05/05/2016 BBC Business Live


05/05/2016

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Hello. This is Business Live. Brazil's embattled president tells

:00:11.:00:19.

us that she will fight to keep her job as corruption allegations Mount

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and she faces suspension as soon as next week.

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Live from London, it's our top story today, the 5th of May.

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Defending her Government, Brazil's president

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next week's impeachment proceedings moved closer. We will be live in

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Brazil for the latest. The Chinese internet retailer

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Alibaba Group a is to break new records.

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expected to show increasing profits in spite of the slowing Chinese

:00:59.:01:06.

economy. After weak manufacturing and

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construction, there is a lot riding on a strong reading for the service

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sector today. That is the only thing that could prevent a downgrade for

:01:16.:01:17.

UK growth next week. And we will be getting the inside

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track on a undergoing a rebrand. We will speak

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to the man behind one of the world's largest pork

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producers about that attempt to shake off the old man

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image. We might even try a little bit, you know?

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after two months, if you do not buy newspapers, why not?

:01:39.:01:57.

Welcome. We are starting today in Brazil, where

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the country's president is battling to save her Government as a

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political and economic crisis gets worse. She has been speaking to the

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BBC and says she will fight to keep a job,

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even if she is suspended next week because of impeachment proceedings.

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We will hear from her in a moment, but first, let's run through the

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problems facing the country. Top of the list is a corruption

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scandal, a huge one. It involves the firm, construction firms and

:02:22.:02:26.

politicians. The president faces accusations that

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she used money from the State bank to cover shortfalls in her budget,

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making the deficit look better than it was. The economy shrank last year

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by 3.8% last year, the biggest slump in a

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quarter of a century. Our South America correspondence caught up

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with the president had asked her if she intends to carry on, despite

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those looming impeachment proceedings. TRANSLATION:

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We will keep fighting to come back to Government

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if the impeachment request is accepted.

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will be sure to come out victorious. We in

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the Government and my supporters believe that the

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process is illegitimate and illegal, because it is ultimately based on a

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lie. If we have learned anything in the last six months, it is of the

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rampant corruption in the political system,

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in the governing party and other parties. A lot

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of people agree with your defence that you did not personally benefit

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from any corruption, but you were chairman

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the oil company, did you really not know of what was going on?

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TRANSLATION: I do not believe that Brazil is different from other

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countries with regard to corruption. It is inherent and intrinsic to

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corruption processes to conceal themselves and their practices.

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Corruption processes are by definition

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head on. These practices have to be, of course, looked into and

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investigated. Let's stay with this, our

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correspondent is up nice and early in Sao Paulo.

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Well, the Senators in the opposition simply need a simple majority to get

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the president suspended from office. If that happens, she would be

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suspended for about six months and there would be a trial. She would

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have a chance of coming back later but there would also be serious

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prospect of being permanently removed from power.

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looking good for her right now. Even her own party

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is not very optimistic about the chances of her

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getting enough votes next week. I want to ask, and you have been out

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there for a while now, we but we always talk about this worst

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economic crisis about what is happening with the

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currency. It is a real mess. I am wondering, how does it play out in

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everyday life? Two things stand out in Brazil and

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have stood out especially last year and this - inflation and

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unemployment. We are seeing a lot of people losing their jobs. Brazil has

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lost about 1.5 million jobs in a year, it has been a rapid decline.

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Inflation has doubled, I weigh about the Government target. Those two

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things are hurting people most in their pockets. The other thing is

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that consumer confidence and investor confidence is low. People

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think this will drag on. On top of this, everyone knows the solution to

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the crisis is difficult and hurtful for the people. It means budget cuts

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and more cuts in general. It is very pessimistic, the view for the

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future. Daniel, I always appreciate your

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time. Let's go to Asia. Ali Baba. And

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eight online shopping in China. In a few hours time the internet

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shopping giant is expected to post record annual profits,

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despite the slowdown China, $1 goes through Ali Baba. I

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wonder if the Government in Beijing will be watching these

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numbers closely, because this is linked in

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some ways toward Beijing is trying to do

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Yes, Ali Baba is a BT month. -- is a big beast. It is

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It is dominant in e-commerce, a very important company here. It is a

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barometer for the health of the economy, in particular for consumers

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in this country. We are expecting dizzy record

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figures from them today, growth continuing around 30%. The more keen

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eyed looking back to before when Ali Baba

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went public a couple of years ago. Things have slowed a little.

