Don't Cry over Spilt Milk: Blackstone and the Oatly Saga

 Oliver Iskandar Banks

A patch of deforested land in the Amazon

On July 14th, a group of investors led by Blackstone announced that it would be trading a 10% stake in Oatly for $200m. This valued the oat-milk producer, founded by a food science researcher in 1994, at $2bn. Not only did this signal a broader shift by the establishment investing industry into the “ethical consumerism” market, but it raised the ire of Twitter. In a classic cancel culture move, many have characterised the deal as a sell-out by Oatly, prompting calls to boycott the brand. This reaction demonstrates how out of touch with the logical implications of a market economy a polarised online debate can be.

Those that have called for boycotts characterise Blackstone as an unethical agent, profiting from environmental destruction. The crux of the issue is their direct and indirect investment in Hidrovias do Brasil, a logistics company that builds transport links from the Amazon interior to navigable waterways. The conservationist argument is that by creating roads and ports, Hidrovias facilitates agribusiness-related deforestation along these roads, unsanctioned by the Brazilian authorities. On top of land-clearing practices by global conglomerates such as Cargill already permitted by Bolsonaro’s government, this contributes to ecological pressures and accelerates climate change¹. An investment received from Blackstone, who are effectively a controlling interest in Hidrovias, is thus ethically charged.

The concerns are twofold. One, some of the money Oatly received derives from unethical conduct. The unspoken assumption here is that a negative moral judgement can be made on the business practices of the sprawling impersonal entity that is Blackstone. This also makes the less contestable claim that we can attribute moral weight to an exchange of money. Arguments about the virtuosity of the investment supermarket, or rather, its lack of, cite the conduct of its CEO as evidence, in a gesture that recalls the body politic of medieval political theology.

Stephen Schwarzmann, Blackstone's controversial CEO.

The second concern voiced on Twitter may be that the profit-driven (in economic terms, rent-seeking) character of the investment giant will corrupt Oatly’s corporate philosophy, one that emphasises environmental responsibility. Blackstone managers may push Oatly to maximise returns at the expense of their sustainability credentials. In such a scenario, their oat-milk products fail to be “ethical”, and thus, the proper moral course is to stop purchasing them. Those that are currently boycotting presuppose this conclusion and have ceased purchasing in an anticipatory, punitive move.

The online portrayal of the Oatly saga recalls a Marxian dualism, which the company itself has endorsed Rather than featuring the capitalists and the workers, the struggle is between the ethical and unethical. The capitalists are slave to profits, rather than a search for moral virtuosity, and thus their actions are ultimately unethical. Those who use their pecuniary and social powers to promote sustainability, frugality, and/or ethical living, are said to be ethical.

On account of the first concern, the position of the boycotters is incoherent – because regardless of one’s moral standing, it is impossible to be an ethical consumer in the deontological framework they implicitly suppose. All money in a capitalist system can be related to at least one instance of unethical conduct. We do not need to resort to claims about the inherent moral poverty of commodification to assert this. Nor does it take an interpretation of consumption as definitionally appropriative, as others have done, to destabilise the notion of ethical living under capitalism. All we require is an honest and considered understanding of what markets really are. They are impersonal, they are anonymous, they are massively interconnected, and unfathomably complex. Because companies cannot choose who buys their products, they can never – not even in optimal circumstances - be sure that monies they receive as revenue come from morally blameless actors. The ramifications of this problem of incomplete information are easiest to see when considering the ethical standing of a typical Oatly consumer.

Oatly's informal corporate charter

Oatly is, by and large, bought by people that lead ethically dubious - but completely normal - lives. Some of their consumers wake up on pillows stuffed with animal feathers. Others might reach for a phone made by mistreated workers in China. After a rough night in a socially distanced bar, they might take an unusually long shower – contributing to water shortages in other areas of the country. The man that cheaps out on his suits puts on clothes made by Bengali children, who have been made to work in gruelling conditions from the age of twelve. Every time an Oatly-drinking office worker switches on their computer, they may be using a product made with metals mined in warzones to earn their wage. If they somehow manage to avoid these more conditional aspects of moral entanglement, on their drive to work they will most likely contribute towards childhood asthma and climate change.

