30/10/2015 BBC Business Live


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This is business live from BBC News. Good news is brewing for the largest


beer make in the world. Revenues rising. All of this as it prepares


to take over its closest rival. Live from London, that is the top


story today, Friday the 30th of October.


A firm could produce one third of all beer around the world but what


does that mean for consumers? We find out. Also, fixing the price of


toilet paper. A decade-long deal between the two


map probe biggest forestry companies in the world. And we get the inside


track on a tonne of technical stories.


Apple, Twitter and talk talk making the headlines for different reasons.


Thank you! Do you want to sit down and do this as well? We will get


that from our expert Rory Catlin Jones and we want to know from you,


tomorrow, it is Halloween and it is huge business in the United States


and getting bigger in the UK. You spent a lot of? Do you go trick


or treating or do you hate it when the little ones come to your door?


Tell us what you think. I would not want to turn up at his


door! Welcome to the programme. The world's, just black has had solid


results with revenues rising to $4.4 billion. It is a key player in a


rapidly growing market. To give you an idea of the scale, the global


beer market made revenues of $440 billion last year, expected to grow


to 688 billion 2020. The company will more of that market if its


takeover of its smaller rival SAB Miller is successful, it it would


create the world's first global brewer and it would make around a


third of the world's beer so the market could become even more


concentrated with less suppliers and that could push up prices. The


drinks market has the George in North America and Europe and growth


has all but disappeared. Big Rory is now compete with smaller craft


breweries. Latin, South America, India and China are growing markets.


With that RGI, I would not want you showing up at my door! Alex, great


to have you with us # With that RGI. We had been talking


about this. Surely the biggest hurdle for these two has to be


regular treat in terms of addition, that is a third of the world's beer


market in the US, 70%, are they going to allow that? Surely not and


it is being well fed. The deal has been in the works for so long. They


have the playbook, they need to divest SABMiller brands in the US.


We have looked at Australia and Brazil, but the US, 75% of beer, it


is an easy move. AB Inbev owns Budweiser and other brands.


SABMiller has Miller, just so that part. I am wondering, we talk about


deals. Does one need the other more? Does AB Inbev need SABMiller


more #. You could argue that and people have


argued that. That is one reason they are able to attract considerable


premiums. It is Africa, is that the clue? If you look at the map of the


world, Africa is SABMiller. AB Inbev, if you get their annual


report of Africa, there is nothing in it. And we talk about controlling


a third of beer sales around the world. But we talk about these other


players so it seems counterintuitive that the competition is from niche


players in North America and Europe they go for this mass global appeal


to flood the market with this stuff rather than concentrating on smaller


rivals. Yes, this deal will give AB Inbev control of the world basically


in terms of beer. Beer markets, they are national so although it is one


and three worldwide, you have to look at every country separately. In


terms of the regulations. The competition is from Kraft brewers,


Heineken have taken them in the US. That is one of the questions, why


are you not focusing more on entering that space? It could be


that in the US, the expansion for these two, or the 1 after the deal,


it is not to buy those up. Are they just to big to enter that space? It


seems you have to be nimble and well tuned. They do mass-market well and


they do not get that individual niche market. That is a hurdle but


they have to figure out how to do that. SAB Miller has been trying


things out with tasty beers in Latin America and the US. You have to been


embroiled but they have existing players who might be buying them up.


Great stuff, we appreciate that and you will keep across the deal. We


will talk to you again sometime. Other business stories now in the


meantime. The Bank of Japan has cut its growth


forecasts and pushed back the target for reaching key inflation targets,


thanks to a slowing economy. The central bank in the world's


third-largest economy says it now expects growth to come in at 1.2%


in the year to March 2016. That's down


from an earlier forecast of 1.7%. British Airways owner IAG has


reported a 43% surge in pre-tax profits of $1.2 billion


for the three months to September. That's compared to the $818 million


for the same period last year. Profits were boosted


by lower fuel costs. Shares of baby products have risen


sharply after China announced Companies including Danone and


Nestle stand to benefit because baby formula sales in China are expected


to double in the next five years. We are going to look at the business


page. We are talking about British airways, Iberia, Spain. And a


Spanish low-cost airline. Try saying get fast! And is now telling this.


