February 2010 Edition
WINE
Australian wineries are bulldozing and selling vineyards in a desperate attempt to clear cellars choked with more than 100-million wine cases in the worst glut in two decades. If the industry fails to uproot 20 per cent of vines at least 200-million more cases will pile up over the next two years. The glut is pitting Australia's smaller wineries against the nation's giants. Twelve of Australia's oldest wine-making families have banded together to fight a discount binge and preserve the value of their product.
KETCHUP
Mexicans eat more ketchup by sales value than consumers in all but eight other countries. At the start of 2007, ketchup giant H.J. Heinz held less than one per cent of the Mexican market and had only 10 sales people in the country which is three times as large as Texas. Today, Heinz accounts for 12 per cent of the market and now has 120 ketchup sales and marketing employees there. The shift illustrates how Heintz is positioning itself for growth in emerging markets. The market leader in Mexico is Del Monte Foods Co. which claims about 30 per cent of the market.
TRADE
Leaders from five East African nations have signed a common market treaty. Kenya, Tanzania, Rwanda, Uganda and Burundi have agreed to the free movement of people and goods across the region and it is expected that the deal will lead to greater economic clout for the region.
BABIES
A baby bottle called the Yoomi that heats milk to a perfect temperature at the touch of a button has gone on sale in the UK. The bottle, which has already won a series of innovation and research awards, ensures the milk is heated to between 32 and 34 degrees in just 60 seconds and stays warm for up to an hour. It can be recharged up to 100 times and even features an anti-colic teat which allows a baby to latch on more easily. It was invented by a husband and wife team who were tired of having to painstakingly heat milk to an exact temperature in the microwave.
R&D
Toyota spent most on research and development (R&D) of any company in the world in 2008. The company spent US$10.6-billion, knocking Microsoft off the top spot. Three of the biggest spenders are car makers, but pharmaceutical and biotechnology companies also pour money into R&D. Switzerland's Roche now ranks fourth having increased spending by 50 per cent in the past three years. Worldwide, R&D investment increased by 6.9 per cent in 2008. It grew by 9 per cent in 2007.
FISHING
After years of decline, freshwater sports fishing is on the rebound in British Columbia, according to a new study that found more than 300,000 anglers are spending more than C$500-million a year on the activity. Annually, sports fishermen spend seven times more on equipment than downhill skiers and inject more into the economy than cruise ship passengers. It is estimated that by 2017 there will be 416,700 sports anglers, marking a return to the level of participation not seen since the 1990s.
WEATHER
From a devastating food crisis in Guatemala to water cuts in Venezuela, El Nino compounded drought damage across Latin America in 2009. Ecuador saw its worst drought in 40 years and Bolivian farmers went eight months without rain. El Nino is the occasional seasonal warming of central and eastern Pacific waters that upsets normal weather patterns across the globe and occurs on average every two to five years. Typically lasting around 12 months, El Nino reappeared again last June.
SIZE
The skinniest house in Britain is only 66 inches wide but has gone on the market for over one million dollars. The house, in Shepherds Bush, London, has five levels, a lower ground, ground, first, second and third floor with 1000 square feet of space.
COUNTERFEIT
According to U.S. Customs, China remains the top country of origin for counterfeit and pirated goods. In fiscal 2009, 14,841 seizures were made with a domestic value of US$261-million. 89 per cent of the goods were made in China, and Hong Kong was the source for 10 per cent followed by India. Footwear remains the leading product seized accounting for 38 per cent of seized goods. Other commonly counterfeit and pirated goods are consumer electronics, computers/hardware, pharmaceuticals and wearing apparel.
NOISE
MP3 players, including iPods, will be fitted with maximum volume restrictions to protect users' hearing under new European Union plans. It is claimed that there are up to 10 million Europeans, mainly young people, who are at risk of losing their hearing permanently in the next five years due to their listening habits. Units on the market at the moment are capable of generating a volume beyond 116 decibels. Under health and safety regulations, workers are not allowed to be exposed to that level of volume for more than 30 seconds.
INDIA
Heineken has reached an agreement with India-based United Breweries that allows the Dutch company to brew and sell its own brand of beer in that lucrative, growing market at a time when beer consumption is flat or even declining in its core markets of Western Europe and the U.S. India's beer market is expected to reach 14.4-million hectolitres in 2010. Beer consumption is 1.3 litres per year, much lower than the annual per capita consumption of 79 litres in the Netherlands and 82 litres in the U.S.
