15/12/2015 BBC Business Live


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This is Business Live from BBC News with Aaron Heslehurst and Sally


As firms continue to count the rising cost of hacking attacks,


we ask if it's now time for governments to play a greater


Live from London, that's our top story on Tuesday 15th November.


2015 has seen a series of high-level global cyber security


Some of the biggest victims of those attacks will be meeting


The question on everyone's lips ? what, if anything,


China's Island Factory - the global power is building


artificial islands in the South China Sea.


On the markets, Japanese stocks led losses across much of Asia as oil


prices continued to slide and with investors remaining


cautious ahead of a widely-expected US interest rate rise on Wednesday.


And on Inside Track we have a real cracker of a CEO today.


We'll be speaking to the man who heads United biscuits,


they're the global snack firm behind brands including McVitie's


and Jacob's crackers and Jaffa Cakes.


Today as a rocket carrying three astronauts prepares to launch


from Kazakhstan we want to know, does the idea of space


Let us know - just use the hashtag #BBCBizLive.


The past year has seen a record number of high level cyber security


In the UK, Members of Parliament are meeting today to discuss


the issue and will be joined by the Chief Exec


They suffered a massive cyber attack in October.


Hackers accessed personal details of almost 157 thousand customers,


including more than 15,000 bank account numbers and sort codes.


And they're not the only ones - PayPal, Ebay, JP Morgan and Sony


Hacking costs firms that operate around the world an average of


In the UK alone, it's estimated that hacking costs firms a total


of $51 billion a year.


$27 billion of that is lost revenues as the result of attacks


with the other $24 billion spent on firms defending themselves


What will they discuss today when business leaders and politicians


meet? We're joined by Anthony Leather,


senior consultant, Aerospace, Defence and Security,


at Frost Sullivan. Outlining the possible cost of this


problem, it is huge. TalkTalk is an example of that earlier this year.


Absolutely. Side bar has really come onto the risk register for a number


of companies, elevated by the UK Government as a Tier one national


security issue. There is much more engagement required across


Government, industry and business to try to tackle this. Europe is


talking about this quite intensively and the EU may come up with rules


and regulations that we would have to add here too. Give us a sense of


where we are headed and what the politicians and business leaders may


well discuss today? One of the biggest issues is transparency,


people not reporting on attacks in the past, not sharing information.


By Midge and collaboration was an issue, the EU cyber-security policy


really drives better collaboration across countries, but also across


some of the businesses as well to share threats and breeches and to


ensure certain standards of cyber-security for the protection of


information and data of customers. We talk about the billions, we just


talked about the cost of UK firms, more than $50 billion, but I wonder,


they spend billions but hackers are still getting through, it is a


constant battle ground, so I keep hearing. Security firms constantly


coming up with walls, hackers are constantly coming up with ways of


getting around those, I guess the TalkTalk incident highlighted it is


not just IT departments now. You make a good point, we moved away


from the walls, people realised their networks would be penetrated,


it is about realising the threats, having constant diagnostics running


at the capability in place to remediate a lot of the issues. With


that issue is found, to be one quite quickly. The engagement at boardroom


level really needs to happen more moving forward because they are


beginning to see hits on revenues and reputation and it is an issue is


ready to be more active with. Thank you very much for coming in and


sharing your expertise. We will be across any news that comes out of


that meeting that is taking place today.


The US city of Seattle has approved a law which allows drivers


for the online taxi service Uber to join a trade union.


Uber regards its unlicensed taxi drivers not as full-time employees


but as contractors with flexible hours.


The company has resisted efforts from drivers to negotiate


collectively on pay and working conditions.


A report says the UK should start fracking to establish the economic


It claims shale could create jobs, but doubted if it would cut prices.


Abundant shale gas in the US has helped domestic energy prices fall.


Aviation officials in the United States say all small


drones and model aircraft in the country must be registered


Drone pilots will have to pay $5 to obtain


The authorities promised to bring in regulation in response


to concerns over privacy and security.


Your boys have got drones. They have both got little ones.


They can go up I take a picture. Do they have those ones?


Yes, they are not expensive. If you had to register them all...


I had one, I lost it, it flew off! Let's take a look round the world


at what's business stories Slicks if you don't want a dog about


this today, it is all over the BBC, a bit tricky! Tim Peake anti other


astronauts are heading into space, take off is 11:03am GMT. It is quite


an exciting moment, but this is an industry that is worth a lot


globally but certainly to the UK economy as well.


?11.3 million. A very exciting story. We have asked


you to get in touch, are you excited about this, would you go to space on


holiday? Yes! I would love to see the planet


from up there. We would like to know your thoughts.


Just stick me in a rocket, one-way ticket!


I am getting it from the gallery! Let's move on!


China is building huge artificial islands in a controversial area


of the South China sea where six countries have a territorial


Because the construction work is hundreds of miles out


into the waters, no journalist has been able to film


The BBC's Rupert Wingfield-Hayes flew in a small civilian aircraft


into the security zone, unilaterally imposed by Beijing.


You are threatening the security of our station.


