16/02/2018 BBC Business Live

This is Business Live from BBC News

with David Eades and Ben Bland.

Has Coca-Cola lost its fizz?

The world's biggest beverage maker

reports results in a few hours -

amid a 12 year decline

in soft drink sales.

Live from London,

that's our top story on Friday

the 16th of February.

Consumers are choosing

healthier options -

which is good for the waistline,

but bad for companies

like Coca Cola's bottom line.

Also in the programme, shampoo,

deodorant and other household

products could be as hazardous

to health as car emissions,

a new study has found.

We'll find out more

in our paper review.

As for the markets, let's look at

how the European markets and the

FTSE have opened, around half a

percent, following on from

encouraging signs from the Nick

Cave. -- Nikkei.

And we'll wrap up the week's

big events with our

economics correspondent -

including what's ahead

for South Africa's new president?

What's waiting in his

economic in tray?

And we want to know have you ditched

fizzy drinks and what are you having

instead to quench thirst? No fizzy

drinks, just coffee, ignored the

three sugars! Contact us.

Hello and welcome to Business Live.

When it comes to our eating habits,

it turns out that many people

are choosing healthier options -

or at least cutting

back where they can.

But for a company like Coca-Cola,

does a shrinking waste-line mean

a shrinking bottom line?

Just to give you an idea,

one can of Coke has about seven

teaspoons of sugar in it -

and it accounts for 139 calories.

That's about the same

as eating a Daim bar!

Americans are definitely

cutting back.

In 2016, soda sales hit a 31-year

low in the United States.

Coke will be reporting earnings

in a few hours' time

and expectations are that revenue

will fall 21% in the last

three months of 2017.

So the world's largest beverage

company is looking to expand further

into sugar-free alternatives

and bottled water.

But will that be enough?

Thank you.

Andy Morton is news editor

of the online trade

magazine Just Drinks.

Good to have you with us. Already

the tweets are coming in, including

Edward, I saw the line, ditched

fizzy drinks, have swapped it for

glasses of water bodies that where

the problems lie?

Partly, it's

something that's been ongoing for

the past picked, people drinking

fewer sodas and turning to healthier

alternatives.

The drinks companies

are aware of this, it's not a sudden

thing happening overnight, it's been

a long-term health push, the Rabin

government campaigns, health kick

campaigns...

Absolutely, Coca-Cola

and the drinks companies know about

this and that the past 5-6 years

they've been trying to buy as many

new and trending products as

possible. For example they bought

coconut water, sparkling water, and

they have also what plant -based

drinks such as soya -based drinks,

those kind of things, on trend,

things that have less sugar and that

people want to drink.

On trend is

one thing, persuading people is a

long-term buy, they know that

Coca-Cola sells, but it's on the

decline, what do they do?

What they

do is they tried to convince people

that Coca-Cola is still a rewarding

brand...

It is for them.

It is still

a massive moneymaker. They don't

want to ditch it, it's still the

Crown Jewels, what able trouble they

do is reduced packaging sizes,

they've been doing that for the past

few years, you will have full sugar

drinks in smaller packages, it's

seen as and we'll be seen more as a

luxury, and indulgence. We have seen

what some people are

calling the adultification of drinks

like Coca-Cola, making them sleeker.

We have seen some bigger companies

like Pepsi, moving into things like

Kraft sodas, to see if that will

work. What has happened in the beer

industry, trying to replicate it in

the soft drinks industry, but it's

still early days.

What do you think

the future is, are we likely to see

consolidation, companies merging to

survive?

That's something that could

happen, Coca-Cola, always rumours

floating that a bigger company is

going to buy it. There are these

larger companies, owned by a large

private equity firms, these are the

kind of companies that may in the

future look to buy Coca-Cola, Pepsi

Cole have lines in food and drinks

business, they could divert the

businesses, food going one way drink

scoring another.

Let's take a look at some of

the other stories making the news...

Theresa May is due to hold talks

with German Chancellor Angela Merkel

today as she seeks to make progress

on negotiating Brexit.

The UK PM is expected to set

out her vision of how she wants

the financial services to operate

once Britain leaves the EU.

This comes a day ahead of a speech

on Saturday in which the British PM

will set out the security

partnership she wants

to maintain with the EU.

French car giant Renault has asked

Carlos Ghosn to stay on as chief

executive for a further four years.