Whether or not they are aware, every person who leads a life that does not radically deviate from the norm engages in globalised networks of immorality. The ethical standards applied here are not impostured or obscure– they follow the same strands of pseudo-conservationist thought that call for a boycott of Oatly. Under this inflexible logic, which treats corporations as individuals, and chooses the easiest party to blame in the deforestation story, Oatly has always accepted money from unethical actors. These unethical actors do not need to be demonized multinationals – they can be health care workers, primary school teachers, and human rights lawyers.

If to be an unethical actor is to engage in acts that ultimately lead to suffering, exploitation, and environmental degradation, then mild manners and unassuming vocations do not absolve any of us.

Blackstone’s management teams may engage in unethical behaviour, but the $200m sum they invested in Oatly does not categorically differ from the $200m in revenue Oatly took from consumers during 2019. The money invested in the oat-milk brand is going to finance continued business operations, as well as expansion – the same ways, then, that money collected from normal but unethical consumers was, and still is used. Investments, whether derived from institutions or individuals, public or private companies, have the same moral weight as revenues, and this is true for every firm operating within a modern business environment.

This somewhat abstract stance does not, of course, take into consideration the issue of corporate control. How can we compare the power of the consumer, which is diffuse and uncoordinated, to that of a controlling interest? To well-positioned executives that have personal power over the fate of a firm?

And at that, we run into the second concern: the one that is perhaps more legitimate, but nevertheless misguided. The 10% that Blackstone et al. will take in the company will give them influence over Oatly’s policy. It would be hard to deny this. But no matter what the beliefs of their founders are, or how pure a mission their marketing material espouses, Rickard Öste’s creation operates within a capitalist, consumerist space. Profit may not be their imperative, but financial welfare must always be a consideration; and as a firm subject to the pressures of the market, they take every chance they can get to build a competitive edge. Else, they risk atrophy.

The Little Capitalist Hen falls foul of the complexities of advanced capitalism.

In their press release that sought to justify the investment, Oatly told a story about their approach to consumer markets. They are one of the few brands in their segment that has broken into mainstream retailers. Initially, the team thought that selling their product on supermarket shelves would be morally problematic, given that those same supermarkets profit from the (unethical) meat and dairy industries. However, they came to the Benthamite conclusion that the positive effects of making oat milk products available to “everyone” outweighed the downsides of doing business with unethical actors.

A condemnation of Oatly based on the possibility that Blackstone might affect company policy at an unforeseeable point in the near future ignores the costs and benefits that endorsing or boycotting the firm imposes on us. In a corporatist age, voting with our wallets is perhaps the most accessible tool ordinary citizens of the post-industrial West have at their disposal. A purchase of Oatly is a vote for cruelty-free dairy and more sustainable food production. Unless you are radically opposed to the notions of animal rights and the rights of future generations, this is probably a good thing. Whilst many on social media encouraged others to switch brands to better alternatives, Oatly is one of the few established competitors that has a genuine chance of global success; the kind of success that could reshape Occidental consumption habits.

Those that call too loudly for boycotts do not see the counterfactual: the choice may not be between oat-milk and another dairy substitute, but between Oatly and nothing at all.

Ordinary people should have access to products made with as little damage to the environment and human life as possible, and buying Oatly is one of the best ways to bring this about. Although it is laudable that consumers have started to hold companies to higher ethical standards, reactionary attitudes like those too often voiced in online debate only impede the path towards a less destructive and harmful society. We should cherish brands that lean towards the ethical side, because they are rare. In a system of ordinary, rent-seeking individuals, we should feel lucky to have them.

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1 The scars of deforestation on the Amazon look disturbingly like the marks of self-harm.