It is highlighting, Willie Walsh, former boss of British Airways and


now of IAG, that was a smart move. We talk a lot about how important it


is for oil prices and the effect on businesses around the world,


especially BP and Shell and the fall in profits. But good news for


profits including the airlines. They have all been making profits off the


back of lower fuel prices. The trick is to watch when the fuel prices go


up, can they continue making profits? And another question for


IAG, who is next? They are quite hungry. They have money to spend.


Let's take you to China. And Japan. An 86% fall in profits at Sharp. Our


correspondent has the story. Ashley, good to see you. So a sharp fall,


excuse the pun! Indeed! Another disappointing result


for a company that was once a giant of Japan's electronics industry.


Sharp's operating profit, bold to $29 million in the three months to


September. The reason is falling sales in its smartphone display


screens. The firm has also posted its steepest half-year loss in three


years. Sharp has been struggling to stay afloat, receiving two bailouts


in three years, and in May, thousands of jobs were put on the


line. The company has been under pressure from creditors to sell off


its loss-making business and its Chief Executive has confirmed today


it is in negotiations with several companies to do just that. Even


before today's results, shares at Sharp closed 1.5% to a year low.


Good stuff, have a great weekend in Singapore. And we made to Friday!


What have the markets done this week? This is how the week finished


in Asia. Tokyo stocks higher at the bank of Japan made it hired there


would be -- made it clear there would be no more stimulus, creating


speculation it may be trying to slow growth. A Chinese rate cut, the


European Central Bank has said it might offer more stimulus and the


Central Bank in America is about to pull the trigger on a rate rise by


the end of the year. Watch that December meeting. The upswing in


Asia has translated to a mixed opening across Europe. We will


discuss that in a moment. First, Wall Street. The details from New


York. Two oil giants will both post


earnings and low oil prices will wait on the company's earnings as


the industry feels the pain. Last year, Exon Mobil posted its worst


results and the amount Americans are spending rose in September, another


sign domestic demand is healthy despite the fact the global economy


is struggling. And we will see how people feel about the economy when


the new consumer index comes out, analysts say it rose slightly from


September. Richard Hunter, a familiar face to


the channel, good to see you, welcome. Starting with the US, the


biggest economy and came out with the three-month growth numbers, we


expected about 1.7%, we got 1.5%. The previous three-month period,


they had growth of 3.9%. So not good.


That is the reason why the Fed had been so indecisive over the last


couple of months, will they, won't they? We have no meeting in


November. Were they want to spoil Christmas and bring it in December?


Prior to yesterday's announcement and the minutes of the other day,


smartphone was on a rise last year and it is now 50-50. 50-50 for


December. They could pull the trigger. I wish they would do it.


Nothing is going anywhere fast, what are they waiting for, for rates to


go up in the US and the UK? You are right, it needs to be out of the


way. They will not do more of a quarter of 8% so arguably they could


have done in September. Tiny. It is the direction and speed of travel,


they will not derail what little recovery they have got. And also, we


are in the middle of the third-quarter reporting season in


the United States and that has been a mixed bag. Good numbers from


technical stocks, poor numbers from the banking stocks. Banks should in


theory and effect from the interest rate rise but in terms of corporate


America, that mirrors the economic figures we see, a mixed bag. Can we


go from the world's biggest economy to the third biggest, Japan? It has


not done anything at the moment although it cut its inflation target


and forecast for this year. It does not have a lot of tools left, does


it, to do much? Not after the three arrows and all the rest of it which


have yet to show any signs of success. A big problem for Japan,


biggest trading partner China which is slowing down. You will take us


through the papers later, thank you, we will make you work!


