May 1998 Edition
HEALTH FOODS
Stores selling health foods are getting stronger in the retail marketplace. The funny-smelling shops that sell herbs and root extracts have grown into one-stop shopping emporiums that carry a full selection of organic foods, nutritional supplements and environmentally friendly items. A study by the U.S.-based Food Marketing Institute showed sales of organic products growing at double-digit rates.
VEHICLES
The average amount consumers paid for new vehicles in Canada has been rising faster than average household income. From 1992 to 1996, the latest year for which average household income estimates are available, average household income in current dollars increased 5.2%, from $46,465 to $48,875. During the same period, consumers paid 34.1% more for new vehicles, up from $18,410 in 1992 to $24,694 in 1996.
CARTELS
The world's major industrial countries have decided it's time to crack down on cartels. The OECD has agreed to beef up national legislation and institutions designed to break cartels, share information among themselves to track international cartels and prosecute suspected cartel members. The OECD definition of a cartel is a conspiracy among competitors to fix prices, rig bids, establish output restrictions or quotas and to share and divide markets by allocating customers, suppliers, territories or lines of commerce. Recent fines for cartel activity included manufacturers of citric acid, graphic electrodes, explosives, bread and companies in the marine industry.
SMALL-MARTS
As it approaches the saturation point for existing store concepts, Wal-Mart is about to open much smaller stores that could compete with convenience stores and supermarkets. If successful, the format could open the way for Wal-Mart to open stores in markets with populations too small to support a larger store, or in metropolitan areas where big developments are curbed by planning restrictions or lack of space. Wal-Mart has 1,900 discount stores selling general merchandise, 440 supercentres that sell groceries and fresh produce and 440 Sam's Club warehouse stores.
IMAGE
Focus groups have told the Disney Corporation that Mickey Mouse and his colleagues lack "attitude." According to Disney, the characters were born in the Great Depression and were imbued with a simple optimistic outlook. In a series of 60 new stories, Mickey will be reintroduced as a mouse for the nineties but one also baffled by the rise of feminism and advanced technology. Minnie Mouse, formerly a homebody, will become a career woman--the conductor of an orchestra. Goofy will swap his bicycle for a snowboard.
2000
A new $50 million loan program aimed at helping small businesses cope with the Year 2000 computer problem is now available from the Business Development Bank. The program includes flexible payments, such as the possibility of no principal payments until the year 2000. The venture capital lender is also offering services to entrepreneurs to evaluate their 2000 vulnerability. The bank has come up with a questionnaire to help owners determine their readiness and is offering expert advice through its toll-free number 1-888-INFO-BDC.
EXCHANGE
Asia's credit crunch is sending it back to the age of barter. With national and corporate coffers from South Korea to Indonesia depleted of foreign exchange, companies looking to sell their goods in Asia are being offered everything from tea to textiles instead of cash. Southeast Asian leaders are calling for regional trading programs that avoid the U.S. dollar, or any other currency. A group of Australian cattlemen is negotiating beef on the hoof for Indonesian cement and beer. A Malaysian concern is exchanging rice for Philippine corn. No-cash deals are expected to increase by 20 per cent as companies try to keep commerce moving.
INFORMATION TECHNOLOGY
Two recent studies indicate that companies continue to throw money at information technology projects they can't manage and usually generate no increase in profit. Last year, North American companies spent $800 billion on IT, but only a third of that investment improved profitability. Despite these results, the companies will increase spending to $1.4 trillion by 2002. Over 500 of North America's 3,000 biggest companies were surveyed. A study of 1,450 Canadian companies paints a picture of out-of-control spending; three-quarters of them missing IT deadlines by a wide margin and more than half greatly exceeding their budgets.
EXPORTS
According to the World Trade Organization, the U.S. remains by a large margin the world's biggest exporter. In 1997 it sold merchandise worth $689 billion to foreigners, or 12.6 per cent of the global total. Germany accounted for 9.4 per cent of worldwide exports and Japan 7.7 per cent. China has moved up to tenth position with 3.3 per cent.
ENTERTAINMENT
Although young adults often get the credit for being the economic force behind the entertainment industry, the biggest spenders are middle-aged Americans, according to The Boomer Report. In 1995, householders aged 35 to 54 controlled 51 per cent of all spending on entertainment.
MERGERS
Canadian firms do a better job of executing takeovers than their U.S. counterparts. 62 per cent of Canadian takeovers are successful, compared with 46 per cent of U.S. mergers and acquisitions. A recent study, limited to publicly traded buyers, looked at 184 Canadian deals each worth more than $100 million and 250 U.S. deals each worth more than $1 billion. Total return to shareholders was tracked for three years after the deal and purchasers that out performed their industry were judged a success. The study speculates that the Canadian success rate arises from lessons learned in earlier failures with U.S. acquisitions. Last year's U.S. mergers were worth a record $1 trillion and $101 billion for Canadian deals.
