The week’s news included; Lidl gets injunction to stop Tesco using Clubcard Price logo, Meta ends news access in Canada, Carlos Ghosn sues Nissan for $1bn, Boohoo to stage coup at Revolution Beauty.
Below are our top 10 stories that you need to know about. Be sure to check our twitter page, Facebook page and Instagram 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:
- City A.M. – Does raising interest rates actually bring down inflation?
- Retail Gazette – How Boots, Next, M&S and Clarks are targeting the future consumer
- BBC News – Why Spotify’s big bet on Meghan fell flat
- City A.M. – Fighting for low tax rates is so 2010, now the game is in offering the best incentives
1. LIDL GETS INJUNCTION TO STOP TESCO USING CLUBCARD LOGO
Lidl has secured an injunction to stop Tesco using its Clubcard Prices logo amid a trademark infringement dispute. In April a court found that Tesco had infringed on Lidl’s trademark. Tesco’s Clubcard Prices logo features a yellow circle on a blue background. The court found found Tesco had taken unfair advantage of Lidl’s distinctive design, specifically regarding low prices. Tesco had argued that payment of damages would be an adequate remedy. Lidl however, sought the removal of the Clubcard Price logo from Tesco stores altogether. Last week, a High Court ruled in favour of Lidl and granted an injunction requiring Tesco to remove the logo.
The removal of the Clubcard logo could cost Tesco up to £8 million. The injunction will not take effect until all appeals by Lidl and Tesco have been resolved. After such time, Tesco will have nine weeks to complete the removal, provided the injunction remains in place.
2. META ENDS AVAILABILITY OF NEWS ON FB & INSTAGRAM IN CANADA
Meta will halt the availability of news on its platforms to Canadian users following the approval of a controversial online news bill. Australian users have already faced similar restrictions as a law was introduced in 2011 akin to the bill passed by the Canadian government last week. In Australia, the government later made concessions and Facebook restored news access. Now, the Canadian Online News Act requires large online platforms to compensate news publishers for content shared on their platforms. Major players like Google and Meta must now agree commercial deals with news organisations to pay them for content shared by users. Instead of undertaking this task, Meta will end all news availability for Canadian users on Facebook and Instagram. Google also called the bill unworkable and is devising its own strategy.
3. FORMER NISSAN CEO SUES CARMAKER FOR $1BN
Carlos Ghosn, former CEO of Nissan has sued his old company for $1 billion. Ghosn accuses the carmaker along with 2 other companies and 12 individuals of defamation, libel and other crimes. Ghosn was accused of financial misconduct during his tenure. Nissan claimed he misreported his earnings and embezzled company money. Ghosn denied all allegations and claimed the accusations were unfounded. He was dismissed by Nissan and arrested in 2018. He then fled to Lebanon hidden in a music equipment box before his trial. Lebanon does not extradite its citizens so Ghosn remains in Lebanon till today. He is, however, listed on an Interpol Red Notice so cannot leave Lebanon.
4. BANK OF ENGLAND HIKES RATES TO 5%
The Bank of England has hiked interest rates to 5%, the highest rate since 2008. Inflation has been higher than expected, sitting at 8.7%. Persistently rising food costs and wage increases were driving inflation last month. The UK now has the highest inflation in the G7. The Bank’s primary lever to tackle inflation is to raise interest rates. This decision however, surprised economists as the Bank increased rates by 0.5%, instead of 0.25%. This increase will hammer home owners and in turn renters who are already facing rising costs. As the ratio of income to mortgage debt is at an all-time high, the debt burden for homeowners, in real terms, as the 15% interest rates seen in the 1990’s. There is concern that the Bank of England is driving the UK into recession.
5. BOOHOO TO LAUNCH COUP AT REVOLUTION
Boohoo is moving to stage a coup at Revolution Beauty. The fashion giant is seeking to remove Revolution’s CEO, CFO and Chair. Boohoo will vote against the incumbents’ reappointments and has selected replacements to propose at the Revolution AGM this week. Boohoo owns 26.6% of Revolution Beauty and is its largest shareholder. This follows its decision to increase its stake from 12.8% last November to exercise greater control over the beleaguered cosmetics company. In the past year, Revolution’s co-founders have stepped down and its shares were suspended after a financial scandal. An investigation found the company artificially inflated sales figures by £9 million and profits by £23 million. Furthermore, a probe found the company issued various undisclosed personal loans.