This week has been fantastic, record results for Apple. Twitter. TalkTalk


had to deal with a hacking. Our technology editor will be here to


take us through the ups and downs. Will he? That is business live from


BBC News. It has been a big week for banking results in the UK, RBS has


just released its latest set of results and Tanya has been wading


through the numbers, and is up-to-date. They have a pre-tax


profit of ?952 million which is an increase of 6% last year. Would


argue it is not the number that is important. This is a bank that was


rescued at quite a bit of cost to the taxpayer in the wake of the


financial crisis and since then, the government has sold off some of the


shares, they have bought the stake down to 73% and that cost the


government about ?1 billion, that was a loss, getting rid of those


shares. Shares have been hovering around ?300 at the height of the


pre-financial crisis. They were 500 before that. They have recovered


quite a bit but is desperate it is going to a restructure, getting out


of 25 countries, costing a lot of money, the restructuring costs. It


is also losing the business associated with that and it has sold


off citizens in the United States. This is the real problem, there are


a couple of misconduct issues still for RBS. The other banks for the


most part have started to see the end of that. RBS does not know how


much it will cost to settle claims in the US about security mis-selling


and there is a question in the UK about how it handles small


businesses so this is a bank with an uncertain future in a sense it is


difficult to know how the costs will stack. On the bright side, it now


has money to pay a dividend and that is what it is doing and it is


reforming in a clear way, it is just taking a bit of time.


Solid numbers reported ahead of signing of this bust a deal to buy


its Red Bull -- its rival SAB Miller. It makes Budweiser and


Stella. Profits went up I9.6% in the third quarter.


Profits likely to get bigger as it continues. It is Friday, it is


casual, he has one button more and we will take a step back behind the


headlines and get the lowdown on the big technical week, we have covered


big stories here. A quick reminder of what we have learned this week.


Apple reported a record profit of 11 billion dollars from iPhone sales,


48 million. Twitter shares fell 11% after announcing results, despite a


rise in revenue because of all growth of active users joining the


social network. Only 4 million in the third quarter in the last three


months. TalkTalk became the subject of discussion after it revealed a


significant and substantial hacking, a 15-year-old boy in Northern


Ireland has been arrested with a second teenage boy arrested today. A


16-year-old boy arrested in Feltham. So clearly issues. Rory is here.


Good morning. Happy Friday. A heck of a week. Starting with Apple.


Where do you go with this? 51.5 billion in revenue in three months,


11 billion profit, 48 million in iPhones.


There is a pattern. It's all about this. It's all about the iPhone, the


single most profitable product I reckon any company's ever had in


history. But, it's becoming, funnily enough, it's becoming a bit of a


worry for those who follow the company. They're saying two things.


How long can this go on? And isn't Apple a bit overdependent on it? The


proportion of its profits that come just from this are getting ever


higher. They bring out other products, they bring out the watch.


Too many eggs in one basket? Yeah but every time Apple then comes


along and knocks it out of the park. This time, in particular, we have


been expecting possibly a little worry about China, China's obviously


been huge for Apple in the last year or so. After not really making much


of an impact, suddenly it's been making an impact and this time huge.


One thing that refreshed my memory with these Apple numbers, you tend


to think Apple favours the US market with stuff it brings out there. 62%


of all the money Apple rakes in comes from all of us, international.


We are the one who gives the gusto to Apple. It's a global superpower


in technology. We know that. Completely focussed on one product,


increasingly focussed future growth prospects on one territory, China.


