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This is Business Live from the BBC with Sally Bundock and Ben Thompson.
Big tobacco versus the European Union.
The two sides battle it out over health warnings, graphic images
Live from London, that's our top story today, Wednesday, 4th May.
The big players in the tobacco industry have joined forces
to oppose an EU ruling, but can they hold back the tide
of regulation as pressure mounts to crack down on smoking and put
Also in the programme, when is an iPhone not an iPhone?
Tech giant Apple has lost a trademark fight with a handbag
maker in China over the name of it's most well-known product.
We're live in Beijing with the details.
And markets are bouncing higher in Europe but with mixed
earnings news we'll talk you through the winners
The firm that lost it's way is back on track.
The Co-Founder of sat nav giant Tom Tom will be here in the studio.
As Donald Trump effectively seals the Republican nomination
in the race to become the next US president we want to
know if Business people make good politicians?
Will tobacco firms be forced to sell their products in plain packaging?
They'll find out later whether new EU rules
Philip Morris, British American Tobacco and Imperial Tobacco have
all joined forces to attack the legality of the ban
which the European Union hopes will cut the number of people
smoking across Europe by 2.4 million.
The Smoke Free Partnership, which is part funded
by the European Commission, say smoking costs the EU
The new rules, voted on last year, included a ban on flavoured
cigarettes, a ban on so called "lipstick-style" packs aimed
at women and the requirement for 65% of each packet sold
Crucially the commission also said that plain packaging could go ahead
when "justified on grounds of public health".
Europe's highest court will rule today on whether or not the EU's
actions are "proportionate" and if they work against the single market?
With me is Shane MacGuill, a tobacco analyst with
Let's talk about the ruling. Which way are we expecting it to go. We
have had an indication from the EU about what they are thinking? The
advocate general ruled against the tobacco industry changes. It is part
of the rising tide of regulation around the world, not just in Europe
against tobacco firms, we have seen strict rules being enforced on them
in other parts of the world. And it strikes me there is only one way for
this to go, so it is about how the tobacco companies deal with it
rather than trying to win any big concessions? They recognise the tide
is moving out for them in terms of regulation. Today's judgement will
be another case in terms of the idea that the health objectives that
regulators is primary to the ability of the tobacco industry to generate
revenue. The industry want to manage the regulations that they're faced
with across the world and minimise the effects on their own business.
What is more damaging to the tobacco firms? Is it the graphic images that
we see on some cigarette packets in some parts of the world or is it the
concept of plain packaging? I would argue that plain packaging is more
detrimental to them because it removes any capacity that they have
to communicate with consumers. Graphic health warnings, although
they are extensive and they must have some effect on smokers, allow
room for branding of the product. So plain packaging which inhibits the
industry from communicating with consumers or smokers is more
damaging to them in the longer run. Of all the images where brand
something so important, the tobacco industry, it is key, because that's
what allows them to charge higher prices and allows them to have the
lifestyle that's built around a certain brand and why people choose
one or other because essentially the product is pretty much the same?
Some of the iconic significant Bretts are iconic globally. It is
something they need to generate brand identity to create more
revenues. Briefly, just a last thought, as that screw tightens in
Europe, the push into emerging markets for ta bobbing co firms will
be more important than ever? It becomes increasingly important. They
are looking at markets where regulation is less restricted and
where tax is lower and to have that leverage to continue to build brand
identities and engage consumers will be crucial for them going forward.
Absolutely. We will keep a close eye on things from Europe. Shane, for
now, thank you. Donald Trump has become the US
Republican presidential nominee in all but name after victory
in Indiana forced rival Mr Trump, unpopular with many
in his own party, now has a clear path to the 1,237 delegates needed
to claim his party's crown. The oil giant Royal Dutch Shell has
published first quarter earnings down 83% to $814 million,
down from $4.8 billion in The oil giant says capital
investment in 2016 is now more likely to be $30 billion rather
than previous guidance Fiat Chrysler has announced a deal
with Google to double the size of the tech giant's fleet
of self-driving cars. Fiat will supply 100
Chrysler Pacifica vans and provide engineers to help
integrate the technology. Prosecutors in Brazil have filed
a $43.5 billion civil lawsuit against iron miner Samarco,
and its owners BHP It follows the collapse of a dam
they owned that caused a massive Let's take you to the live page
and killed 19 people. Let's take you to the live page if
it is working. It has been difficult this morning. Let me see whether it
It has got frustrated. There we go. It has got frustrated. There we go.