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There is the expansion overseas. It ties into China's

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desire to export its skills and big companies abroad.

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The boss of Ali Baba wants overseas expansion to

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take up a more sizeable proportion of revenue at Ali Baba. That is not

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really happening. In fact, it is going down, and investors will look

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at that today. Thank you.

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He is in Shanghai. I said Singapore, didn't I?

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You did. Asian city beginning with S!

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Tesla motors says it is on track to has not made a profit. It made more

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losses in the first three months of this year. The loss was $280

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million, worse than last year, it was $154 million then. The

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announcement that it is increasing production has boosted its share is

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4%. As I said, it hasn't made a profit, but investors keep

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pouring money in. The European Central Bank says it

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will no longer produce the 500 euros note because of its role in illegal

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activities. It remains legal tender and will always retain its value,

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but, then you see it, they will stop issuing those new note by the end of

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2018. It will introduce new 100 and 200 euros banknotes.

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Japanese airbag maker Takata is to recall even more

:10:11.:10:12.

of the devices after US authorities said they found more safety defects.

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It means another 35 to 40 million airbag inflators will be added

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to the list, more than doubling the existing recall.

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It affects vehicles from 12 different carmakers.

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Asian shares ending down on Thursday as worries over the global economy

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hit confidence but - oil prices did extend

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It's been all about disappointing readings and announcements

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Economies over the past weeks that have worried investors.

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In New York, there was another pretty lacklustre session.

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In the UK today, we'll get an update on the latest service sector data -

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the PMI readings which being fairly decent in the first quarter,

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Both manufacturing and construction PMI's came in short of expectations

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with manufacturing slipping into contraction territory

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Services are vital for the UK eocnomy -

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so if it's not a decent number - there could be a downgrade in

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Let's check in with Michelle in New York.

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Turning in their report card this Thursday is media company News

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It's expected to report before in third-quarter revenue, and

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first-quarter results from Hollywood studio DreamWorks Animation may draw

:11:43.:11:44.

You may recall Comcast, the owner of NBC/Universal,

:11:45.:11:47.

just struck a deal to buy DreamWorks Animation for $3.8

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All of this to try and help it take on media giant Walt Disney.

:11:50.:11:56.

As for clues on the future direction of US interest rates, four top

:11:57.:12:07.

Federal Reserve policymakers will share their views on Monetary Policy

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Committee outlook for the US economy at a conference in California.

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Richard Hunter is head of research at Wilson King

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What I would like to ask is, you tell us what is going on, because it

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appears that everyone in the market is waiting for something, but I

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don't think they know what they are waiting for. Am I right? You're

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absolutely right. The short-term rallies we have had have been fairly

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tentative. It is like the market keeps going on a sprint running out

:12:44.:12:49.

of breath. In the absence of that one big thing, whatever it is, we

:12:50.:12:53.

are trading sideways. A couple of weeks ago we got to the level of the

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FTSE breaking even for the year, but we have lost another 100 points, so

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there is no big news as such. The first quarter earnings in the United

:13:06.:13:11.

States were OK. Sustained positive growth has yet to emerge.

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Let's touch on that service PMI figure. In structuring and

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manufacturing have been disappointing so far. --

:13:26.:13:30.

construction and manufacturing. It is pretty vital. It is. It also

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feeds into whether companies are holding back at the moment in terms

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of investment and employment, given obviously the upcoming Brexit

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referendum. That kind of uncertainty, which feeds into

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markets as well, obviously, but in the real economy, uncertainty. You

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could see some contraction until we get past the 23rd of June. It is

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another one to add to the list in terms of general uncertainty on the

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markets at the moment. Always nice to see. You will talk us through

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some of the stories in the papers later. For now, thank you.