TRADE
World merchandise trade grew in volume by 9.5% in 1997, the second highest rate in more than 20 years, largely thanks to strong trade growth in North and South America. Despite Asia's problems, world output grew by 3%, the best rate in eight years.
MAQUILADORAS
According to the Mexican government, 42 new maquiladora manufacturing plants opened in January generating 7,306 jobs. Maquiladoras are manufacturing operations that import component parts duty free and assemble them for export. This brings the number of workers employed in maquiladoras to 988,667.
WINE
A Melbourne wine merchant has discovered fake bottles of a premium Australian wine, 1990 Penfolds Grange, a vintage whose price has soared to around US$332 a bottle since America's Wine Spectator named it wine of the year in 1995. One clue on the fraudulent label: "pour" was spelt "poor."
FAST-FOOD
According to Euromonitor, a market research company, the U.S leads the world with 25 burger outlets and 11 pizza parlours for every 100,000 people. Japan is far behind with five burger and two pizza restaurants with Britain at its heels. The fastest growth is in European countries such as France, Germany, Spain and Italy which have less than two burger outlets per 100,000, but where numbers have doubled in the last five years. As of 1996, Canada had roughly 21 pizza and 14 burger restaurants for every 100,000 people.
TARIFFS
China has offered to reduce further its tariffs on imported goods to boost its chances to join the World Trade Organization. The country is ready to remove more barriers to foreign investment as long as it's allowed to implement tariff cuts and other concessions over a period of time.
TRAINING
According to a Statistics Canada report, Canadians are hungry for training. One in three workers say they want more training for career or job-related reasons. That is higher than the rate for other countries involved in the study which included: the U.S., Switzerland, the Netherlands, Germany and Sweden. Canadian workers receive an average of 44 hours of training a year. The Netherlands was at the high end with 72 hours a year.
STRESS
Reducing animal alarm and aggression is important as it is costly commercially. Experiments in Scotland indicate that television and video images may help battery hens get over their anxieties. At the Roslin Institute, they showed hens and chicks screensaver-type moving images for 10 minutes each day. Within three days the fowl were hooked, running over to the TV as soon as it was turned on. The most popular images so far are fish and flying toasters.
SEEDS
The U.S. Department of Agriculture and a U.S. seed company have been granted a patent for a technique that can prevent seeds from germinating when replanted. So far it has only been used on cotton and tobacco seeds but some scientists believe that within a few years crucial crops like wheat, rice and soy beans--staples for three-quarters of the world's poor--may be under the control of international agribusiness.
CELLULARS
Revenues from cellular phone services in Canada grew from $118 million to $2.4 billion between 1987 and 1996, a compounded annual growth rate of 40 per cent. In the same period, the number of subscribers grew from 98,300 to 3.4 million. The average monthly revenue per subscriber has declined steadily from $116 to about $70 in 1996. Since 1988, the number of full-time employees in cellular telephone services has almost tripled from 2,465 persons to 7,075.
QUIET
The South Pacific is the quietest part of the world's oceans at 65 decibels. The North Atlantic whaling areas are about as noisy as a New York intersection (100 decibels). A shoal of shrimp can put out 80 decibels and an offshore oil rig is good for 180 decibels.
ELEVATORS
In Canada, the U.S., Guam and the Caribbean islands, there are 105,000 Otis elevators. When people in these elevators press the help button, the phone rings in a second- floor office in Connecticut where 850 to 950 calls are received a week on the Otisline.
BLADES
Gillette recently unveiled the Mach3, the long-awaited $5.00, three-bladed, spring-loaded successor to the highly successful but merely two-bladed SensorExcel. Development will have cost not far off $1 billion by the time the razor hits the shelves in a few months.
ANNIVERSARY
This year marks the 50th anniversary of the world's multilateral trading system. Previously known as the General Agreement on Tariffs & Trade, it is now called the World Trade Organization. Industrial tariffs have dropped over the 50 years to an average of just under 4 per cent from 40 per cent, helping to boost world economic growth and living standards. In 1950, trade as a proportion of world gross domestic product was just 7 per cent, it is now 23 per cent. Since 1950, world merchandise trade has risen 14 times.
WORTH
Used-car dealer Tom Hartley, 14, has become Britain's youngest millionaire. He says: "I am no different from any other 14-year-old except that I buy and sell cars."
Thank you for reading the A & A Economic News Digest. For more information visit our website www.aacb.com or contact A & A Contract Customs Brokers Ltd. at strehler@aacb.com.
