The week’s news included; Mars buy Hotel Chocolat for £534m, Whistl sues Royal Mail for £600m, Advertisers pull adverts from X, Pepsi sued by New York over pollution.
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. – Let’s be honest, inflation is down and the Bank of England could create a recession
- BBC News – Why businesses are pulling billions in profits from China
- City A.M. – How the City is trying to bust the ‘myth’ of New York valuations
- CNBC – Why oil majors Shell and BP are combining solar energy and agricultural production
1. MARS BUYS HOTEL CHOCOLAT
Mars is buying rival chocolate maker Hotel Chocolat for £534 million. Hotel Chocolat is a UK based firm with 124 domestic stores and a few international outlets. Despite this, its five US stores shuttered in the US last year, costing £3.5 million. Co-founder Angus Thirlwell will remain CEO after the takeover. Thirwell and fellow co-founder Peter Harris will receive £144 million from the sale due to their respective 27% stakes. US giant Mars has said there are no plans to change Hotel Chocolat’s recipes and aims to “nurture and protect” the brand.
2. ROYAL MAIL LEGAL BATTLE WITH WHISTL
Royal Mail and Whistl are preparing for a court battle which could cost Royal Mail £600 million in damages. Whistl accuses Royal Mail of anti-competitive behaviour which resulted in 2,000 job losses at the company. Royal Mail allegedly used their monopoly position to force price hikes at Whistl in 2014 when it attempted to launch its independent postal service. This service would have covered 42% of British homes. Royal Mail would then also be paid by Whistl to deliver Whistl orders to the rest of the country. Royal Mail swiftly hiked its prices for third-party deliveries. This ultimately made Whistl’s service unviable leading to 2000 job cuts and suspension of the service. Royal Mail was fined £50 million by Ofcom over this issue and now, Whistl is suing for £600 million. Whistl was previously called TNT UK but changed its name in late 2014.
3. ADVERTISERS PULL ADS FROM X
A range of major US companies have pulled their adverts from X (formerly Twitter) over concerns Elon Musk endorsed an antisemitic conspiracy theory. Musk agreed with the post about the “Great Replacement” theory that claims the left and Jewish people are attempting to replace white people with non-white immigrants. Disney, Comcast, Warner Bros, Lions Gate Entertainment, Paramount Global, and even Apple have all been reported to have pulled ads in the past week. US media watchdog Media Matters released a report showing some ads had allegedly been placed next to “pro-Nazi content”. IBM subsequently pulled its ads. Musk responded and said he will launch a “thermonuclear lawsuit” against Media Matters.
4. EU COUNTRIES AGREE AI REGULATION
France, Germany and Italy have reportedly agreed how artificial intelligence should be regulated. The trio have agreed to support new rules for AI providers in the EU. The EU has proposed that the tabled code of conduct for AI providers should be binding for large companies. France, Germany and Italy however, say this gives smaller players an unfair advantage. Germany says that the government should not regulate AI, but rather its application. The three countries also believe that no sanctions should be imposed for violations when the code of conduct is first introduce. In the future however, repeat offenders may face sanctions. A lot more work is being done to create an EU AI regulation framework but with discussions like this taking place, we could see a rollout much sooner than expected.
5. PEPSI SUED BY NEW YORK
The US state of New York has sued PepsiCo for polluting the Buffalo River. New York claims Pepsi plastics are the largest contributor to the pollution of the river. Water is now contaminated and local wildlife is facing the impact. Pepsi is accused of breaking New York law by failing to warn the public about the risk of plastic packaging. PepsiCo makes Pepsi, Doritos, 7UP, Gatorade and Quaker Oats among their 85 drink and 25 snack brands. Most of their products are sold in single-use plastics, causing substantial pollution in the state. See the filing here.
6. AVON OPENS PHYSICAL STORE
Cosmetics brand Avon is to open its first physical UK store. Avon is well-known for its multilevel marketing strategy where individual sales reps predominantly sell to their local communities. The strategy has worked exceptionally well as the company has been running since 1884. It is hoped that a physical store will help improve the customer experience and offer something fresh to regular and potential users. Outlets are also set to open in Brazil and South Africa. This follows the success of its stores in Turkey. Avon has sought new methods of bringing in customers as its traditional door-to-door sales methods were hampered during the pandemic. The company has shifted more towards online sales but it recognises there is still work to be done. Avon posted $2.77 billion in revenue in 2022. This is well beneath highs enjoyed in 2011 when the company turned over $9.23 billion.
7. COMMERZBANK GETS CRYPTO LICENSE
Commerzbank has received approval in Germany to provide cryptocurrency custody services. The banking giant will offer custody services for Bitcoin and Ethereum. It will soon look to expand to provide a wider range of digital asset services. Commerzbank is Germany’s fourth-largest bank and has over €500 billion in assets. The bank made a profit after tax of €684 million. This illustrates that despite a decline in mainstream coverage, cryptocurrencies still maintain a significant interest for financial institutions.
8. THAMES WATER FACES PENALTY
Thames Water has been hit with a £73 million penalty for polluting UK waters while 11 of the other 16 UK water firms face similar penalties. £73.7 million must be paid back to customers by Thames Water as it missed Ofwat targets for pollution, leakage and supply interruptions. The other 11 firms will collectively return roughly £120 million to customers. Thames Water was by far the largest offender as Anglian Water is being forced to pay back just £27.1 million. The sums will be paid back via lower water bills for customers throughout 2024 and 2025. This comes amid Thames Water’s plans to turn around its fortune as it buckles under its £14 billion debt pile.
9. THREADS TO ALLOW USERS TO DELETE WITHOUT LOSING INSTA
Meta’s Threads is set to allow users to delete their accounts without losing Instagram. This has been a frustration for many users who sought to try Threads but decided it wasn’t for them. Threads boasted 100 million users within just five days after its launch in July. Since then, user numbers have waned. It currently has 100 million monthly users. Threads offered a similar service to X (formerly Twitter). Meta CEO Mark Zuckerberg hoped that Threads could meaningfully challenge X but it hasn’t gained the same traction despite the linkage to Instagram. Instagram has over 2.35 billion monthly users, so the adoption rate has been very low. Meta could soon add new features to Threads such as hashtags and DMs. X currently has 550 million monthly users.
10. AMIGO LOANS RESCUE DEAL FAILS
A potential rescue deal for Amigo Loans has fallen through. The payday lending provider suspended its shares from trading as it faces liquidation. The company was hoping an investment firm could buy Amigo assets and provide some cash to shareholders. Amigo is currently winding down its operations but current shareholders are set to lose out. Amigo Loans was founded in 2005 and rose to prominence after the 2008 financial crisis. In 2018, Amigo went public with a valuation of £1.3 billion. It offers fast money but at very high interest rates. It was recently found to have mis-sold loans to customers. The UK FCA reprimanded the company but Amigo avoided a fine because it was already on the brink of collapse.