2006: How does P&G's pharmaceuticals fit in with the rest of the business?
AUDIENCE MEMBER: Good afternoon, gentlemen. Long-time listener, first-time caller here. This is my first shareholder meeting. Thanks for hosting. You guys do a great job. I’m looking forward to coming back for several more years. My name is Craig Beachler. I’m from Cincinnati, where my paychecks are signed by Uncle Procter and Mr. Gamble. Thinking about that, I know that when the P&G-Gillette merger was announced, you called it a, quote, “dream deal.” Considering that P&G is primarily thought of as a consumer products company, what are your thoughts on the short- and long-term fit for P&G’s pharmaceutical business?
WARREN BUFFETT: For just the pharmaceutical business or, did you say, or —
AUDIENCE MEMBER: Long-term growth of P&G as a whole.
WARREN BUFFETT: As a whole. Yeah. Well, you know, I think it’s clear that P&G is a consumer powerhouse of sorts. And I think Gillette — in its field, they have just about as strong a consumer position as anybody will ever have. And when you get into blades and razors, stronger than the — most of the P&G brands, strong as they may be. And I do think that the big retailers are becoming — and more so all the time — brands of their own. And they are becoming — and there’s more and more concentration going on.
So I think the struggle between the manufacturers of brands and retailers will go on and on and become more intensified. So I would think, if I were on either side of that equation, I would want to be strengthening my hand. And I think that — I think the future of both Gillette and P&G are better as a combined enterprise than they would have been as a separate enterprise. And I think that’s particularly true because of the strengths of the Walmarts and the Costcos and — you name it — around the world. I don’t know. How do you see it, Charlie?
CHARLIE MUNGER: He also wants you to tell him how P&G will be affected by its pharmaceutical business.
WARREN BUFFETT: I don’t know a thing about that.
CHARLIE MUNGER: That makes two of us. (Laughter)
WARREN BUFFETT: I really don’t. I’d help if I could, but I can’t.
