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Boycott Proves to Be the Best Medicine: Walgreens Announces It Will Remain 'American'

Walgreens corporate executives have decided that a "corporate inversion," a loophole that allows an American company to purchase a stake in a foreign company and then avoid paying U.S. taxes, "is not in the best long-term interest of stockholders." Good plan.

Walgreen’s decision to maintain its tax domicile in the United States ends months of speculation and a steady drumbeat of criticism of the company from activists, unions and politicians, including President Barack Obama, for considering moving its headquarters overseas.

Public backlash to Walgreen weighing reincorporating either in the United Kingdom or Switzerland played a role in its decision to remain in the U.S., Walgreen said.

But Walgreen, by far the most visible to consumers, had come under increasing pressure to keep its tax base in the United States. Last week, the president called corporate inversions an “unpatriotic tax loophole,” and urged Congress to act on legislation to halt the exodus.

Some analysts and investors who worried that Walgreen faced a potential blowback from American consumers, and possibly the government, if it effectively renounced its U.S. citizenship. 

Ya think?

My Facebook feed and email inbox blew up when the company first announced this plan. On FB, friends were vowing to boycott their local Walgreens stores and transfer prescriptions. Granted, that's easy to say, but who knows how many would have actually followed through?

However, the email campaigns from groups like DFA, petitions, and public statements from the President on down had the potential to do just as much damage.  The company faced a publicity debacle. If Walgreens' management wanted to keep calling itself "America's Pharmacy," it darn well needed to be an American company.

Management made a good call and kudos to all the customers who protested. The marketplace does have power; we have power. Let's never forget that. 

 

 

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