This week’s news includes; Supreme Court rules in favour of minimum alcohol pricing, Tesco – Booker merger gets preliminary CMA approval, Tesla unveils electric truck.
Below are our top 10 stories that you need to know about. Be sure to check our twitter page and Facebook page for regular posts of important headlines. Get all the important stories and insights straight into your inbox by subscribing to our mailing list here.
Opinion articles of the week:
- The Law Gazette looks at a claim that Tech-savvy barristers are ideally placed to take advantage of the so-called gig economy.
- BBC News explores Michael Bloomberg’s claim that London will remain “Europe’s financial capital”
- Financial Times looks at the UBS chairman’s
- Investopedia questions whether Amazon’s market cap could reach $1 trillion within a year.
- City A.M looks at credit rating agency S&P’s claim that UK banks are now better placed to deal with Brexit
1. SUPREME COURT PERMITS MINIMUM ALCOHOL PRICING
The UK Supreme Court has unanimously ruled that the Scottish parliament is allowed to set minimum alcohol prices. Scotland will impose a 50p-per-unit minimum price for alcohol to help tackle alcohol problems in the country. Scottish consumers purchase 20% more than alcholo than the rest of the UK. This measure makes Scotland the first country in the world to impose minimum alcohol pricing.
Scottish Parliament passed the bill in 2012 but only now has it fought off its final legal challenge. The Supreme Court held that the move was a “proportionate means of achieving a legitimate aim”.
One notable example of the increases includes; a four pack of 500ml 4% lager cans will rise from £1 to £4. The measure is expected to be implemented in early 2018.
City A.M explores some reactions to the decision.
2. TESCO-BOOKER MERGER GETS CMA APPROVAL
The Competition and Markets Authority has given preliminary approval to Tesco’s acquisition of Booker. The £3.7 billion deal raised significant competition concerns as Booker is one and many rivals protested the merger.
The supermarket industry watched the outcome of this and may open the gates for conciliation in the sector. Sainsbury’s pulled out of their bid for Nisa local stores but this news could encourage them to explore other potential acquisitions. Co-op have now proceeded to acquire Nisa local for £137 million and recently gained shareholder approval.
The CMA found that the market would still be competitive. Despite Booker being the UK’s largest food wholesaler, it holds under 20% of the market share. Furthermore, customers from the catering sector make up nearly a third of their sales, a sector which Tesco does not supply.
BBC News looks further at the merger.
3. VENEZUELA FINANCIAL CRISIS
Venezuela is in deep financial crisis as it is desperately seeks to restructure its repayment deal with creditors. Last week, the country failed to make coupon payments on its government bonds raising serious concerns about its abilities to meet its financial commitments. Credit rating agency Standard & Poor’s announced that Venezuela had entered a “selective default” and believe there is 50% chance of default in the coming quarter. – A “selective default” occurs when a borrower fails to pay one or more of their obligations BUT continues to meet other payment obligations.
It has however, made some progress in restructuring talks as Russia has agreed to restructure the $1.35 billion debt that is owed to it but many countries are much less confident.
Falling oil prices has sent the economy crashing and into a state of hyper inflation. In December 2016 annual inflation hit a staggering 800%. There is very little hope amongst analysts that Venezuela will be able to fulfil all its obligations and there are now serious concerns about the economic future of the country.
Read Yahoo Finance’s report for all you need to know about the crisis.
4. SIEMENS JOB CUTS
Industrial manufacturing company Siemens revealed plans to cut 6,900 jobs globally. Half of the jobs will be lost in its home country, Germany. The main reason for the job cuts was due to a substantial fall in demand in its power and gas division.
The company did announce however, that there will be no forced redundancies in the UK. It announced earlier this year that over 6000 jobs were to be cut in its wind energy division due to falling market prices
BBC News looks closer at the jobs cuts.
5. HSBC SETTLES WITH FRENCH REGULATORS
HSBC is to pay out €300 million to the French financial regulator to settle a dispute over its conduct. The Panama Papers revealed tax avoidance schemes and there was evidence that HSBC’s Swiss unit had, in the past, helped clients avoid tax. The conduct however, fell short of regulatory requirements. HSBC still a number of disputes worldwide and is likely to receive a number of fines in the near future.
Read the Independent’s report for more information on the issue.
6. AIRBNB ACQUIRES ACCOMABLE
AirBnB has acquired Accomable, a start-up designed to help disabled travellers find accessible accommodation. This is part of AirBnB’s plan to open AirBnB to a wider consumer base. Currently, users with disabilities must contact hosts directly to find out whether the accommodation listed would be suitable for them
Accomable, founded in 2015, is a London Based start up that provides lists of accommodations, specifying those that cater for certain disability needs. This feature will now be integrated into AirBnB’s platform and Accomable will eventually be shut down. The purchase fee was not disclosed.
Read Business Insider’s report for more information and reactions.
7. BRIDGEPOINT’S BURGER KING ACQUISITION
Private equity firm Bridgepoint has finalised a deal Burger King Europe, that will now make it the master franchisee of Burger King in the UK. The firm is also acquiring Caspian Group which currently franchises 74 restaurants in the country. The fee for the purchase has not been disclosed.
This is the latest addition to Bridgepoint’s restaurant portofolio. The firm is also the main shareholder in Pret a Manger as well having stakes in Azzurri and ASK Italian.
City A.M looks closer at the deal.
8. TESLA’s ELECTRIC TRUCK
Tesla has revealed its first electric truck. The Tesla Semi will go into production late 2019 and hopes to challenge the traditional diesel lorries that dominate roads worldwide. On a single charge the truck can cover 500 miles and it can do 0-100mph in 4.2 seconds without load. When pulling a 36 ton load it can do 0-60mph is 20 seconds.
The battery packs for the semi trucks alone costs $200,000 while conventional diesel trucks costs $120,000 in total. It will be interesting to see how widely these trucks will be adopted.
BBC News looks further at Tesla’s plans.
9. JAGUAR LAND ROVER DRIVERLESS TECH
Jaguar Land Rover tested its driverless cars on UK public roads last week. The tests took place in Coventry and following an 0.5 mile route. These tests did have humans on board and the cars have an override mechanism in the event of emergencies. JLR and Ford are collaboratively looking to develop cars that can communicate and respond directly to the actions of another car rather than relying solely on sensors.
The government is very enthusiastic about the potential of driverless cars. These trials like these are part of the £20 million government funded UK Autodrive Project and it aims to make the use of driverless cars common by 2020.
BBC News further analyses our future with driverless cars.
10. TALKTALK FINANCIALS
TalkTalk struggled to add new customers and suffered a substantial loss for the first half of the year. The telecoms company posted a loss for £75 million for the first six months of 2017. They were able to add over 26000 new customers to its broadband plans but this was not nearly enough to save its balance sheet.
These results were highly disappointing considering the same period last year it was £30 million. Shares in the company initially plummeted by 18% in response to the news.
Sky News looks closer at some of the reactions.