AUTOS
For the first time, China has overtaken the United States as the world's biggest market for automobiles. Now that the Chinese buy more cars and trucks, the shift could produce ripples for the environment, gas prices and even the kinds of cars auto makers design. More than 12.7-million cars and trucks were sold in China in 2009, up 44 per cent from the previous year. Because of the size of China's population this trend has been expected but the increase in sales is happening much quicker than originally forecast because of China's tax cuts, its stimulus programme and the depressed U.S. market.
SWEETENERS
The artificial sweeteners saccharin and aspartame were found accidentally when lab workers doing research that had nothing to do with sweetening put a bit of the test compounds in their mouths and liked what they tasted. The scientists who discovered sucralose (now sold as Splenda) were originally trying to create an insecticide. A compound called lugduname is the sweetest compound known, more than 200,000 times as sweet as table sugar.
AIRLINES
After a difficult year battling the recession, the airline industry appears to be headed toward a recovery as fuller planes, fewer discounted fares, lower fuel prices and revenue from a variety of formally free services start to pay off. The signs of improvement are most advanced at low-fare carriers that focus on domestic flights. U.S. airlines have removed one out of every 10 seats flying between January 2008 and the schedules filed for 2010. The drop in domestic seats is the largest since 1942 and takes capacity back to 1998 levels.
GAS
Australia has signed a US$82-billion deal to supply liquefied natural gas (LNG) to a Japanese power company in what is believed to be the country's biggest export sales contract. The deal will see 4.1-million tonnes of LNG sent to Japan each year. The company selling the LNG has an annual capacity of 16.3-million tonnes. The gas is liquefied for shipping abroad where it is turned back into gas and distributed via a pipeline.
PATENTS
European ministers have agreed on a plan to introduce a common EU-wide patent system and a single European Patent Court that could save companies millions of euros. The Commission says the cut in legal fees could save European firms up to 289-million euros annually. Many firms currently face high costs in the EU for patent litigation. Currently, getting approval for a patent in just 13 EU member states is 11 times more expensive than obtaining a U.S.patent.
TRENDS
A U.S.-based market research company has released its consumer packaged trend predictions for 2010 and identified six key flavour trends that will emerge during the year. They include: Cardomom; Sweet Potato; Hibiscus; Cupuacu (a fruit from the Amazon); Rose water and Latin Spices.
GRANTS
The World Bank is to give India at least US$1-billion over five years for a Ganges River cleanup, part of a commitment to sharply boost lending to the country. The cleanup of the holy river, polluted by industrial chemicals, pesticides and other sewage, involves building sewage treatment plants, revamping drains and other initiatives. The Bank is expected to triple lending to India this year to $7-billion for various projects. India plans to raise $3.4-billion selling shares in three state-run utilities and use the money to build roads and ports.
ENERGY
The UK government wants to have 47 smart electricity meters installed in 26 million homes by 2020 to help people cut their energy usage. This will cost between US$10- and $12-billion, or around $650 per household. Savings per household are estimated to be around $55.00 annually and will require 12 years to recoup the original installation costs. So far, it has not been decided who will pay for the installation of the meters.
CATALOGUES
Last year, an estimated 17-billion catalogues were sent to U.S. households, which is about 56 for every man, woman and child.
SHAPEWEAR
Underwear makers are finding the desire for a svelte silhouette has created a booming line for women, and now men, in shapewear. These are garments that help slim and sculpt a figure by holding it in, and has become the fastest-growing category in intimate apparel for women, with lines available in most major stores, but it is also now taking off for men. Market researchers estimate that the market has tripled in the past few years to be worth US$750-million in annual sales.
VACATION
When it comes to time off, Canadians receive among the least-generous entitlements in the world. At 31 days a year of paid leave, Canada ranked third-last in a survey of 19 countries. Only Australia and the U.S. were lower with 30 and 28 days respectively. Top of the list was Japan with 44 days a year followed by Brazil and Lithuania with 41 days and Russia, France and Finland with 40 days off each year. Figures are based on typical vacation days or paid time-off for someone with ten years of service including all statutory and public holidays.
GUARANTEES
The Economist reports that shoppers typically pay 10 to 50 per cent of the cost of a product to insure it beyond the term covered by the manufacturer's guarantee. The terms of these deals vary but they usually promise to repair or replace a faulty device for between one and four years. Yet products rarely break within the period covered and repairs tend to cost no more than the warranty itself. This makes warranties amazingly profitable generating over US$16-billion annually for U.S. retailers.
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
Posts