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Coming up - is port a favourite tipple of yours?

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Once seen as a drink for the older individual, it's now

:14:13.:14:15.

In a moment we'll speak to the man behind the world's second biggest

:14:16.:14:20.

You're with Business Live from BBC News.

:14:21.:14:26.

Telecoms giant BT says annual profits rose 15%

:14:27.:14:29.

last year to ?3 billion, boosted by stronger demand

:14:30.:14:32.

The company also says it will spend ?6 billion over the next three years

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to roll out faster broadband and mobile phone services.

:14:39.:14:45.

Andrew Ferguson is a Telecoms Analyst from thinkbroadband.com

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BT has reported a 15% rise in annual profits to ?3.03bn,

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helped by stronger demand for broadband and TV services.

:14:58.:14:59.

The company also announced that it will spend ?6 billion over the next

:15:00.:15:03.

three years to roll out faster broadband and mobile phone services.

:15:04.:15:09.

It certainly looks that way. There is growth in BT Sport. Audience

:15:10.:15:17.

figures show it is popular. As much as people love to hate it.

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Talking about the synergies we have seen when they talk about a merger

:15:24.:15:30.

with EEE. They talk about cutting costs to bring the companies

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together smoothly. How is that going?

:15:35.:15:39.

In terms of the market and the consumer, we're not seeing a lot of

:15:40.:15:43.

changes. The big change seems to be coming with the extra 1000 employees

:15:44.:15:49.

in UK-based call centres. Support will be in the UK, which hopefully

:15:50.:15:56.

means better quality support. It is a story, isn't it, about customers

:15:57.:15:59.

and the competition in the market? We have seen all of the big

:16:00.:16:07.

providers wanting to offer deals including landline, internet, all of

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that in one package. The competition is pretty intense.

:16:11.:16:15.

It has never been more intense, it is a competitive market and price

:16:16.:16:28.

sensitive too. Thank you very much. 15% rise in annual profits coming in

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at ?3 billion at BT. Don't be put off by the alcohol on the table, we

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will talk about it shortly. The premium British chocolate here wants

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to list on the London market Aim. The Chief Executives appeared on the

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programme and we talked to him about those plans and expansion plans and

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it seems paying off listed on the stock market.

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You're watching Business Live - our top story Brazil's embattled

:17:07.:17:08.

president has told the BBC that she'll fight to keep her job -

:17:09.:17:11.

as corruption allegations mount and she faces suspension as soon

:17:12.:17:14.

There is a full interview with the Brazilian President online. It is

:17:15.:17:28.

worth a watch. She comes out fighting ahead of those legal

:17:29.:17:29.

proceedings. It might still be early

:17:30.:17:32.

here in London but never too early to sample a bit of booze -

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as we assess how our next guest Port is a fortified wine which can

:17:37.:17:39.

only be produced in the Douro Valley The average age for drinkers

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of the wine is around 55 but one company is now trying to change

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that with port-themed Symingtons Family Estates

:17:55.:17:56.

are the world's second largest port maker -

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Paul Symington is their Chairman and Joint Managing Director

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and he joins us now. Very nice to see you and thank you

:18:04.:18:11.

for bringing in, what we will call props, but we may work our way

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through them. They may not just be decorative. Let's talk about the

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industry, because as we said it is traditionally an industry skewed to

:18:21.:18:24.

the older generation, I think it's fair to say and you are trying to

:18:25.:18:30.

change that. How do you rebrand the industry that has this reputation?

:18:31.:18:34.

We have to use our history, it's the oldest market in the world, we have

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to use it and we cannot discard our great classic supporters and

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customers but we have to attract younger drinkers otherwise we will

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slowly decline and we are doing that by introducing lovely old tawny

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ports that can be served chilled, matched with chocolate, Asian food.