People are beginning to say, yeah, but how much appetite is there? You


can get, here is another phone... Look at you! You are a walking


mobile shop. Lovely phone. Google Nexus. Lots of great phones out


there. And they all do much the same. What Apple has managed to do


brilliantly is maintain the differentential. It's selling at a


huge price. Overer smartphone, manufacturers are getting less for


them. How long can they hold on to the stunning margins, that's the


question? So far, they've pulled it off. A quick word on Twitter. This


is on the BBC news website. Twitter's first TV advert confuses


viewers. You can see it there. What is this? Well, Twitter is in a lot


of trouble. The new chief executive, its old chief executive, who came


back, is trying to turn things around. One of the things is this ad


trying to make Twitter appeal to a new range of people, get them


excited about it again in a way they excited about it again in a way they


haven't been. Here is a Twitter story, actually this week's numbers


from the financial point of view weren't that bad. Revenue, they've


learned how to start making money. The trouble is the whole company is


predicated, the share price, on the theory it will grow like Facebook.


Facebook kept on growing, one-and-a-half billion users.


Twitter's growth has begun to plat toe. Analysts are beginning to worry


it will never justify the sky high valuations. The share price has come


down. It's still massively higher valued than Apple in terms of ratio


of price to earnings. Something like 34 times earnings, whereas Apple is


six times. It says, you know, Apple, mature business, not going to grow


much further according to the market. Twitter still expected to


grow massively and every time it fails to grow massively, huge


disappointment. Quickly move on to TalkTalk. This second arrest. Apart


from the second arrest, where are we at with this mess? We are still


trying - what we are seeing is a lot of anxiety across the corporate


world about vulnerability to hacks. More than that, how you deal with


them. At first it seemed TalkTalk had done quite well. They had come


out, been very bold in saying this could be terrible. Then they dialled


down the message and said maybe it's not as bad as we first thought. What


they've left is a vast amount of confusion. What they've done to


reassure the market is actually be tough with consumers and say you


won't be able to leave us without penalty and unless you can actually


prove that you have lost money because somebody's got hold of your


data. Lots going on. You will keep across that story. Have a great


weekend. Thank you for joining us. Always a pleasure.


We are talking there, the police arresting a second teenager boy in


connection with that investigation into the alleged data theft at


TalkTalk. Full coverage of that continuing across the BBC.


In a moment we will look at the business pages. Remember always we


want to hear from you and here is how to get in touch with us.


The business Live web page is where you can stay ahead with the breaking


news. We will keep you up to date with the latest details, insight and


analysis from the BBC's team of editors right around the world. And


we want to hear from you too. Get involved on the BBC business live


web page. You can find us on Twitter and Facebook. Business live on TV


and online whenever you need to know.


Richard is back. Let's start with The Guardian. A conspiracy to affect


the price - even loo paper there is a conspiracy! Affecting poor people


the most, but they've been brought to task. OK. Right. Anything else to


say on that, Richard? I think it stinks, the story. OK. Google.


Google famously pulled out of China. It couldn't get its own way with


security, safety all that sort of stuff. It says now the parent


company may go back in on its own terms and make sure we all know this


is a different thing it's going back into. Two things at play here.


Firstly the whole issue of the Chinese and how they regulate their


own internet and won't let certain foreign institutions in, etc. I


suspect the other thing is that Google or Alphabet have probably


been looking sideways rather enviously of what Apple is doing


there. They can't afford not to be there, regardless of what they think


or morals they need to be there financially. You are right, of


course. China is the second largest economy in the world. Most estimates


would say it's going to be the largest economy in the world within


ten or 15 years. Clearly it's a massive piece of business, they not


only need to start trading there but become rather entrenched in the


Chinese psyche, as well. Interesting. Let's try to get this


before we have to wrap up. Some retailers stepping back from Black


Friday, the day after Thanksgiving. Retailers turn a profit. Is this


because of online? Partially. It's also, and something because this is


taken off in the UK the last couple of years, retailers are finding,


hold on, all we are doing is putting forward Christmas sales. Christmas


sales pop off a cliff because they're waiting for January sales or


it's prebought on Black Friday as is. They're finding the same in the


States. I am sure it won't see an end to the crazy pictures of people


fighting over TVs and stuff. Thank you, Richard. Thank you for your


company. You are up to date with the business news. From him and me,


goodbye. Hello. The weather has the potential


to be really quite warm this weekend but only if low cloud


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