06/03/2018 BBC Business Live

This is Business Live from BBC News,

with Sally Bundock and Ben Thompson.

Tackling the tariffs -

carmakers meet in Geneva

for the world's largest car show,

but they face a battle over

President Trump's promise to impose

tough tax on foreign-made cars.

Live from London, that's our top

story on Tuesday 6th March.

America is the most valuable market

for European car exports -

so how will car markers respond,

and does it really help US

manufacturers as much

as President Trump has promised?

Also in the programme...

Cut out the calories -

food manufacturers, supermarkets

and fast-food chains are told to cut

fat in food or face legal action.

And from farm to fork.

-- and financial markets are riding

high in Europe following a bumper

session in Asia. We will explain

why.

And from farm to fork.

We'll get the inside track

on the app that puts farmers

directly in touch with customers,

cutting out the big supermarkets.

We'll assess what it means

for prices and pay for farmers.

And with that warning to food

producers we want to know,

is the food industry cashing

in on sugar-loaded, unhealthy food?

Let us know, use the

hashtag #BBCBizLive.

Hello and welcome to Business Live.

Are you a foodie or do you have

strong opinions about food? This is

the programme for you, get in touch

with your comments.

The Geneva Motor Show starts today.

It's the largest event

of its kind in the world,

bringing together manufacturers

and petrol-heads from

all over the planet.

But among the glitzy product

launches, one topic of conversation

is likely to dominate -

President Trump's threat

to impose tariffs on imports

of European cars to the US.

So what is at stake

for the car industry?

Well, if we take a look

at the current state of play,

the United States already imposes

a 2.5% tariff on cars

assembled in Europe.

That is 2.5%.

Meanwhile Europe imposes a higher

10% tariff on US-built cars.

Cars which are then brought into

Europe.

But many German firms -

like Daimler, BMW and VW -

already build many of their vehicles

at plants within the United States.

In fact, Germany's car body,

the VDA, said their factories

in the US made 804,000 units last

year - way more than the 494,000

exported from Germany.

Quite interesting when you look at

the facts. Over to you, Ben.

Andrew Walker is with me now.

He is our economic correspondent.

You start getting into tit-for-tat,

you impose this, we will impose

this. When we talk about tariffs,

though, people will say it is bad

for business?

Of course, it makes it

more expensive for people buying the

stuff that is imported and means a

lower pre-term for the exporter in

the foreign country. The real

economic burden does not depend on

where you collected from, it is

divided between buyer and seller in

that way. There is no question that

ultimately if you were to see a

sufficiently large escalation in

tariffs, you could see quite

significant macro economic damage

done around the world. We are not

there yet, but clearly the worries

about that are in play at the

moment. We have a system of rules

for managing international trade,

policed by the World Trade

Organisation, and the forces that

brought as the WTA in the first

place, going back to the aftermath

of the Second World War, they were a

desire to avoid the tariff

escalation we saw during the 1930s.

The potential costs, if it seriously

got out of hand, are very high, but

we have not got there yet.

Despite

that, President Trump says it is, in

his words, putting America first and

protecting jobs in the United

States. Some would say is that a

price worth paying, it helps protect

jobs in America?

When you impose a

tariff on one thing going into the

United States, you are raising costs

for everybody who buys that stuff.

It means the domestic producers can

raise their prices so if we are

talking about steel and aluminium,

car-makers will have to pay more for

their steel and aluminium raw

materials, whether they are buying

from American suppliers or importing

it. You might be able to save jobs

in one area but there are

significant risks you will leave

jobs -- lose jobs in other areas.

What does this tell us about the

nature of the business in the United

States and firms that want to do

business with the US?

Many of the

big manufacturers are very much

international businesses and it is

fair to say that some of them

clearly get benefit from terrorist

protection. The big industrial

players are increasingly keen on

Terror free trade. So many have

international interests, production

operations abroad, and they are

likely to move their goods easily

and cheaply across borders.

Good to

see you, thanks for that, Andrew

water. -- Andrew Walker.

Let's take a look at some of

the other stories making the news.

Facebook has hired the former

head of BuzzFeed Studios

and a former Pinterest boss

to join its video team.

The firm says Matthew Henick

will lead its global video strategy.

