Economy Mass Media

Pernod Ricard buys Vin & SpritICONIC is a much-overused adjective in branding, but it is a fitting description of Absolut, the Swedish vodka. The Absolut bottle, inspired by the medicine bottles sold in Stockholm pharmacies in the 18th and 19th centuries, is a design classic. Clever marketing campaigns have propelled the spirit from its southern Swedish home to leadership of the world?s premium vodka market. This is one of the fastest-growing segments of the industry, especially in America, the world?s biggest market for spirits, so its ownership is a prize well worth winning….
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French boards are chummy affairsON MARCH 28th some 3,000 guests were due to attend one of the most glittering events in the Parisian social calendar: the 117th annual gala ball of the Ecole Polytechnique, held in the opulent grand rooms of the Palais Garnier. Guests are greeted by an honour guard and an arch of swords. Polytechnicians wear dress uniforms with cocked hats as they dance quadrilles, watch ballet and drink champagne. A…
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TNK-BP falls foul of the law, againWHEN Dmitry Medvedev, Russia’s president-elect, gave a speech extolling the benefits of the rule of law earlier this month, some optimistic souls declared that things were looking up for business in Russia. Pessimists responded that Mr Medvedev would have neither the inclination nor the authority to reverse Vladimir Putin’s enthusiasm for meddling in the private sector’s affairs. The debate continues, but a series of setbacks for TNK-BP, Russia’s fourth-biggest oil producer, has given the pessimists lots of ammunition….
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The recent rise in corporate bankruptcies in America may well be a sign of much worse to comeCAPITALISM without bankruptcy, it is said, is like Christianity without hell. With recession looming, the air in America’s bankruptcy courts is thick with brimstone and the coals are being heated in readiness for the many sad souls whose sin was to borrow too much. After several heavenly years, in which bankruptcies fell to record lows, going bust is back. How bad will things get?…
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A curious fight over iron-ore pricesTROUBLE is brewing as the April 1st deadline approaches for the conclusion of the annual negotiations between China and its main foreign suppliers of iron ore. In February China’s largest steelmaker, Baosteel, struck a deal with Vale, a Brazilian mining giant. But negotiations have dragged on with the other two big suppliers, Rio Tinto and BHP Billiton, both of which have large operations in Australia. Things are now starting to get dirty….
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The industry is booming as quality and quantity improveBUSINESS is brisk at the Highfield Estate vineyard in Marlborough, with packed restaurant tables and a busy tasting station. This is normal for a weekend, says Naomi Galvin, the sales manager. The happy scene reflects the broader health of New Zealand’s wine industry, which had a bumper year in 2007. Wine overtook wool exports in value for the first time, and it is now the country’s 12th most valuable export, worth NZ$760m ($610m), up from NZ$94m in 1997. New Zealand Winegrowers (NZWG), a national trade body, boasts that the industry sold 1 billion glasses of wine in nearly 100 countries. Exports to Australia are buoyant, and New Zealand accounts for over 10% of wines sold in Britain for more than GBP5 ($10). Interest in America is picking up too, judging by a recent showcase held in Phoenix, Arizona. Across the board, demand exceeds supply….
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Japan loves baseball?but increasingly prefers the American sortAMERICA’S 2008 baseball season opened on March 25th when the Boston Red Sox beat the Oakland Athletics by six to five. But the game was played in Japan, not Massachusetts or California. And the real winner was America’s Major League Baseball (MLB), the sport’s governing body, which is taking the business of baseball global. In doing so, it is disrupting domestic baseball in Japan, where the game is the adopted national sport. …
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What the Indian conglomerate will do with two luxury-car brandsDEPENDING on which way you look at it, in acquiring Jaguar and Land Rover (JLR) from Ford for $2.3 billion, Tata Motors has either got itself two of the most famous brands in the car business at a bargain price?or a sea of troubles. In India there is both pride in Tata’s global ambition and a fair dose of scepticism. Tata Group, the parent of Tata Motors, may be India’s biggest industrial conglomerate, but there are concerns that it may have taken on more than it can manage. When the deal was first mooted, S. Ramnath of SSK Securities, a Mumbai stockbroker, feared that passion rather than logic was in the driving seat. Balaji Jayaraman of Morgan Stanley added that buying JLR was clearly ?value-destructive given the lack of synergies and the high-cost operations involved.? …
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The long boom turns to bustTHE road from Mildura to Merbein, in north-west Victoria, is a sad sight. Many of its farms are covered with wine grapes, dying on the vines. Farmers planted the vines hoping to cash in on the seemingly endless boom in Australian wine. As with the gold rush that gripped Victoria 150 years ago, the most unlikely types expected to make a fortune. But in 2007 the boom turned to bust, forcing many farmers to walk away from grapes and land they cannot sell….
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British Airways’ Willie Walsh loves his new terminal at Heathrow. But it will not solve all his problems WILLIE WALSH, the diminutive Irish boss of British Airways (BA), has been counting the minutes to this week’s opening of Terminal 5, the airline’s GBP4.3 billion ($8.5 billion) new terminal at Heathrow airport. In recent weeks his speeches and interviews have been littered with references to the number of days, hours and minutes left to go. T5 has not come a moment too soon. As the biggest tenant of Europe’s busiest and most congested airport hub, BA’s image has been tarnished by what Mr Walsh calls the ?Heathrow hassle??the horrible combination of endless security queues, delayed flights and lost baggage….