They are being told, don't come! Tell our viewers around the world


how important this area is? It is a huge trading area with a lot of


ships passing through? A huge number of ships. Think about


the countries around the rim of the South China Sea, to the north you


have China, the world's second-biggest economy, Japan, the


world's third biggest, South Korea, Taiwan, Hong Kong, and to the south,


Vietnam, the Philippines, Malaysia, Indonesia. A massive amount of the


world economy is concentrated around this seed, and for that reason about


40% of the world's trade is thought to pass through the South China Sea


every year. A lot of it is manufactured, but also oil and gas


coming into these economies, and about 11% of all of the crude oil in


the world passes through the South China Sea, 6% of the liquid natural


gas. Two figures are important, China get about 40% of its oil from


the Middle East and all of it comes through the South China Sea. That is


why China wants to be able to secure this area. But hang on, Japan gets


80% of its oil from the Middle East and all of that comes through the


South China Sea, too, so Japan is extremely nervous about what China


is doing, building these islands, apparently military bases, to take


control of the South China Sea. Astonishing figures. Thanks very


much for that, we appreciated. Let's talk markets, keep this in


mind, oil and Janet Yellin. Janet Yellen, the big boss


of America's central bank, and the big slide in the black


stuff is dominating. US crude fell as low


as $34.53 a barrel on Monday. Brent crude traded over here,


it fell to $36.33, its weakest level But keep this in mind -


a fall below $36.20 would take oil Remember, just over a year ago oil


was running at $120 a barrel. Nikkei closing down


at a 7.5-week low. The Federal Reserve begins its last


meeting of the year today, and traders see an 83% chance


that the Fed will press It'd be the first time


in almost a decade. Of course a rate hike would signal


confidence in the US economy, but some investors worry


it may slow growth. And the main question now turns


to how many increases will follow Let's get the latest on what should


be making the business headlines on that side of the Atlantic today.


The event everyone has been talking about has arrived, the Fed's


policy-setting group will begin a two-day meeting on interest rate


policy on Tuesday and investors have almost fully priced in a rate


increase, the first in the decade, and the debate is how many increases


will follow in 2016. Low energy prices has helped offset the


increase in products, and US anti-trust regulators are expected


to decide whether or not they would want the $26 billion deal. They hope


it will alleviate concerns that a deal would be anti-competitive.


It has been quoted year for mergers and acquisitions.


The lawyers will have made a lot of money! Carrying it all the way to


the bank! Joining us is David Buik


from Panmure Gordon Co. He doesn't need an introduction!


Part of the family! Everybody is talking about it, let's


start with the Fed. Almost to the point of boredom. The fact remains


Janet Yellin is that truly conservative, she replaced Benbow 90


just over a year ago and has been teasing us for a year now. It has to


stop. If she does not stop teasing us, the bank will lose credibility.


Should she have raised them sooner? There has just been too much


rabbiting. To be fair to her, we have been doing the rabbiting.


The other thing is, this forward guidance has proved to be rubbish,


it doesn't matter what central Bank you speak to, the prognosis and


forecasting of what will happen in the future has been, at best, Dyer.


It is something you shouldn't get too involved in. Because she


threatened it six months ago, the dollar went to the moon, emerging


markets fell around our feet in dismay, will she, won't she, Shelby,


shan't we? It has to stop. As the saying, the first will be on


Wednesday, then one in March, one in September 2016... How do they know?


The answer is, they don't. Let's take each day as it comes, put the


symbolic rate up, back off, see how it works, if it works, go on, if


not, put it back. The other question was about oil. It


is over the papers. They are ruthless. We will talk about oil.


Later. David will return and we will be talking to a guest that really


takes the biscuit! We're going to be joined


by the Chief Executive of United Biscuits, the company


behind a host of tasty snacks including one of my


favourites, Jaffa cakes! You're with Business


Live from BBC News. UK astronaut Tim Peake is ready


to make his landmark flight The space sector is now worth ?11.3


billion annually to the UK economy. Sarah Rainsford is in Kazakhstan


preparing for blast-off. Sarah, what does this launch


mean for the UK space industry? Well, it does. Certainly the hope is


that this will lead to further investments in the space industry in


Britain. I mean the fact itself that there is a British man heading up to


the International Space Station for the first time is proof of that will


if you like to put more money into the space programme because the


British Government paid around about, I understand, ?20 million for


this seat for Tim Peake today on the rocket here behind me, the Soyuz


rocket. That represents a significant investment for Britain,


but it is a bit of a discount in terms of what the seats normally


cost. Russia rents them out at $70 million for each seat. So Britain is


getting a good deal here, but yeah, the hope is that Britain will then


be increasing investment in the space programme, in the Space Agency


and that will lead to more jobs. There is around about 34,000 people


currently employed in Britain in the space industry and we are looking at


up to 100,000 by 2030. Of course, that might be helped by the


excitement about this flight. Tim Peake is the first official


astronaut heading to the ISS: There is a huge amount of excitement at


the cosmodrome where he is going to make the flight. His family and his


friends are here. There is plenty of people wearing Union Flag bobble


hats and waving Union Flags as he came out of the hotel and cheers and


crowds wishing him well as he came out. Maybe that will add a bit of a


thrust as well to the space industry back home.


