newspaper said.
So, champagne is off-limits. And don't even think about trying to buy a yogurt company. …
There are two charges to be leveled at the latest French outburst of hyperactive protectionism.
The first is hypocrisy. The second, and more serious, is that the state has misunderstood how to nurture the industries that are vital to its economic future.
Nobody could dispute that France is guilty of double standards. After all, plenty of French companies have been busily acquiring international competitors.
Last year, France's Pernod Ricard SA completed the takeover of the U.K.'s Allied Domecq Plc, the owner of beverages such as Beefeater gin and Ballantine's whiskey.
Aren't those brands intrinsically British properties?
Indeed, when you pause to look at the holdings that Pernod has built up, it includes Jacob's Creek wines and Wild Turkey bourbon. Both of them are brands that are undeniably Australian and American, respectively. Likewise, how is it that Accor SA operates the Motel 6 chain in the U.S., a trademark that is about as American as Elvis Presley and hamburgers.
French companies have done well establishing themselves in global markets. Shouldn't firms from other countries have the same rights?
The French government has got it wrong. There is something comical about protecting industries such as casinos, champagne and yogurt, no matter how good Chirac's intentions are.
In a world of fast globalizing manufacturing, it is hard to see how a high-cost, regulated economy such as France can prosper, particularly now that euro membership has ruled out the option of devaluing its currency.
In time, French car manufacturers such as Renault SA may be forced to move all of its production out of France. Even the world- beating Airbus SAS may struggle to carry on assembling its planes in Toulouse.