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As the credit crunch drags on, markets are driving a harder bargain with even sovereign borrowers in rich countries. The interest-rate spread between Germany’s government bonds and those of other euro-area countries has widened sharply. The shift is most marked for countries with shaky public finances: Italy’s public debt was 105% of its GDP last year; the ratio in Greece was 93%. Both countries are set to run budget deficits of 2-3% of GDP this year. But even Spain, which has low debt and a budget surplus, has been penalised. This suggests that solvency is not the markets’ main worry. Rather, investors are demanding a higher price for holding debt that trades in less liquid markets than Germany’s bonds do….
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More than 4,000 people died or went missing as a result of Cyclone Sidr, 2007’s biggest killer, which caused flooding in Bangladesh last November. Swiss Re, an insurance company, puts the (mostly uninsured) cost of destroyed homes, damaged crops and lost livestock at $2.3 billion. The insurer reckons the total economic cost of natural and man-made catastrophes was more than $70 billion; related claims on insurers totalled $28 billion. Kyrill, a winter storm that caused flooding in Western Europe, led to the largest insurance loss. The storm claimed 54 lives and cost insurers $6.1 billion. Floods in Britain during the summer claimed fewer lives than America’s storm season, but had a higher economic cost….
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A fund manager’s career has lessons for today’s investorsIF THE recent credit boom has taught us anything, it is that investors can be persuaded to forget about the risks when the returns look attractive. Sure enough, they are now paying the price.It is a lesson that Tony Dye, a fund manager who died on March 10th, understood only too well. In the late 1990s, he became widely known (and occasionally mocked) as the ?Dr Doom? of the financial markets. It is true that one rarely came away from a conversation with Mr Dye feeling more cheerful about life. On occasions, indeed, he could sound rather paranoid, as when he talked about the ?dark forces? that were propping up the stockmarket. ……
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Curbing food exports to feed hungry mouths is a recipe for trouble FROM a ?band of bakers? protesting in Washington, DC, to rioters setting buildings alight in Ouagadougou, Burkina Faso, pressure has risen on governments around the world to bring down food prices. In the past two weeks Cambodia, Indonesia, Kazakhstan, Russia, Argentina, Ukraine and Thailand have taken the easy option, restricting food exports in an attempt to shore up domestic supplies….
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Applications are invited for the 2008 Marjorie Deane internship. This award, financed by the Marjorie Deane Foundation, is designed to provide work experience for a promising journalist or would-be journalist, who will spend three months of the summer at The Economist, writing about economics and finance. Applicants may also be considered, if they wish, for an internship of similar duration at CFO Europe, a sister publication of The Economist. Applicants should send a letter introducing themselves, with an original article of no more than 650 words that they think would be suitable for publication in this section of The Economist. Applications should be sent by e-mail to deaneintern@economist.com or posted to the Business Affairs Editor (Deane internship), The Economist, 25 St James’s Street, London, SW1A 1HG. They must reach us by April 11th….
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In our story on foreign exchange (?The yen also rises?, March 22nd) we wrongly implied that foreign reserves are necessary to intervene to weaken a currency. This is nonsense: you simply print yen and buy dollars. ……
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The Galapagos Islands show the mixed blessings of greeneryTOURISM has a long history in the Galapagos Islands. An early visitor was Charles Darwin nearly 175 years ago, on a trip that inspired his theory of evolution by natural selection. A lot has changed over the years. Visitors are now central to the future of the isolated archipelago. Income is needed to raise standards of living and create incentives for local people to conserve the fragile natural environment. …
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Gains from immigration could be even greater than those from more tradeIN JUNE 1930 the Smoot-Hawley tariff act turned a stockmarket collapse into a crippling, decade-long Depression. Now, politicians seem to be preparing for protectionism even while financial meltdown is going on. Barack Obama and Hillary Clinton vie with each other to be nasty about the North American Free-Trade Agreement. Last year the European Union dropped the principle of ?free and undistorted competition? from its Lisbon treaty. …
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Under the right conditions, currency intervention can work. So is it time to support the dollar?THE dollar’s steep drop this year has triggered speculation that central banks may soon intervene in the foreign-exchange markets to prop up the sickly currency. It will surely be discussed, if sotto voce, at the next G7 meeting on April 11th. Policymakers have already embarked on verbal intervention. Jean-Claude Trichet, the president of the European Central Bank (ECB), has said he is ?concerned” by the euro’s climb against the dollar; European Union leaders at a summit in Brussels on March 14th said ?disorderly? currency moves are ?unwelcome?; and Fukushiro Nukaga, Japan’s finance minister, has called the dollar’s decline ?excessive?. Such talk has helped the greenback to rebound from a 12-year low of YEN96 and an all-time low of $1.59 to the euro on March 17th. But can policymakers put their money where their mouths are? …
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Saving the world, one utopian project at a timeIF GILBERT AND SULLIVAN were looking for the very model of a modern intellectual, they would surely pick Jeffrey Sachs. He is so ?right on? that when Time magazine featured him in its global list of people who influence the world, his profile was written by Bono, a rock singer. His job titles?director of the Earth Institute and special adviser to the United Nations Secretary-General on the Millennium Development Goals?seem almost tailor-made to get up the noses of conservatives….
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