It is loading up. The live page is a place to get all the news that we
don't have time to cover on the programme! Wets can't show you
either! It is taking a long time. Have some patience. It is there. It
is there. All the reaction to stories, of course over the morning,
dominated by two things in the UK, Sainsbury's results, we will touch
on those later and also the retailer, Next too, but Shell also
there. We've touched on it. First quarter earnings falling 83%, coming
in at $814 million. Apple has lost a trademark fight
in China, meaning a firm which sells handbags and other leather goods can
continue use the name "iPhone". A court in Beijing ruled in favour
of the Chinese technology company, which trademarked "iPhone"
for leather products Stephen McDonell is in
Beijing for us. Stephen, just explain this for us. A
leather goods manufacturer wants to use the name iPhone, why? Well, on
the face of it, it does seem bizarre, but it makes legal sense.
Local Chinese company, has beaten Apple in court over the right to
sell its leather bags, calling them iPhone. These are bags, you might
put a laptop in or a phone. Letter bags. Apple took them to the local
trademark authority and lost. Took them to a local Beijing court and
lost again. Now in Beijing's high test court, lost a third time.
Crucially, what Apple was not able to prove is that in 2007, it was
already an established famous brand here when this Chinese company
lodged its registration because it didn't start selling iPhones here
until 2009. So they have it, Apple lost. People are able to come to
China now and buy a perfectly legal iPhone leather bag which has nothing
whatsoever to do with Apple. Stephen, an intriguing tale, thank
you very much. It sounds like a David and Goliath story, doesn't it
and in this case, David won. Hong Kong is down 1% and you can see
behind me, the night before was grim on Wall Street as well. As was it
was in Europe too on Tuesday. All because of the bad news about
economics. Eurozone growth forecast lowered. Also concern about China
and that's really dampened sentiment. So what's happening now
in Europe? Well some of the main markets in Europe are bouncing back
after heavy falls, but not so for London, the DAX down a bit and the
CAC flat. Shell's shares, there is a tongue twister, they're up slightly
in London because their news is better than expected. BHP Billiton
shares down and falling now in London too off the back of the news
we mentioned about the mine in Brazil and prosecutors hitting them
with big sums of money. So lots to talk about in a few minutes with our
markets guest, but for now, let's hear from Michelle on what we can
expect on Wall Street today. The earnings parade continues this
Wednesday. One of the most highly anticipated is the first quarter
results from at thes lard want expected loss Teslar, investors are
beginning to ask is it its share price too rich? This is time for the
maker to prove doubters wrong. Turning to the media, CNN maybe
beating Fox News when it comes to ratings in the United States, but is
the same true for their respective parent companies? 21St Century Fox
is expected to report a rise in profits and a rosy picture is
forecast for Time Warner which owns CNN. Teeing up Friday's Government
jobs data, watch out for the latest snapshot from private employers.
Joining us is Maike Currie, investment director
Let's pick up on Shell and the interesting thing about Shell is
cutting that expenditure for the year.
About 10% in Shell's case, it is a big difference? It is a big
difference and what we have seen over the last two years, almost two
years, these oil companies fighting the low oil price and of course,
companies like Shell and BP being the big boys are better positioned,
but even they are struggling now and the big question for a company like
Shell is how sustainable the dividend is, the income payment is
that the company makes to shareholders. Shell hasn't cut its
dividend since the Second World War. If the woes continue with oil price,
this comes into question. It is the first set of numbers from Shell,
isn't it, since their 15th February deal with BG Group. Shell being
transformed in many ways, not just by the lower oil price? Absolutely.
