04/05/2016 BBC Business Live


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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




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