:18:50.:18:55.

And the growth of the premium port sector, the ports above ruby tawny

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white has been strong, Scandinavia, the UK, Canada, the USA, the market

:19:00.:19:06.

is increasing. When talking about the size of the industry and growth

:19:07.:19:10.

around the world, talked us through where the biggest markets are,

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people may think of it as a very British thing and maybe an older

:19:14.:19:19.

generation. Where is the growth? The growth is coming basically for all

:19:20.:19:25.

the fine wine, the major markets are Europe and North America. There is

:19:26.:19:29.

simply not the wealth in Africa or Brazil, as you were talking about

:19:30.:19:33.

earlier in South America, to have big growth, but we are present there

:19:34.:19:37.

and work hard in those markets and Asia, but the growth for all fine

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wine, the markets rather, is Western Europe and North America. Those are

:19:43.:19:46.

markets we work very hard in and we've seen a distinct shift to

:19:47.:19:49.

drinking a bit less but drinking better. We have such a long history.

:19:50.:19:53.

I know I'm biased but the Douro Valley is the most beautiful wine

:19:54.:19:58.

area in the world. We need to use all our cards in our hand and it is

:19:59.:20:02.

working. We've had good growth in the UK in recent years with premium

:20:03.:20:06.

ports in the UK, less volume and more premium. No pun intended but it

:20:07.:20:12.

seems port is in your blood, probably literally sometimes, but

:20:13.:20:16.

this is a family thing, right? As we were saying. Did I read that five

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generations, you work with your family, some people say it would be

:20:23.:20:27.

nice to work with brothers, sisters, wife, but can that be a double-edged

:20:28.:20:32.

sword? When a family business is united it is incredibly powerful and

:20:33.:20:34.

effective and when family racial chips are bad you better get out. I

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don't know, we are a mixed of Scottish, Portuguese and English --

:20:41.:20:46.

relationships. We have a pragmatic view about it and we realise if we

:20:47.:20:50.

work together we are strong. There is a big affinity between wine and

:20:51.:20:53.

families and a big in-built protection. Abled visualise wine

:20:54.:20:58.

made in a beautiful vineyard in a lovely area which the Napa Valley

:20:59.:21:02.

and Bordeaux and Burgundy are and they like to visualise those who

:21:03.:21:05.

make it and we use that card a lot, my daughter is just down the road at

:21:06.:21:08.

the biggest British wine fair serving wine right now. I'm tasting

:21:09.:21:15.

this as we go a long while you carry on chatting. What makes a premium

:21:16.:21:20.

port? You talked about the low end of the market that is pretty

:21:21.:21:24.

saturated, pretty regular supermarket sort of port you can

:21:25.:21:29.

buy. What makes this premium? A huge selection in the vineyards and

:21:30.:21:34.

wineries. You are discarding 20-30% of the grapes to end up with a wine

:21:35.:21:38.

of this quality. If you're making the standard quality of winds you

:21:39.:21:42.

are just picking the grapes. When making wines of this quality you

:21:43.:21:46.

have people literally hand sorting rapes on the tray is coming in. That

:21:47.:21:53.

is an expensive -- grapes. Coming back to the younger generation I

:21:54.:21:58.

talked to one of the make-up ladies, she is not 55, she is a lot younger.

:21:59.:22:04.

I said you will get to taste some port and she said it is one of her

:22:05.:22:07.

favourite tipple is. They mix it with Tomic. Yes, white port --

:22:08.:22:18.

tonic. Do you mind that? Not at all, as long as they are buying it. Keep

:22:19.:22:23.

the family business going. White port and tonic is delicious. We have

:22:24.:22:30.

over 1 million Brits visiting Portugal every year and they bring

:22:31.:22:34.

that back. We are happy that anybody uses our wine in the best way

:22:35.:22:38.

possible. Paul Symington, good luck with everything and we appreciate

:22:39.:22:42.

you coming in, thank you very much and we will talk to you another

:22:43.:22:45.

time. Stay there, do not go anywhere.

