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Globalisation in your red wine

Without trade across national borders, many Danish companies would quickly cease to exist. The current backlash against the open global economy must therefore be taken very seriously, business leaders say.
"With all due respect to the Danish wine production, we would all be left to our own fate if we weren’t able to buy red wine abroad," says Managing Director Ib Bergkjær, Sigurd Müller Vinhandel A/S
Photo: Lars Horn/Baghuset

Publiceret: 09.02.2017
Af Peter G. H. Madsen mail

Sigurd Müller Vinhandel A/S in Aalborg is no worldwide business.  Throughout its nearly 200-year lifetime, the company has done well selling wine in Denmark. And it has no plans to take on the US market - or the European market, for that matter.

Nevertheless, the company is heavily reliant on global trade opportunities, says Managing Director Ib Bergkjær.
 
“With all due respect to the Danish wine production, we would all be left to our own fate if we weren’t able to buy red wine abroad. In short, we simply would not have a business,” he says.

What Sigurd Müller Vinhandel lacks in global presence, Danfoss A/S has.

With factories in more than 20 countries and sales to nearly 100 countries, global reach is embedded in the company's very DNA, says Danfoss CEO Niels B. Christiansen.

“It’s naturally crucial for us that we can sell our products across national borders. Danfoss is and remains a global company,” he explains.

See also: Video - Dansih products travel the world

A world full of possibilities

The two companies are a good illustration of the fact that whether your company's primary focus is the Danish market or your gaze is directed far beyond the country’s borders, a global and open world helps to create opportunities for Danish businesses.

For some companies, it has to do with the possibility of buying goods and services abroad to sell to Danish consumers and companies, while for others, it has to do with the existence of opportunities and major profits far beyond the country's borders.

The positive attitude towards a globalised world also permeates a recent survey of the Confederation of Danish Industry’s member companies. Here, 84 per cent of companies reply that it is a good thing that Denmark is involved in the global economy because it creates access to new markets and opportunities for companies.

See also:  Danish companies defy fear of globalisation

Protectionism will hit hard

The positive view of globalisation’s impact is, however, far from the case in all parts of the world, as clearly demonstrated by the US election and the British withdrawal from the EU. For Danfoss CEO Niels B. Christiansen, this development is cause for concern.

“Protectionist signals create an uncertainty that could result in a total decline for all companies and a decrease in global prosperity.  It would have a widespread impact. If this happens, we must prepare ourselves for a continuation of the recession period. In that case, we will organise our company accordingly,” he says.

Nor from the perspective of Sigurd Müller Vinhandel is there much good to say about the increasing scepticism about globalisation.

“It may well be that a big country such as the US can fend for itself. But without a certain freedom of trade across national borders, it would quickly become very problematic for me and my business,” says Ib Bergkjær.

It is, however, important for Ib Bergkjær to emphasise that this does not mean that everything should flow freely across national borders. Particularly when it comes to wine sales, it is important that there is respect for distribution agreements.

“We struggle on a daily basis with parallel imports of goods that we have the right to distribute in Denmark,” he notes.

See also: Danish businesses - Exports is our bread and butter

The benefits of globalisation must be highlighted

The question is, of course, what can be done to reverse the negative view of globalisation – and, not least, what business leaders can do.

CEO of Danfoss Niels B. Christiansen does not think it makes much sense to spend time pointing fingers and placing blame elsewhere.

“I'd rather turn it around and say that at both political and corporate level, we have a duty to describe the benefits and opportunities that globalisation holds. But at the same time, we must acknowledge and help find solutions to the challenges we also experience,” he says.

One element of this task is to realise that globalisation and technological development mean that the world is changing and challenging the status quo, which is not necessarily positive for everyone.

“We need to help so that society as a whole can reap the benefits. And naturally, we must assist in including everyone, because we know that some jobs and groups will be challenged,” says Niels B. Christiansen.

See also: Half af Danish exports comes from 100 companies

Stop lamenting

There is, however, no reason to be overcome with worry, because there are many positive aspects that we have an obligation to communicate. While it is true that there are protectionist tendencies, there are also countries arguing for increased free trade and openness, notes Niels B. Christiansen. 

One of the most notable examples of the latter took place during the recent World Economic Forum in the Swiss town of Davos, where Chinese President Xi Jinping emphasised that globalisation has received unwarranted blame for many of the world's problems and that trade wars will never have a winner - only losers.

On the same occasion, Xi Jinping explained to the crowd of business leaders, politicians and opinion formers that protectionism is similar to locking yourself up in a dark room.

“While wind and rain may be kept outside, so are light and air,” the Chinese president said in his speech.

According to Niels B. Christiansen, Denmark should also keep its doors wide open.

“We’re far ahead in Denmark, and we’re doing well. We must maintain this promising performance, because if we continue the positive developments we’ve seen in recent years, globalisation will provide great opportunities for a small open economy like ours.” 

Protectionist signals create an uncertainty that could result in a total decline for all companies and a decrease in global prosperity.  It would have a widespread impact. If this happens, we must prepare ourselves for a continuation of the recession period.
CEO NIELS B. CHRISTIANSEN, DANFOSS A/S
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PUBLISHED: 2/9/2017 LAST MODIFIED: 2/9/2017