If approved, he would also remain

on as head of the world's

biggest automotive group,

which also includes the Nissan

and Mitsubishi brands.

US regulators have rejected the sale

of the Chicago Stock Exchange

to a group led by Chinese based

investors, over concerns

with its ownership structure.

The deal has drawn criticism from US

lawmakers who questioned the SEC's

ability to regulate the foreign

buyers if the proposal

was approved.

Japan's government has today

nominated Haruhiko Kuroda

for a second term as the country's

central bank governor.

The decision is being seen

as an indication that the country

is in no rush to dial

back its massive stimulus programme.

Let's go to our Asia business

hub where Sarah Toms

is following the story.

Tell us more.

How is this going

down? It's been a good day for

Japanese markets, investors

breathing a sigh of relief. The

markets up just 1%, the yen is the

strongest in 15 months up against

the US dollar, showing investors

want continuity over change.

Kuroda has been key to the success

of the Japanese Prime Minister,

needs approval from both houses, but

there is a comfortable majority

silver should not be a problem but

in his new term there are a couple

of problems he will to deal with,

and although Japan is out of the

dangerous cycle of falling prices,

inflation is not yet at the target

2% in the second problem he must

sort is how to figure out how to

exit from the stimulus programme.

Thanks very much. Let's look quickly

at the markets. On the Nick Cave...

Up just over 1%. -- Nikkei. Things

going in the same direction within

the Japanese economy. The markets

here in Europe... London, the FTSE,

all opening up around half a

percent. A little bit more

correction to the big correction

taking place there.

Now the details about what's ahead

on Wall Street Today.

On Friday Kraft Heinz,

known for its ketchup,

Jello and Kool-Aid -

and for its brutal

cost-cutting regime -

is expected to report an increase

in profits for the past year.

The company, which is partly

owned by billionaire

investor Warren Buffett,

attempted to buy consumer goods

giant Unilever last year,

only to be quite swiftly rebuffed.

And the world's largest soup maker,

Campbells, whose iconic tins

were immortalised by Andy Warhol,

is expected to report a drop

in second-quarter profit.

It's been hurt, in part,

by harvest delays of one

of its key ingredients,

carrots, in California.

And Wall Street will be watching

to see whether monthly home-building

data picks up after a sharp

fall in December.

A fall in demand for homes can

have a ripple effect

on the construction industry,

on employment and the

wider retail economy.

Shaun Port is chief

investment officer at Nutmeg.

Good to have you with us. The UK is

trying to ensure it has alignment of

financial rules with the EU post

Brexit, why is that so significant

and how could it affect our kids?

Financial services are a big

employer in the UK and a bigger

contributor to the budget, with tax

receipts. Under EU rules there is

something called equivalents, we

could have similar rules covering a

third financial services and the EU

could revoke that with 30 days

notice. It's important to UK gets

alignment on the rules so financial

services can export to the EU.

It's

early days. Getting the ball rolling

with mean something.

It's

significant, the first time we've

heard anything from the government

on financial services given how

important it is to the UK economy.

Some things the UK needs to sort out

with the EU, probably a deal will

not happen until the last minute.

Just mentioned earlier the bank of

Japan, the governor staying in situ,

that seems to have gone down nicely,

it's part of the pattern and

therefore important.

Yes, it's good

news, it was expected, taken off in

extra area of risk, the Japanese

economy performing the strongest in

28 years, nearly Shinzo Abe wants to

continue the strong progress. It's

also very good for financial

markets, and mortgage rates here, it

has an impact, would you believe?

Right significant. Likely to be

disappointment in China over the

blocking of the Chicago stock

exchange, what do you think is going

on?

It's the continuation of the

theme, purchases blocked, some

things in telecom, continuation of a

theme along the lines of President

Trump protectionist policy, anti

China when it comes to trade deals.

Continuation of a theme.

We will

continue to watch. Thank you. Still

to come.

We catch up on the week's

business highlights -

including stellar growth

for the Eurozone.

You're with Business

Live from BBC News.

Mid-earners have being locked

out of buying a home,

according to a report out today

from the Institute

for Fiscal Studies.

With those aged 25 to

34-years-old hit the hardest.

Joining us now is Jonathan Cribb,

a Senior Research Economist

at the IFS and author

of the report.

In some ways no surprises here,

really?

I don't think it's a great

surprise what we found but I think

it's important that we work out

exactly who is being most affected

by the increase in house prices that

has gone on in the UK over the last

20 years. And quite how that has fed

through to much lower home ownership

rates for mid-income people.

