UK producers of Scotch Whisky and biscuits are bracing for a significant financial hit as new 25% US tariffs came into effect from today (18 October) in retaliation for subsidies given to aerospace manufacturer Airbus (The Guardian). The new tariffs on £6.1bn of EU exports entered into effect from Thursday with sales of Scottish whisky expected to drop as much as 20% within a year. Other industries being targeted include European cheeses, olives and aircraft (Sky News).
As Prime Minister Boris Johnson announced he has secured a new Brexit deal with the EU on Wednesday, British businesses have expressed concern that the new plans will make exporting to their biggest market, the EU, harder. Industry sources claimed that the new deal was either worse or the same as the one secured by former PM Theresa May ahead of the original Brexit deadline in March (The Guardian).
Meanwhile, the FDF has expressed concerns that the Government’s efforts to secure trade deals will sacrifice British standards. In a letter sent to environment secretary Theresa Villiers, the FDF underlined ”growing industry unease” that the need to secure bilateral trade agreements may result in the Government allowing for lower standards (Sky News).
Asda-owner Walmart has cleared the path to a potential flotation of its UK supermarket after striking a deal with Rothesay to offload £3.8bn of pension liabilities (Sky News).
Vaping giant Juul Labs will stop selling online in the US its fruity-flavoured e-cigarette pods amid continuing backlash after several deaths and lung illnesses in the country were linked to vaping. Awaiting a review from the FDA, Juuls said it will stop selling its non-tobacco and non-menthol-based flavours in the US (The Financial Times). Juul has agreed to a settlement restricting its youth advertising practices, the first legally binding commitment related to marketing to children for the embattled e-cigarette company (The Guardian).
Meanwhile, marketing threats against the biggest tobacco company in light of the recent e-cigarette regulatory backlash could put the brake on their sponsorships with Formula One, creating a risk to the racing teams’ revenue streams (The Financial Times).
Unilever has delivered weaker-than-expected sales amid slowdown in emerging markets. Sales grew 2.9% €13.3bn in the period, falling short of the 3% expected by analysts and worse than a year ago when organic sales grew 3.8% (The Financial Times £). Lacklustre ice cream sales and a slowdown in China and India stalled Unilever’s quarterly sales growth, causing the Anglo-Dutch consumer giant to narrowly miss market expectations (The Times £).
Meanwhile, Unilever, the owner of PG Tips and Lipton, has warned that the UK’s builder tea is “dying” as younger consumers turn to trendier alternatives, including herbal teas and coffee (The Telegraph).
Nestlé has pledged to return $20.2bn to shareholders over the next three years by way of buybacks or special dividends, after the sale of skin health business. The news, announced alongside Nestlé’s third quarter results showing organic sales growth of 3.7% for the first nine months of the year, seems to suggest that CEO Mark Schneider turnaround effort is gathering successes. Schneider seeks to raise sales growth and profit margins at the Nescafé maker by divesting non-core assets (The Financial Times £).
Nestlé’s bottled-water division however, showed flat sales amid environmental backlash against the single-use plastic. To restore growth, the fmcg giant is planning a premiumisation strategy for the division, adding extras like flavours and fizz (The Financial Times £).
Official data showed UK retail sales flatlined in September amid increasing concerns within customer spending (The Financial Times £). The weak data has raised fear over the ever-so-close key Christmas trading season with department stores and household goods chains among the weakest link in the past three months (The Telegraph).
WH Smith announced plans to double its international travel operations with the acquisition of Las Vegas-based Marshall Retail Group for $400m. Shares in the newsagent and stationary retailer rose 8% in London on Thursday, to their highest level since January 2018 (The Financial Times £). Shares in WH Smith jumped over 6% after the retailer announced it had snapped up Las Vegas-based Marshall Retail Group for £312million (The Daily Mail).
WH Smith seems to have buck the trend of decline on the UK high street, writes The Financial Times £ in an opinion piece. “If the story of Britain’s high street is one of inexorable decline, then the paperback will be on sale at WH Smith,” the newspaper states, claiming that the latest deal will see WH Smith become an “airport blockbuster”.
Despite its US push, Carl Cowling, the incoming CEO of WH Smith, has pledged to remain a UK high street “fixture” (The Telegraph).
Investment in European food and agritech start-ups is expected to more than double this year, reaching a total of €2.3bn (The Financial Times).