While Mike Bidgoli, who managed

Pinterest's ads, will lead

Facebook's Watch product team.

In the UK, concerns over Brexit -

and the fear it will make

Brits less well off -

has dampened household spending.

According to Barclaycard,

annual consumption growth slowed

from January as spending

in supermarkets eased.

Separately the British Retail

Consortium said that sales

of non-food items also fell

over the quarter.

The Chinese messaging app - WeChat -

has hit one billion monthly

users for the first time.

The vast majority of its users

are based in China, where the recent

Lunar New Year tipped usage

past the milestone.

But it still lags behind WhatsApp -

which is owned by Facebook -

which has around 1.5

billion monthly users.

And they are across the world, of

course.

As we have already mentioned, a top

health official is recommending the

diets that Brits should be on.

Apparently we all need to go on a

diet to ward against the problem of

obesity. Also there is a real finger

being worked at the food industry in

general. That is about what is on

offer in the supermarkets at what

cost, the fact that lots of the

cheap food on sale, which many are

opting for right now, is actually

full of sugar and calories.

We want all your views on this,

#BBCBizLive.

Ben? Sorry, you just called me

talking to the director.

I thought you were talking to me!

Another story I would like to flag

up, Lego, this is a favourite in

your household, Sally, Lego posting

its first annual fall in sales for

13 years.

Despite my efforts.

Sally

gets through a lot of like the

latter with three boys.

Sales were down 8% to $4.2 billion.

Profits were down 18%. Lego posting

its first annual fall in sales in 13

years.

That is not one that I'd

built. That is not one of my photos.

The Lego is all in my Hoover or my

dog's mouth.

The Chief Executive of Japanese

steel giant Kobe Steel has stepped

down after an investigation found

"inappropriate corporate behaviour".

The company recently admitted

falsifying key quality control data.

Karishma Vaswani has details,

she's in our Asia Business Hub.

We know this scandal hits all the

headlines, this is the fallout of it

and you get a sense of how far

around the world it was felt, that

Steele is used a lot of

manufacturing?

Absolutely. The

clients that Kobe steel had numbered

from train manufacturers,

car-makers, aircraft makers. You

name it, they were supplying steel.

In the mammoth report that has come

out today into the investigation

into actually what went wrong at

Kobe steel, the company says out of

the 688 or so incidents of

misconduct, as it called Sid, at

least 90% of these cases have been

cleared of safety issues. --

misconduct, as it called it. When

the scandal broke it went the heart

of what was wrong with corporate

Japan. This investigation has found

that some of the staff safety

inspection data so it appeared the

products they were sending into the

WorldCom plied with what their

clients wanted, and basically they

were lying to clients. Apart from

removing the CEO from his position,

the company says it will address

some of these corporate culture

issues which they hope will rectify

some of the problems at the firm.

Thank you very much indeed. An

interesting story about Kobe Steel,

that news was quite shocking when it

across the wires.

Let's show you the markets. What a

different picture in Asia compared

to this time yesterday. Japan

closing up 1.5%. I would like to

quote a US traders saying the

positive story today is the lack of

anything bad happening. That is the

general feeling. People are brushing

off the fears we saw yesterday about

possible trade was an turrets.

Investors leave President shrimp is

blustering and it will not become a

reality -- investors believe. Let's

look at Europe, Europe closed on

Monday hair. It was not like Asia on

Monday. Strong gains right across

the board. We will dig deeper in

just a moment, but let's hear from

Joe Mellor in New York with what is

ahead on Wall Street.

After another bumpy day on the stock

markets there is little doubt

investors will be on tenterhooks for

the latest indication on whether the

US is about to start a trade war

and, if so, with soon -- with whom.

There is plenty of the news to

grapple with. In a big week the

retail stocks, one of the biggest,

retail chain target, reports on

Tuesday. Its revenue are reported to

have increased due to a particularly

strong retail shopping season.

Investors also want to hear news and

how online businesses bearing

against the Bailey Mes that is

Amazon. The latest factory orders

data is released on Tuesday morning,

expected to show orders rose by 1.3%

in January.

Joining us is Nandini Ramakrishnan,

global market strategist at

JP Morgan Asset Management.

