August 2012 Edition
PHONES
The
trend away from land lines in Canada is gaining traction as wireless
plans decline in price because of increased competition among mobile
service providers. It is estimated that 8.8 per cent of households were
wireless-only in 2008 rising to 14.8 per cent at the end of 2011. The
figure should reach 18.1 per cent by the end of this year and 21.6 per
cent by the end of 2013. Younger Canadians are the most likely to go
wireless-only.
FOOTBALL
One
of the largest advertisers in the world has made a significant statement
as to where they believe they get most value for their advertising
dollars. General Motors Co. has announced that it will pull millions of
dollars out of the Super Bowl and that Chevrolet has struck a 5-year
deal to be the automotive partner with the world's most popular soccer
club, Manchester United. 400-million people consider themselves fans of
the NFL, but more than eight times as many, 3.5-billion, or half the
world's population, are fans of soccer, and 660-million are fans of
Manchester United.
TOURISM
British
Columbia went big in San Francisco recently when it put a vending
machine in a public square as part of Tourism B.C.'s campaign to woo
U.S. travellers. People who punched in codes to see more were rewarded. A
person inside pushed presents out through a large slot that included
guide books, a mountain bike and even a surfboard. All came with
discount cards to fly with Air Canada to B.C. All this is part of a
plan to fight a downward trend that has seen foreign visits drop since
2001.
DRINKS
The mayor of
New York wants to restrict sales of large sized sugary drinks in public
venues. The move would outlaw sales of drinks 473 ml (16 oz) and over in
restaurants, cinemas, stadiums and arenas. Cups over that size at
self-service fountains would also disappear. The ban would apply to any
drink that contains more than 25 calories per 235 ml (8 ounces) and less
than 51 per cent milk or milk substitute by volume as an ingredient,
which means that milk shakes would be given a reprieve.
DRUGS
A
third of malaria drugs used around the world to stem the spread of the
disease are counterfeit. Researchers who looked at 1,500 samples of
seven malaria drugs from seven countries in South East Asia say
poor-quality and fake tablets are causing drug resistance and treatment
failure. Data from 21 countries in sub-Saharan Africa including 2,500
drug samples showed similar results. No large studies have been
conducted in India and China. Despite this, malaria mortality rates have
dropped by more than 25 per cent globally since 2000 and by 33 per cent
in Africa.
COMMERCIALS
A
legal row has erupted in the U.S. over a set-top box that lets viewers
skip over commercials in recorded TV shows. Three U.S. broadcasters,
Fox, NBC and CBS, have sued the maker of the device. The networks worry
that if viewers choose not to see the ads, their main source of revenue
will dry up. The large U.S. TV networks depend on income from
commercials for survival. Worldwide spending on TV ads is estimated to
reach US$200-billion by 2017.
SUSHI
California
tuna connoisseurs are shying away from sushi over Japan radiation
fears. Traces of radiation in tuna from the Fukushima nuclear disaster
have been found off the U.S. coast, and consumers are being cautious.
However, much if not most of California's bluefin tuna comes from fish
farms in Mexico.
SIZE
The
U.S. Centers for Disease Control has charted the growth of fast-food
portion sizes since the 1950s. The average soda was 7 ounces in the
1950s, and is 42 ounces today. The hamburger was 3.9 ounces back then:
it is 12 ounces today. A portion of French fries was 2.4 ounces in the
1950s, it is 6.7 ounces today.
TRAVEL
Statistics
Canada says that Canadian business travellers made more trips abroad
last year, while foreign business travel to Canada was down. In the last
quarter of 2011 Canadians made more than 807,000 overnight business
trips outside the country. Of these, 600,000 were to the United States,
a 4.7 per cent increase. Overseas business travel was up two per cent.
Business travel to Canada was down by 2.1 per cent to just over 570,000
trips of which about 70 per cent were made by U.S. business people.
Foreign business travellers spent C$588-million in Canada in the last
quarter of 2011.
REMUNERATION
Profits
at big U.S. companies broke records last year, and so did pay for CEOs.
The head of a typical public company made US$9.6-million in 2011. That
was up 6 per cent from the previous year. Companies trimmed cash
bonuses but handed out more in stock awards. The typical CEO got stock
awards worth $3.6-million but cash bonuses fell about 7 per cent. The
median pay for U.S. workers was about $39,300--up about one percent from
the previous year.
CHEESE
The
magnitude-6 earthquake that hit northern Italy recently has taken a
toll on the country's cheese industry. Parmesan cheese producers near
the quake's epicentre have seen 300,000 massive wheels of cheese that
were aging on tall shelves crash to the ground. Only about 30 per cent
of the wheels survived unscathed. After aging for 12 to 24 months, three
million parmesan wheels worth US$2.6-billion are sold each year from
the region.. Two-thirds stay in Italy, the rest is exported. The wheels
that fell represent 10 per cent of annual production.