In

terms of the scale of all if you

like, the number of people looking

to buy, how dramatic is this?

It

really is romantic. For middle

income people, 20 years ago, about

two thirds of young middle income

people owned their own home, now

it's done to just over a quarter.

Look across the UK, falls by ten

percentage points or more in every

single region with the largest falls

coming in the Southeast, evolve from

about 64% down to 32% over the last

number of years.

How much further is

the curve likely to go down?

Hard to

predict exactly. Some reasons to

think this fall might slow. In the

regions and nations of the UK,

except for London and the south-east

over the last ten years there's been

relatively little rules in house

prices when compared to incomes. You

might think the fault would continue

to slow down in those regions but in

London and the south-east, has

prices are outpacing income growth

and so we might continue to see

falls for those regions.

I prices

and growing interest interest rates,

thank you. Plenty of business

stories updated throughout the day.

Right now, dig up a road, pay a

fine, for those who hate those

roadworks, those interminable

roadworks. Councils can start fining

utility firms who dig up roads and

cause traffic congestion, read more

about that and Brees a sigh of

relief. That's all on the business

news online.

You're watching Business Live.

Our top story -

is Coca-Cola losing its fizz?

The drinks giant is releasing

its 4th quarter results in a few

hours amid a 12 year decline

in the US market for

carbonated soft drinks.

Let's look at how the markets in

Europe are faring. All of them are

in positive territory across the

main markets. That is the pound

against the dollar, well above the

$1.40 mark.

And now let's get the inside track

on this weeks big business stories.

Andrew Walker our economics

correspondent is here.

The bond markets, T-cell off. Tell

us more?

Particularly in the United

States. We had news about inflation

in the US, people were expecting

Consumer Price Index inflation to go

to 2.9%, it didn't. That led

investors to think that maybe the

outlook for interest rates, the

Federal Reserve, is for more

increases than we were currently

expecting. As a result, bond yields

were rising, the longer term

interest rate which partly reflects

what people expect is going to be

the path of the Federal Reserve

interest rates over the coming

years. It is quite a move upwards in

what it costs, basically, to borrow

in the US.

You mentioned the

inflation rate in the US coming in

higher than expected. Normally,

people would conclude that increases

the likelihood of interest rates

going up and that then pushes the

dollar up?

It is more attractive to

invest in assets in the dollar.

But

it hasn't had that effect?

The

immediate impact was exactly what

you would expect, the dollar going a

little bit. It quickly reversed that

entirely. There was a bit of

reaction to retail sales figures

that came out the same time, and

perhaps there was a reflection that

we shouldn't attach too much

significance to one inflation

number. The Fed will be looking at a

lot of other things before it makes

a judgment on what to do. It is

striking, over the last year, the

dollar has actually been weakening.

Looking at what happens with

interest rates, you might expect it

to be moving in the opposite

direction. There is a bit of a

puzzle. There are theories about

what is going on, but it is not

absolutely clear.

We have spent so

much time focusing on South Africa

this weekend, we should perhaps look

at the economic prospects for a

country that has been considered not

far short of basket case by some

people. Have we suddenly had a flip?

Can you see investment rushing in,

great excitement?

Well, the markets

did respond positively to the

political development is. We had an

increase in the value of the rand,

quite a significant spike in the

Johannesburg stock exchange. The way

I put it is that they think the new

President has got a fighting chance

of making a worthwhile difference.

It is a big call to say that one

change of regime is really going to

fundamentally change everything.

Clearly, there must be hope. But you

are absolutely right that it has

been a pretty dismal period for the

South African economy. The average

growth over the last ten years has

been 1.4%. An emerging economy like

South Africa should be managing 4%

or 5%, that is what Malaysia and

Turkey have managed over that

period. China has done a great deal

better than that. It has absolutely

dreadful story to tell about

equality. We are far enough on from

the days of apartheid to hope that

they can bring it on. No question

that the President has a big agenda.

He also has some belief among

investors that he has got a chance

of making some progress.

And the

rand strengthened. Even with the

best will in the world, suddenly

coming into office with clear ideas

about how to tackle the problems, it

is going to take time to turn it

around?

And there is a formidable

agenda. Dealing with the government

finances, which are a bit weak, but

not catastrophically so, is easy. We

are going to have a budget quite

soon. There is an opportunity for

the regime to make progress there.

