The week’s news included; Boris prorogues Parliament, Johnson & Johnson to pay half a billion in opioid lawsuit, Thomas Cook secures rescue deal, KFC trials vegan fried “chicken”
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:
- Washington Post – How beef demand is accelerating the Amazon’s deforestation and climate peril.
- Lawcareers.net – New-wave legal technology: what’s required from lawyers of the future?
- Tech Crunch – 2019 tech IPOs: Some thoughts from the public company roller coaster.
1. BORIS JOHNSON PROROGUES PARLIAMENT
Prime Minister Boris Johnson’s plan to prorogue Parliament has been approved, slashing Parliament’s window for blocking a no-deal Brexit. Parliament will now be shut down from as early as 9 September until the Queen’s speech on 14 October. All motions or Bills within the House will not progress until Parliament reopens. This measure was deemed the nuclear option from Boris Johnson and has predictably sparked outrage from MPs. They see the move as a wholly undemocratic way to push through a no-deal Brexit, without a mandate. Some senior Tory MPs have threatened supporting a vote of no-confidence tabled by the opposition. Boris Johnson insists that the measure does not prevent MPs debating Brexit before the 31 October deadline.
Supporters of Johnson’s actions argue that all new governments usually prorogue Parliament in order to lay out plans in a Queen’s speech. Johnson’s prorogation will be for 23 working days, in stark contrast to the 2016 prorogation which lasted just 4 working days. Parliament also does not sit in this period for party conference season. Parliament is not however, prorogued during this period it goes on recess and MPs approve recess dates, unlike prorogation.
Last week, Parliamentarian’s went to the Court of Sessions to request an interim interdict, a tool similar to an injunction, to temporarily block the prorogation. The court rejected the request, deeming there was no “cogent need” for it. Parliament cannot be suspended until September 9th so and a full hearing is due to take place this week. The court did, however, bring forward the date of the full hearing from Friday to Tuesday (03/09). Johnson has opened a can of worms with this move as opponents are scrambling to block the measure. Whether Parliament will have time to block Johnson’s “do or die” no-deal Brexit plan remains to be seen.
2. JOHNSON & JOHNSON PAY OUT
Johnson & Johnson (J&J) has been ordered to pay out $572 million in an Oklahoma court due to its involvement in the state’s opioid crisis. In the US, 400,000 people have died from opioid addiction in 18 years. The pharmaceutical giant had fuelled the crisis through misleading marketing and aggressive selling to physicians. The judge deemed the conduct as contributing to the creation of a public nuisance. J&J encouraged sales representative to downplay risks of opioid addiction and aggressively targeted physicians who frequently prescribe opioids.
The payout was substantially less than expected, with some analysts predicting as much as $5 billion. Oklahoma had initially sought $17.5 billion in reimbursement from the company. The court ruling pleased investors as shares in J&J were up 2% in response to the news. J&J plans to appeal the judgement. Bloomberg looks at the case in more detail.
3. GERMAN ECONOMY ON THE BRINK
The German economy is drawing nearer to recession as business confidence sinks. Germany’s manufacturing output has shrunk, largely due to the US-China trade war. The trade war has negatively affected demand for German goods. Manufacturing is the engine of the German economy and this is having a knock-on effect on the wider economy. GDP shrank by 0.1% last quarter and analysts think another quarter of contraction is likely, putting the economy in a technical recession. Business confidence amongst German companies is at the lowest level since 2012 and the outlook is gloomy. While analysts do not see a 2009-type recession, some are calling for economic stimulus to kickstart the economy. Germany’s state is symptomatic of a wider global economic slump and a recession could cause a domino effect. Germany is the economic powerhouse of the EU so a recession could have a substantial impact, not just across the Eurozone, but globally.