Past issues of the A&A Economic News Digest can be found at http://www.aacb.com/publications/ed/index.asp
Stores selling health foods are getting stronger in the retail marketplace. The funny-smelling shops that sell herbs and root extracts have grown into one-stop shopping emporiums that carry a full selection of organic foods, nutritional supplements and environmentally friendly items. A study by the U.S.-based Food Marketing Institute showed sales of organic products growing at double-digit rates.
VEHICLES
The average amount consumers paid for new vehicles in Canada has been rising faster than average household income. From 1992 to 1996, the latest year for which average household income estimates are available, average household income in current dollars increased 5.2%, from $46,465 to $48,875. During the same period, consumers paid 34.1% more for new vehicles, up from $18,410 in 1992 to $24,694 in 1996.
CARTELS
The world's major industrial countries have decided it's time to crack down on cartels. The OECD has agreed to beef up national legislation and institutions designed to break cartels, share information among themselves to track international cartels and prosecute suspected cartel members. The OECD definition of a cartel is a conspiracy among competitors to fix prices, rig bids, establish output restrictions or quotas and to share and divide markets by allocating customers, suppliers, territories or lines of commerce. Recent fines for cartel activity included manufacturers of citric acid, graphic electrodes, explosives, bread and companies in the marine industry.
SMALL-MARTS
As it approaches the saturation point for existing store concepts, Wal-Mart is about to open much smaller stores that could compete with convenience stores and supermarkets. If successful, the format could open the way for Wal-Mart to open stores in markets with populations too small to support a larger store, or in metropolitan areas where big developments are curbed by planning restrictions or lack of space. Wal-Mart has 1,900 discount stores selling general merchandise, 440 supercentres that sell groceries and fresh produce and 440 Sam's Club warehouse stores.
IMAGE
Focus groups have told the Disney Corporation that Mickey Mouse and his colleagues lack "attitude." According to Disney, the characters were born in the Great Depression and were imbued with a simple optimistic outlook. In a series of 60 new stories, Mickey will be reintroduced as a mouse for the nineties but one also baffled by the rise of feminism and advanced technology. Minnie Mouse, formerly a homebody, will become a career woman--the conductor of an orchestra. Goofy will swap his bicycle for a snowboard.
2000
A new $50 million loan program aimed at helping small businesses cope with the Year 2000 computer problem is now available from the Business Development Bank. The program includes flexible payments, such as the possibility of no principal payments until the year 2000. The venture capital lender is also offering services to entrepreneurs to evaluate their 2000 vulnerability. The bank has come up with a questionnaire to help owners determine their readiness and is offering expert advice through its toll-free number 1-888-INFO-BDC.
EXCHANGE
Asia's credit crunch is sending it back to the age of barter. With national and corporate coffers from South Korea to Indonesia depleted of foreign exchange, companies looking to sell their goods in Asia are being offered everything from tea to textiles instead of cash. Southeast Asian leaders are calling for regional trading programs that avoid the U.S. dollar, or any other currency. A group of Australian cattlemen is negotiating beef on the hoof for Indonesian cement and beer. A Malaysian concern is exchanging rice for Philippine corn. No-cash deals are expected to increase by 20 per cent as companies try to keep commerce moving.
INFORMATION TECHNOLOGY
Two recent studies indicate that companies continue to throw money at information technology projects they can't manage and usually generate no increase in profit. Last year, North American companies spent $800 billion on IT, but only a third of that investment improved profitability. Despite these results, the companies will increase spending to $1.4 trillion by 2002. Over 500 of North America's 3,000 biggest companies were surveyed. A study of 1,450 Canadian companies paints a picture of out-of-control spending; three-quarters of them missing IT deadlines by a wide margin and more than half greatly exceeding their budgets.
EXPORTS
According to the World Trade Organization, the U.S. remains by a large margin the world's biggest exporter. In 1997 it sold merchandise worth $689 billion to foreigners, or 12.6 per cent of the global total. Germany accounted for 9.4 per cent of worldwide exports and Japan 7.7 per cent. China has moved up to tenth position with 3.3 per cent.
ENTERTAINMENT
Although young adults often get the credit for being the economic force behind the entertainment industry, the biggest spenders are middle-aged Americans, according to The Boomer Report. In 1995, householders aged 35 to 54 controlled 51 per cent of all spending on entertainment.
MERGERS
Canadian firms do a better job of executing takeovers than their U.S. counterparts. 62 per cent of Canadian takeovers are successful, compared with 46 per cent of U.S. mergers and acquisitions. A recent study, limited to publicly traded buyers, looked at 184 Canadian deals each worth more than $100 million and 250 U.S. deals each worth more than $1 billion. Total return to shareholders was tracked for three years after the deal and purchasers that out performed their industry were judged a success. The study speculates that the Canadian success rate arises from lessons learned in earlier failures with U.S. acquisitions. Last year's U.S. mergers were worth a record $1 trillion and $101 billion for Canadian deals.