Thank you very much. Sarah Raynsford in Kazakhstan and we will be right


across that later. Another story in the business News. Yahoo is told to


cut free food for its staff. That's one of the suggestions to help boost


its bottom line. Our top story: Cyber attacks costs


the average global company $7.7 In the next few hours some


of the UK's leading CEOs whose firms have been subjected


to major hacking attacks, will meet with


politicians in London. Top of the agenda, how


to protect personal data Now it's time to make a cup of tea,


put your feet and break out the digestives because we are going


to discuss the business of biscuits. I will be talking about it. Aaron is


busy off loading brands we know very well.


We have the Chief Executive of United Biscuits.


But first let's get some background on the company behind the treat.


United Biscuits are behind some our most beloved snack brands


including the likes of Jaffa cakes, hobnobs, Jacob's Cream Crackers and,


of course, the classic McVities digestive.


They currently sell products in 130 countries and are now


growing their market share in emerging markets including


the likes of Saudi Arabia, Nigeria and India.


Last year the group was put up for sale by its private equity


owners and acquired by a Turkish food giant Yildiz Holdings


In April of this year Jeff van der Eems was appointed


Chief Executive of United Biscuits after spending ten years


I'm pleased to say that he joins me now.


Welcome to the programme. Thank you for bringing in all this food!


Eat away, enjoy! That's what they are there for.


Jeff, clearly you have got a lot of very well-known, famous brands,


fairly diversified. But you've just been acquired as we say by a Turkish


company. That company has its own ambitions. Just talk us through how


that is working out and what it means for you in terms of future


growth? We are pleased that the Turkish company were the acquirer of


United Biscuits. We have been under private equity ownership for 14


years and it has complementary technologies and baking is at the


core of their business. They started as bakers in 1944. We started as


bakers 200 years ago. We share the same DNA.


Was it a tough battle? I was reading that yielders fought off Kellogg's


in the US as well as another rival, Burton's. It was a welcome tested


auction, but it is hard to find global iconic brands. When we came


to market it was a fierce contest and the Turkish prevailed. How did


you get into crackers and biscuits. You're a Pepsi man! I was a banker.


I was always introducing clients to do deals, but I wanted to be in a


company that made things and what better company than a company that


loves snacks. I love the products and you can't meet a person in the


UK that hasn't eaten the product and enjoyed the product and has an


opinion on it. It made me popular with my kids' friends!


They all want to come over to your house. Always something in the


cupboard. I have been there 11 years and I've really, really enjoyed it.


What are the challenges for you? It is an industry you can't sit still,


you have got to be thinking of the next new thing because there is so


much competition out there? Yes, that's true. We are against the big


global giants, we have to continually innovate and lower our


cost base. A cracker is a cracker, isn't it? A cracker is a cracker, a


biscuit is a biscuit, yes? A cracker is a cracker and you have got


digestives, been on the market for 140 years, loved around the world,


Carr's table water crackers and you come up with new things. If


consumers want healthier savourier snacks with great taste. We are


going to be nutritionally advantaged because we are baked as opposed to a


fried snack. When you come up with new things, who is in your mind? Who


is your customer that you think of when you think of the new product?


Is it the mum? Is it the child? The mum tends to be the gatekeeper. But


we analyse consumption trends carefully. We look at what


consumesers do, when they eat and why they eat and we do this over the


world, a digestive in Italy will tend to be consumed at breakfast. We


look carefully, consumer tastes are similar, but how and when they eat


the product can be dimp and that's where we have to market the product.


Every time we talk, that is a cracker! Every time we talk to a big


boss from a company that makes stuff in the food industry, we talk about


China and it is interesting when China or the Chinese get an appetite


for a western product, boy it flies off-the-shelf. The price goes up


sometimes as well. Dot Chinese, do they have an appetite, do they like


a cracker? They love crackers and they like biscuits that aren't as a


sweet. That's the beauty of a digestive. It is not overly sweat


and that plus the natural goodness of the natural digestive because it


is high in whole grains and it makes it popular. Who to what extent are


you selling the US? They like sweater things there and their taste


buds are different? They do, but we sell Carr's table water there. They


like that. Posh crackers. One of the beauties of biscuits, they are


affordable. They offer great flexibility and taste and ?1. I was


going to say 99 pence typically from one big supermarket here. Yes. They


are great. What's the growth market? What's the


footprint like? The developing markets are the fastest growing. We


have quadrupled the size of our international and we focussed on


China, the Middle East and Africa and Africa is booming for us. Is


there a time of year that's important to you? Like now, I see


you've got festive faces here. Or is it just throughout the year? I


presume it is throughout the year? It is throughout the year and it is


throughout the day and that's one of the great characteristics of our


category, but festivals are big. The UK, Christmas is huge. We do packs


for divalley in India and packs for Ramadan in the Middle East. Jeff, it


has been a real pleasure. Thanks for lunch, breakfast, lunch and dinner!


That's all from Business Live. We will see you soon. Bye-bye.


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