SICK
While
Americans may seem obsessed with football and Canadians are crazy about
ice hockey, it is nothing compared with China's obsession to
basketball. An online survey of 9,500 workers in eight countries showed
that Chinese workers were the most likely to call in sick to view a
sporting match or after a late night watching or attending a game. China
also had the most people skipping work to play a sport, and basketball
was the most likely to spur absenteeism there. These findings were
similar to another survey conducted globally last year.
NUTS
A
military revolt in the tiny African nation of Guinea-Bissau is rocking
the market for prized cashew nuts. Some of the world's tastiest cashews
are rotting in roadside piles with farmers having no way to ship them to
Indian factories that steam the cashews out of its poisonous shell. The
country is Africa's fifth biggest cashew grower and the yearly cashew
harvest accounts for 98 per cent of the country's export revenue and
employs nine out of ten people, including children. No president has
completed a full term in this chaotic West African country.
PARKING
Vancouver,
one of the most expensive housing cities in the world, is filled with
empty, unused parking spaces in apartment buildings. As residents buy
fewer cars, take transit, if it's nearby, and travel more with bikes and
car-shares, thousands of parking spaces are going unused. It is
estimated that each stall costs between C$20,000 and $45,000 to build, a
cost that is passed on to buyers and renters.
SHOES
Women's
shoe therapy is helping to drive Canadian retailers' footwear sales,
even as their apparel sales lag. Consumers are getting their fashion fix
with the purchase of a new pair of pumps rather than pants or a suit.
As a result, retailers are feeling the urgency to add shoe aisles to
their stores, raising the stakes for everyone to grab a bigger part of
Canada's C$4.9-billion footwear market. Retailers can generate higher
gross profit margins from footwear than apparel if they quickly sell the
products at full price, rather than having them languish on shelves and
cleared out at a discount.
TECHNOLOGY
The
Hershey Co. is employing GPS mapping to provide precise measurements of
farm acreage as part of a scheme in the African nation of Ghana. The
cutting-edge technology will help farmers better plan and manage their
farms, thereby boosting yields and farmer incomes. This is part of
Hershey's US$10-million commitment in West Africa over the next ten
years to accelerate the chocolate makers cocoa programmes in the region.
The investment will involve 1,000 farm families and help enhance cocoa
farming, community health, and reduce instances of child labour.
ORGANIC
Driven
by consumer choice, the U.S. organic industry grew by 9.5 per cent
overall last year to reach US$31.5-billion in sales. Of this, the
organic food and beverage sector was valued at $29.22-billion while the
organic non-food sector reached $2.2-billion. The organic food sector
grew by $2.5-billion in 2011 with the fruit and vegetable category
contributing close to 50 per cent of those new dollars. The fastest
growing sector was the meat fish and poultry category which grew by 13
per cent.
PROFIT
After 16
years of profitability, Canada Post recorded a pretax loss of
C$253-million in 2011, the result of dwindling mail volume, a costly pay
equity ruling and a strike and lockout. Canada Post's loss compared to a
$134-million profit in 2010. Revenue was $7.5-billion, the same for
both years. The fundamental challenge for Canada Post is that it must
work harder every year to deliver less mail to a generation hooked on
Facebook, Twitter and texting.
MINING
Graphite
is the new darling of the mining industry with Canadian graphite miners
angling to be high-end suppliers to the global lithium market where
companies like LG, Samsung, Mitsubishi and Hitachi are fuelling growing
demand for new technologies ranging from smartphones and laptops to
electric cars. The mineral is a major component of lithium batteries,
lighter and more powerful than traditional batteries. After decades of
near-dormancy in the graphite industry, an increasing number of
companies are racing to produce flake graphite, the purest natural form
of the mineral.
SOYBEANS
Prices
for soybeans have recently shot up to their highest level in nearly
four years after disastrous crops in Argentina and Brazil. Soybeans,
which are widely used for vegetable oil, animal feed, soy milk and tofu,
have soared 23 per cent this year as a result of a South American
drought. Production has declined by 11 per cent this year. Soybeans, by
value, rank second among U.S. agricultural exports. 85 per cent of the
world's soybean crop is used for vegetable oil and meal.
FEATHERS
In
the world of obscure commodities, feathery down feathers are a
newcomer. Price increases are forcing apparel and bedding makers to
re-engineer their goods, search for alternatives or warn retailers they
will have to pass along the higher costs to customers. Prices of the
feathery insulation are ascending just as retailers are starting to move
beyond last year's spike in the price of cotton which raised apparel
makers' costs on everything from T-shirts to denim. A pound of white
goose feathers that cost about US$12 in 2009 sell for about $28 today
and $9 a pound duck of feathers now cost $19 a pound.
TAXES
Six
billion Euros is unpaid taxes were recovered in the first four months
of this year by the Italian taxman as authorities crack down on what
until now has been regarded as a national sport.
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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