Skulduggery afoot at Ikea

Published on Thursday 6 March 2008 20:27

IS IKEA, the iconic Scandinavian design emporium, nasty to the Danes? Those who buy their furniture and household products there will know that traditionally it gives each design range the name of a Scandinavian town, animal or geographical feature.

This seems innocuous enough, except that two academics in Copenhagen have been researching what names are attached to what products and are accusing Ikea of using Swedish, Norwegian and Finnish place names for upmarket furniture while restrictin

The Danes say this is a subliminal message in which the Swedes are putting down the Danes. With true Swedish pragmatism, Ikea replies that "these critics appear to greatly underestimate the importance of floor coverings".

However, there is more to this international spat than meets the eye (or the feet). For although Ikea originated in Sweden, the private, tax-exempt trust that ultimately owns the group is registered in the Netherlands, as is a separate firm that owns the trademark and franchises the stores. Who would want to pay Swedish levels of taxation, if they could help it? Taxation is further reduced by sub-contracting management services to yet another company, at a suitably large fee. This company is registered in … Denmark.