:22:46.:22:50.

Let's talk about Airbnb. In just a few years

:22:51.:22:52.

the accommodation sharing website Airbnb has gone from tiny

:22:53.:22:57.

San Francisco startup to a $25 billion company

:22:58.:23:00.

that has challenged But, it's not been

:23:01.:23:02.

without controversy though. Airbnb's co-founder,

:23:03.:23:05.

Nathan Blecharczyk explained This is a very new model and

:23:06.:23:06.

the rules that govern accommodation often go back decades so we've

:23:07.:23:14.

never contemplated this. I think everyone realises

:23:15.:23:16.

that the policies need to Governments are trying

:23:17.:23:19.

to figure out how to do this. We are in a lot of

:23:20.:23:23.

different jurisdictions. However, when countries

:23:24.:23:25.

have passed new policies they have generally been

:23:26.:23:29.

very favourable to home sharing. Just the other day the Indian

:23:30.:23:32.

government signalled that they think home sharing has a lot

:23:33.:23:35.

of potential for the country. I think what we've demonstrated

:23:36.:23:37.

is that there is an immense appetite to travel more

:23:38.:23:42.

authentically and to immerse yourself into kind of culture

:23:43.:23:44.

and kind of really connect as opposed to having a kind

:23:45.:23:47.

of commoditised So personalisation

:23:48.:23:52.

and really kind of connecting with people I think

:23:53.:23:55.

is going to be important. We have some tweets, Richard is back

:23:56.:24:08.

to take us through the papers. That is my glass and that is Ben's glass,

:24:09.:24:12.

something missing? That would be the port!

:24:13.:24:22.

This is an interesting one, The New Day newspaper launched a few months

:24:23.:24:28.

ago but it will not continue. It is all about advertising income, aiming

:24:29.:24:33.

for sales of 200,000. At the launch it was being given away free and the

:24:34.:24:37.

price was slowly jacked up. Apparently the current circulation

:24:38.:24:44.

is around 30,000 copies per day. It is obviously sad news and it is also

:24:45.:24:47.

quite surprising it should happen after two months. In terms of a

:24:48.:24:52.

start-up business you would have thought there would be projections.

:24:53.:24:56.

Trinity Mirror makes the point it was experimental, they just tried it

:24:57.:25:00.

out but two months is very brief and lots of people getting in touch.

:25:01.:25:04.

Tim Barter and tweaked it and said: printed news is out of date almost

:25:05.:25:08.

as soon is it is published -- tweeted. I get news from Digital

:25:09.:25:15.

apps and other media that is what papers are fighting. Where The New

:25:16.:25:20.

Day try to be different was they were more about print comment and

:25:21.:25:25.

analysis that newspapers can add, as opposed to rolling news which is

:25:26.:25:29.

immediately available online. We have about 30 seconds.

:25:30.:25:34.

This is interesting about Netflix, how to choose a TV show. The issue

:25:35.:25:39.

is how quickly people are having to be caught, you have to have a good

:25:40.:25:42.

picture, it's not about the quality of the show but the picture that

:25:43.:25:46.

advertises it. Summit choice on Netflix and unless there is a

:25:47.:25:49.

specific show you are after something needs to catch your eye --

:25:50.:25:54.

so much choice. Netflix is spending a lot of money to see what that is

:25:55.:25:58.

for different generations. Spot on, Richard, we appreciate your time.

:25:59.:26:02.

Thank you for your company whether you are watching in the world. Bye

:26:03.:26:04.

bye. Hello once again, something of a

:26:05.:26:14.

mixed bag of weather across the British Isles again today but for

:26:15.:26:17.

the most part the high pressure is the dominant feature across the

:26:18.:26:21.

greater part of Finland and Wales and the weather front is spreading

:26:22.:26:24.

quite a bit of cloud across the Scottish Borders

:26:25.:26:25.

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