6. ITALY BLOCKS CHINESE PIRELLI TAKEOVER
Italian regulators have blocked a move for control of Pirelli by a Chinese government owned entity. The tyre maker’s largest shareholder, Sinochem, is owned by the Chinese government and sought to nominate a CEO. This would grant it greater control over the organisation. The Italian government has said Sinochem cannot nominate a CEO and any proposed changes to governance must be scrutinised by the regulators. Pirelli was told this was necessary to protect its independence. This comes amid rising tensions between China and the West. Pirelli was founded in 1872 and is worth €4.4 billion.
7. ZAMBIA RESTRUCTURES DEBT
Zambia has struck a deal to restructure its $6 billion debt. Over $4 billion of this debt is owed to China and key negotiations with China proved a sticking point. Zambia defaulted on its debt in 2020. The African nation is struggling to invest in critical infrastructure. This restructuring agreement gives Zambia a 20 year extension on repayments and a three-year interest only payment period. The deal grants Zambia important financial wriggle room to invest and improve their economic stability.
Despite holding 6% of the world’s reserves for copper, Zambia is one of the poorest nations on earth. In short, Zambia’s woes started in the 1980’s when metal prices sank and it struggled to pay its bills. The IMF offered to bail Zambia out in exchange for liberalisation of the economy. Now, foreign conglomerates own the precious mines, not the Zambian state, and these companies pay little to no tax.
We explain how Zambia ended up in severe debt and how China is slowly becoming a major lender and investor in our article.
8. UK GOVERNMENT TO ALLOW NEW COAL MINES
The UK government plans to allow the opening of new coal mines, blocking a proposed ban. In April, the House of Lords added a ban on the opening of new coal mines to the Energy Bill. Ministers however, argue that the ban could harm the UK’s energy security. Consequently, they are removing the addition before it reaches the voting stage in the House of Commons. Green Party leader Caroline Lucas claimed the removal of the ban was “reckless”. Interestingly, small community energy projects will also be banned from selling electricity directly to local consumers. This would include organisations that have solar panels and currently sell their energy to their locality. Given the focus on energy security, the decision to reduce the amount of renewable energy on the market, while opening new coal mines, seems counterintuitive to the government’s long term net-zero goals.
9. STRIKE ACTION
The RMT has announced three days of strikes in July as negotiations have stalled. Members across 14 rail companies are striking on the 20, 22 and 29 of July. Rail companies are unwilling to increase pay with further compromises on working conditions. The latest offer was a 5% pay rise for 2022, much lower than even the latest inflation rate. The 20,000 RMT members involved include station staff, platform guards and train managers.
Junior doctors will also be going on strike for five days from 13 July onwards. This will be the longest continuous strike action in the NHS’ history. The British Medical Association (BMA) is requesting a 26% pay rise, amounting to “full restoration” of pay. Junior doctors have seen their wages stagnate and cut in real terms by this amount. The government has offered just a 5% increase so far.
There is some good news for holidaymakers however, as Heathrow Airport security staff have called off strike action. Unite union members agreed to a pay rise of 15% to 17.5% (dependent on pay band). 2000 staff were due to strike for 29 days throughout summer.
10. PUB CLOSURES
Pubs in the UK are closing at a rapid rate with 620 shutting shop in the year to March 2023. This marks a huge 68% increase in closures compared to the previous year. This marks the fastest rate of closure in 10 years. Rising energy, wage and food costs have driven many pubs to collapse over the past year. Furthermore, increased interest rates have made debt repayments unsustainably expensive for many hospitality businesses.
0 shutting shop in the year to March 2023. This marks a huge 68% increase in closures compared to the previous year. This marks the fastest rate of closure in 10 years. Rising energy, wage and food costs have driven many pubs to collapse over the past year. Furthermore, increased interest rates have made debt repayments unsustainably expensive for many hospitality businesses.