TRADE
World merchandise trade grew in volume by 9.5% in 1997, the second highest rate in more than 20 years, largely thanks to strong trade growth in North and South America. Despite Asia's problems, world output grew by 3%, the best rate in eight years.
MAQUILADORAS
According to the Mexican government, 42 new maquiladora manufacturing plants opened in January generating 7,306 jobs. Maquiladoras are manufacturing operations that import component parts duty free and assemble them for export. This brings the number of workers employed in maquiladoras to 988,667.
WINE
A Melbourne wine merchant has discovered fake bottles of a premium Australian wine, 1990 Penfolds Grange, a vintage whose price has soared to around US$332 a bottle since America's Wine Spectator named it wine of the year in 1995. One clue on the fraudulent label: "pour" was spelt "poor."
FAST-FOOD
According to Euromonitor, a market research company, the U.S leads the world with 25 burger outlets and 11 pizza parlours for every 100,000 people. Japan is far behind with five burger and two pizza restaurants with Britain at its heels. The fastest growth is in European countries such as France, Germany, Spain and Italy which have less than two burger outlets per 100,000, but where numbers have doubled in the last five years. As of 1996, Canada had roughly 21 pizza and 14 burger restaurants for every 100,000 people.
TARIFFS
China has offered to reduce further its tariffs on imported goods to boost its chances to join the World Trade Organization. The country is ready to remove more barriers to foreign investment as long as it's allowed to implement tariff cuts and other concessions over a period of time.
TRAINING
According to a Statistics Canada report, Canadians are hungry for training. One in three workers say they want more training for career or job-related reasons. That is higher than the rate for other countries involved in the study which included: the U.S., Switzerland, the Netherlands, Germany and Sweden. Canadian workers receive an average of 44 hours of training a year. The Netherlands was at the high end with 72 hours a year.
STRESS
Reducing animal alarm and aggression is important as it is costly commercially. Experiments in Scotland indicate that television and video images may help battery hens get over their anxieties. At the Roslin Institute, they showed hens and chicks screensaver-type moving images for 10 minutes each day. Within three days the fowl were hooked, running over to the TV as soon as it was turned on. The most popular images so far are fish and flying toasters.
SEEDS
The U.S. Department of Agriculture and a U.S. seed company have been granted a patent for a technique that can prevent seeds from germinating when replanted. So far it has only been used on cotton and tobacco seeds but some scientists believe that within a few years crucial crops like wheat, rice and soy beans--staples for three-quarters of the world's poor--may be under the control of international agribusiness.
CELLULARS
Revenues from cellular phone services in Canada grew from $118 million to $2.4 billion between 1987 and 1996, a compounded annual growth rate of 40 per cent. In the same period, the number of subscribers grew from 98,300 to 3.4 million. The average monthly revenue per subscriber has declined steadily from $116 to about $70 in 1996. Since 1988, the number of full-time employees in cellular telephone services has almost tripled from 2,465 persons to 7,075.
QUIET
The South Pacific is the quietest part of the world's oceans at 65 decibels. The North Atlantic whaling areas are about as noisy as a New York intersection (100 decibels). A shoal of shrimp can put out 80 decibels and an offshore oil rig is good for 180 decibels.
ELEVATORS
In Canada, the U.S., Guam and the Caribbean islands, there are 105,000 Otis elevators. When people in these elevators press the help button, the phone rings in a second- floor office in Connecticut where 850 to 950 calls are received a week on the Otisline.
BLADES
Gillette recently unveiled the Mach3, the long-awaited $5.00, three-bladed, spring-loaded successor to the highly successful but merely two-bladed SensorExcel. Development will have cost not far off $1 billion by the time the razor hits the shelves in a few months.
ANNIVERSARY
This year marks the 50th anniversary of the world's multilateral trading system. Previously known as the General Agreement on Tariffs & Trade, it is now called the World Trade Organization. Industrial tariffs have dropped over the 50 years to an average of just under 4 per cent from 40 per cent, helping to boost world economic growth and living standards. In 1950, trade as a proportion of world gross domestic product was just 7 per cent, it is now 23 per cent. Since 1950, world merchandise trade has risen 14 times.
WORTH
Used-car dealer Tom Hartley, 14, has become Britain's youngest millionaire. He says: "I am no different from any other 14-year-old except that I buy and sell cars."
Thank you for reading the A & A Economic News Digest. For more information visit our website www.aacb.com or contact A & A Contract Customs Brokers Ltd. at strehler@aacb.com.
Past issues of the A&A Economic News Digest can be found at http://www.aacb.com/publications/ed/index.asp
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