There are things like educational

reform. South Africa is a terrible

problem with many people who do not

have the basic skills they need to

make a really strong contribution to

the labour market. That partly

reflects the fact that a lot of

their teachers were themselves and

educated because they were trained

under apartheid. Dealing with that

kind of thing, absolutely, it takes

years to turn around.

Can I ask you

about the eurozone? It has been more

buoyant than previously, is that

going to continue?

The outlook is

pretty good, we saw the economy

growing a respectable 0.6% in the

final quarter of the year. Every

individual economy in the eurozone

we have had so far, the breakdown is

not compete so far, but every

economy was in positive territory. I

think there is cause for moderate

optimism. But there are weaknesses

in the eurozone, let's not get

carried away!

Good to see you.

Today is the first day

of the Lunar New Year -

it's the biggest holiday celebrated

in countries like China, Vietnam,

South Korea, and Singapore.

And with the new year comes

a new Chinese zodiac -

the Year of the Dog.

Will it be the investor's

best friend?

Our reporter Leisha Santorelli met

with Chinese astrologer Joey Yap

to get his predictions.

We are doing this interview in a

special place, Singapore's biggest

dog resort. That is because we want

to get your predictions for the

Chinese year of the dog.

There are

many types, some are like this,

docile, happy and friendly. There

are dogs that are fierce and noisy.

This one is fierce and noisy, right?

You might get some volatility, a lot

of challenges, a lot of fights, just

like how an aggressive dog would be.

In the last few weeks we have seen

extreme volatility in the stock

market. Can we expect that to

continue?

At least for the first

half of the year.

For the global

economy, what is the outlook?

In the

year of the dog, the strongest

element is wood, so those related

industries will be the strong as

headlines, agriculture, education,

palm oil and coffee, they are all

related to wood. The second element

is fire, so that as technology, oil

and gas, and we are seeing a return

on that now. That is the peak of

fire energy.

That was Joey Yap on the year of the

dog. Happy Chinese New Year!

We're going to look at some of the

tweets coming in with regard to

Coke, if it is good for you or bad

for you, if you are drinking less.

We gave them a bit of a hammering.

Adam says Coke Zero four May, with

lime, it tricks me into thinking it

has sugar, but I don't read that

often.

Another, I have not had fizzy

drinks for about ten years. Water,

coffee or alcohol. Perhaps not the

healthiest, but there you go!

Alcohol with fresh fruit juice seems

to justify it.

I think the one that

caught my eye is only tonic in a gin

and tonic.

Lynne said she stops flu

stopped smoking and is now addicted

to Coca-Cola. Nicholas says tap

water, black coffee and black tea.

Where is the joy in that?

We should

have Alan Haselhurst. He is a

Coca-Cola nut.

Let's look at some of

these stories. The household sprays,

apparently that is as bad as air

pollution?

Startling story, very

interesting. In LA, apparently

pollutants from household product is

a greater source of pollution than

cars. 42% of emissions are coming

from household products, sprays,

perfume is and the like. The

interesting facet of the story is

that it is bringing more awareness

that the things we buy have a

significant impact on the

environment, like water bottles.

Part of it is that there is a good

news element, that emissions from

petrol and diesel, the improvement

is so significant that it is

bringing it on a park, in terms of

these particular emissions. But what

struck me is that this includes

shampoo, products you just think are

clean and good for you. If we are

currently take it seriously we have

to have a fundamental rethink?

These

chemicals are designed to evaporate,

we do not see them. They are

designed to go into the environment.

There are some businesses that just

cannot's I mean, hotels, the

turnaround is they have four rooms,

they have no choice but to ask staff

to use these sprays, bleach,

chemicals.

That might be a marginal

case, but everyday household

products we can move to

environmentally friendly versions.

This one is on the BBC News business

page, £10,000 for everyone. Sounds

great? Anyone under 55, reports

suggesting if they introduce this

new universal wage to deal with the

threat to jobs, from automation?

Automation is an interesting angle.

It is for over 55s, the idea of a

basic income is attractive to

economists. How it would be funded

is quite difficult. Looking at the

Norway model, they have a lot of oil

receipts, very different from here.

Attractive for commerce, difficult

to abhorrent.

And they have a small

population to deal with, which

helps, the Norwegians. Have a lovely

weekend.

And a great weekend to you

as well. We will be back soon.

Goodbye.