That deal with BG divided Shell. Some said, will it add value to
Shell or will it take value away from Shell? It will be interesting
to see where Shell goes from here. Short and sweet, but we'll talk more
about Donald Trump, of all things, later in the programme, but for now,
thank you. The head of Tom Tom will be
here to give us the Inside Track on how the company's been
rebuilding its business after Google shook up the market
with its free mapping app. You're with Business
Live from BBC News. Profits at the supermarket
Sainsbury's have come in better than expected,
but still mark a second The company made a full-year pre-tax
profit of ?587 million compared Our Business Editor Simon Jack joins
us from the Business Newsroom. Simon talk us through these. We look
at this closely the rivalry between the supermarkets and the battle with
the discounters? It will have declining sales. Food
prices have fallen 4% over the last two years and if you add that to the
white hot competition it is getting from its noisy neighbours, Aldi and
Lidl it has been a difficult period indeed. Sainsbury's has been
resilient against the newcomers and has held its market share stable at
16.5%. It bought Argos. So people will now be looking at how it
executes on that strategy. A tough time for supermarkets. A good time
for shoppers during this food deflation, but Sainsbury's is
holding its own. Shares off a little bit, but it has done better than
some. All right, Simon, thank you very much.
Simon Jack joining us from our business unit.
the tablet is working, so I can show you some of the news, including news
from the payday loans firm Wonga. It is reporting pre-tax losses because
of reduction in UK consumer lending volumes, as it calls it, but it is
basically the tougher lending criteria. It is also saying it is
trying to be more responsible about who it is lending to. Looking at
some of the other stories on the Business Live page. What is going
wrong for Next? Coming through with numbers not so good this time.
Our top story: Tobacco giants are in court today in a final
attempt to reverse the EU's Tobacco Products Directive.
The new rules would mean that cigarettes will have to be
sold in packs of 20, and 65% of the packet must be
There is also debate about entirely plain packaging.
Now, it wasn't too long ago that the paper maps were king,
and rows over which route to take were common.
All that changed, though, with the advent of the sat nav
Tom Tom was one of the firms that led that revolution.
In the final quarter of 2007, the firm made $124 million,
But it didn't take long for things to go wrong.
Two years later in 2009, the company made a loss
of $43 million in the first quarter of the year.
Well, the market was turned upside down almost overnight by Google's
decision to start offering a free mapping service for phones.
Since then the company has undergone a bit of a revolution,
and now has a deal with Uber to provide it with digital maps.
As well as traditional mapping tech, the company has also been branching
out, launching a range of gadgets from smart watches and fitness
Corinne Vigreux is the co-founder of Tom Tom, and she joins us now.
Good morning, nice to see you. Let's just talk about this. It was a fall
from grace, you were doing so well at the top of the market, Tom Tom
Rumack were revolutionising the way that we made our way around the
world, but overnight, things changed, Google launched its free
app. Not only that, 2008 was a perfect storm, there was the crisis,
we had found that the level of penetration of the sat nav is was
quite high. So we had to reinvent ourselves. We knew we had to
diversify, and we acquired a competitor. Our aim was to be the
best navigation, to know the road the best on the market, and we
started working on big technology that today is going to help us be a
major player in driverless cars, so we have invested a lot of money in
knowing every ten centimetres of every road in the world. But you had
the likes of Google emerge, and that came already on people's smart
devices, but also car manufacturers as well were putting sat nav devices
as a part of the car, so you no longer need to get a Tom Tom. That
is true, but we are still selling a lot of devices, in Europe we sell
more than 4 million per year, and in the UK, last year, and in Germany,
the sales of sat nav stabilised. So there are still a lot of customers
valuing the independence of a sat nav in the car, no roaming charges,
never out of coverage. And Tom Tom has been working along time on
routing and traffic information, it is still the best on the market
today. How would you differentiate yourself from something that is
provided for free and you are asking people to pay a couple of hundred
dollars for it? If you have a telephone, you have to connect, you
have to be online to be able to download information. With the Tom
Tom, it is a no-brainer, it is dedicated navigation, and we keep
working really hard to make that the best it is, and it was interesting
in London yesterday, to see all of those cabbies using our products,
and that was the testimony that they are the best product on the market.