4. THOMAS COOK SAVED
Thomas Cook has been rescued in a £900m deal with Chinese investors and lenders. The troubled airline will receive a £450 million cash injection from Fosun in return for a 75% stake in the tour operating section of the business. The remaining 25% will go to lenders who will also inject £450 million. Lenders will receive 75% of the airline while Tosun will gain the remaining 25%. In addition, Thomas Cook’s £1 billion debt will largely be converted to shares. The airline has been on the brink of collapse after poor sales and £1.46 billion half year loss.
This will deal likely see the company delist from the stock exchange eventually. The recapitalision is expected to take effect in October. Thomas Cook’s share price slumped by over 16% in response to the deal.
5. GOALS SCANDAL
Goals Soccer Centres has put itself up for sale after an accounting scandal. In August, Goals uncovered improper behaviour in accounts dating back to 2010. The former CEO and CFO are now under investigation for allegedly misstating historic financial statements and leaving a £12 million black hole of unpaid tax.
The company’s shares were suspended, and it is now set to delist from the AIM stock market in September. The company is now inviting buyers for its business and assets. Goals is currently 19% owned by Mike Ashley Sports Direct. Goals has 45 centres in the UK and the sadly, the company has actually been performing well. Goals posted increased UK sales of 11% in the first half of 2019.
6. FOREVER 21 BANKRUPTCY
Forever 21 is reportedly preparing to file for bankruptcy. The retailer has been seeking rent reductions after consistently poor sales. Forever 21 opened numerous stores rapidly when times were good but customer shopping trends are changing. Forever 21’s online shopping experience has been deemed poor and it has too many stores but not enough footfall to stay afloat. Online retailers such as ASOS and Boohoo have been eating at Forever 21’s core customer base and it has found itself unable to keep up. The company is now expected to file for bankruptcy protection. Forever 21 has over 800 stores in 57 countries. The company is still owned by its founders Do Won and Jin Sook Chang who are currently worth $1.5 billion.
7. LONDON UNDERGROUND TO WARM HOMES
The heat from the Northern Line will now be used to heat homes in North London. Heat will be piped from the underground. This follows a recent trend of schemes seeking to use “waste heat” as a renewable heat source.
The heat will be used to warm over 1000 homes in Islington once the project is complete. There is hope that widespread use of waste heat could be rolled out across London. Heat can also be obtained from places such as factories and power plants. The Greater London Authority claims 38% of London’s heating demands can be met through utilising waste heat. The Guardian looks at the increased uses of waste heat.
8. KFC TRIALS VEGAN CHICKEN
KFC is teaming up with Beyond Meat to trial plant-based chicken nuggets and wings. The ” Faux meat” Will be available only at one store, in Atlanta, US. Based on customer feedback, KFC may roll out the product globally. The decision was due to the growth in appetite for meat alternatives due to both health and environmental reasons. Beyond Meat products have also been hailed for their strong resemblance in taste to real meats.
Beyond Meat is quickly become a darling with investors as its share price rocketed following it’s recent IPO. The food maker has also struck deals with Subway, TGI Fridays, Dunkin’ and Del Taco. There is every chance could be the beginning of a wider cultural shift towards plant-based meat alternatives.
9. ADIDAS FIRST GAMING SPONSOR
Adidas has announced that it has entered into a sponsorship deal with gamer Tyler “Ninja” Belvin. This is the first professional gamer Adidas has signed up. Ninja will become a brand ambassador although no details have been released about the merchandise that will produced under the deal. Ninja is a gamer who came to prominence through his Fortnite streams on gaming streaming platform Twitch. He has become one of the biggest names amongst players. He currently has 160,000 paid Twitch subscribers earning him $500,000 every month.
10. BBC TRIALS ALEXA RIVAL
The BBC has unveiled plans to release its own voice assistant. The assistant will be built in the BBC website and can be active by saying “Beeb” although this is provisional. The technology will work on smart speakers, smart phones and smart TVs. One of its key features will be the recognition of UK regional accents. Amazon’s Alexa voice assistant amongst others have been criticised for its inability to understand regional UK accents.