You have launched a lot of new devices, some of them smart devices,
but you are also looking at the driverless car. Yes, it is quite
nice to have made it to the dictionary as a synonym to sat nav,
we got voted yesterday, top 50 gadgets in the last century, so it
is very flattering, but at the same time, we focus on the next 25 years,
and I think we were be playing a major role in the way we move in
cities in the next 25 years and in bringing technology for self driving
cars. If cars are driverless, they need external information. Yes, it
is a mix of sensors, but they need to know exactly what is happening on
the road, and we are working on 3-D high-definition road mapping, and
you need that when you don't have a driver behind the wheel. Do use the
voice of Darth Vader for one of your Tom Tom? I was told by one of my
presenter colleagues. Yes, Bart Simpson. We have got them all. You
should have a Ben Thompson voice, maybe. I hear enough sallied undock
voice right next to me. It's now just 50 days until polling
stations open for the UK's But when it comes to the business
debate, it's easy to focus on the powerful voices
behind billion dollar companies - but the majority of UK firms
are actually small and medium sized The BBC has been scouring
the country to find out what EU membership means to small businesses
- those on the front line. My name is Bethany Sawyer. The
company is called Bio farm UK Limited, and we distribute leeches
to hospitals. They are used in post-reconstructive surgery, so it
is if you are reattaching a limb, a digit, a skin draft. At the moment
there is a clause which means that because leeches have been used for
so long in medicine, we are able to supply them without hassle, however
I do think there is a definite move towards more and more EU medical
device regulation. There are several medical device directives coming
out, more in the pipeline, so the longer we stay in the EU, the more
complicated it will get for us. It would mean we potentially face
submitting massive amounts of paperwork to supply with the EU
medical device regulations, and that is a considerable cost, a
considerable addition to your overhead.
Tune in tomorrow where we'll be speaking to another small business
with a more favourable view on EU membership.
And of course you can find more from our series "EU: Business Talks"
A quick update on the story at the start of the programme, the ruling
from the European court of justice in the European union related to the
tobacco companies. The court has ruled that the new EU directive has
tough rules and is valid, and it will allow member states to
introduce further restrictions, including things like plain
packaging, the ban on things like menthol cigarettes, and graphic
warnings on packages. The advocate general gave his advice some weeks
ago saying that he felt this was the right decision, so it comes as no
surprise. That is the decision just fruit from the European court of
justice. We asked you to get in touch to tell us whether you believe
business leaders make for good politicians. This is following
Donald Trump winning the last element in the race to become the
nominee for the Republican party. We will discuss that in just a moment,
but just run through some your comments. We like this one: It says
that you two, referring to Sally and I, no more about business and would
be better politicians than Donald Trump! And one from Ryan who says,
Mike Bloomberg is an example, but he is the exception. Let's
Maike Currie, in reintroduce vestment
what you think of Donald Trump? It is staggering that he has come from
this far, and now we have the firing gun in one of the most ugly
presidential races, because both candidates have very un-favourable
ratings, so it will be interesting. And what is so interesting about
Donald Trump, he has got to the position he has done because the
media is assessed with him, but also coming out with radical statements
on immigration and health care. But the trick then is getting any of
those into policy if and when he wins the presidential race. It is
one thing having those views, it is another making them into policy.
That is a key point, because there is a difference between a highly
charged presidential race and actually being the President. The
way the American political system is set up, you have Congress, the
Supreme Court, and all of these bodies serve to put grit in the
wheels, so it is difficult to get policies through. And thinking ahead
as well, we have about 20 seconds left, so we can't say very much, but
a lot of discussion in the market again about US interest rates and
when they may change. Does this have any effect on that at all? US
elections really don't have a big impact on the market, but June is
the key month, the later part of June, we will see whether the
announcements on interest rates, and more policy and central bank.
Morning. This coming weekend should see the warmest weather of the year