Good morning. Let's start with some

of the political stuff. At the start

of the programme we mentioned

President Trump and turrets, lots of

uncertainty in Europe with the

elections questionably got over the

weekend there was the big general

election in Italy, it happened on

Sunday. We also had the results of

the German coalition discussions.

Two parties finally decided on the

agenda and that they would work

together for the next several years

in Germany. Lots to wake up to one

Monday morning. A bit of uneasiness.

If we had to characterise the two

results, the German sense of

stability, patching together two big

parties, a pro-Europe stance is very

important. A bit of the opposite in

Italy. A couple of the parties that

received the most votes are some of

the more antiestablishment parties,

once interested in thinking about

Italy leaving the euro zone or

shaking up markets and economic is a

bit more.

There is a European

Central Bank meeting this week?

The

European Central Bank has for the

past several years then a huge job

of getting interest rates very low,

trying to get growth and being quite

successful. We will have to see what

they do in terms of winding down

their big programmes and what they

will forecast for growth.

The

markets shrugging off any concern

about a terrorist war, Trump's

tariff plans. Interesting that the

Speaker of the House of

Representatives said he was very

concerned, the Republican leader, he

does not want to see any of this

going ahead. -- shrugging off

concerns about a tarriff war.

Opening into today's markets we saw

that markets were stepping up,

realising what has to happen before

the implementation of this. Quite

drastic, but an important tax tariff

plan. If that happens there will be

effects, but it is far from being

implemented immediately, which is

why markets might be taking a step

back and regaining some fitting.

Thank you, for now. Nandini will be

back to look at some of the

newspaper stories, including apple's

new headquarters

in San Francisco, $5 billion worth

of lots of reports of people walking

into glass-walled. A bit too trendy

for its own good. I have done that

in this building. They have had to

put etching on the glass so you can

see it.

Still to come...

From farm to fork.

We'll get the inside track

on the app that puts farmers

in touch with customers -

cutting out the big

supermarkets and their profits.

You're with Business

Live from BBC News.

There is

Live from BBC News.

There is definitely

Live from BBC News.

There is definitely a

Live from BBC News.

There is definitely a food

Live from BBC News.

There is definitely a food theme

Live from BBC News.

There is definitely a food theme

today.

The online takeaway firm Just Eat

has reported a pre-tax loss

of £76 million for last year -

that's compared to £91

million the year before.

But the firm says orders are up 26%

over the period to 172 million.

Laith Khalaf is senior analyst

at Hargreaves Lansdown.

He joins us from Bristol.

Good morning. What do you make of

the figures?

It is a bit of a blip

in an upward trajectory for Just

Eat, on a charge of late, increasing

orders, increasing revenues very

strongly. What is happening it is

being dragged into the delivery

market. Until now, the business

model has been very cosy, it has

just provided a website, and app,

connecting restaurants with their

customers. But it is now getting

into bed with some of the big chains

like Burger King and Kentucky fried

chicken and they want delivery as

well. That is going to be soaking up

some investment from Just Eat. That

might be impacting on profit margins

so we have seen a big fall in the

share price this morning.

What

impact is Just Eat having an eating

at industry? Are they getting into

bed with Burger King and others

because Burger King thought they

would eat into their market?

Yeah,

they have got to get into the

delivery market which is growing

very strongly. There is a whole

piece about what technology is doing

to consumer behaviour. We have seen

it on the high street. We have seen

declining footfall on the high

street because people are shopping

online. People are also staying at

home watching television, Amazon

Video, it all impacts on the

businesses and particularly Just Eat

which has been a winner until now

from that trend, but if we are

looking at today's results, they are

finally going to have to roll up

their sleeves and get their hands

more dirty than they have until now.

Thank you for your analysis. That is

in line with this whole discussion

about food, what we are eating, the

fact we are getting larger. Doing

less exercise. And who is

responsible. 16 MPs have written to

the Business Secretary, Greg Clark,

opposing the takeover we have talked

about, GKN Cabinet Aerospace.

Details on the Business Lives page.

You're watching Business Live.

Our top story...

Carmakers meet in Geneva

for the world's largest car show,

but they're debating what to do

about President Trump's threat

to impose tariffs on imports

of European cars to the US.

We will keep a close eye on that.

This is what the markets are doing

in Europe. Sally touched on it, some

others suggesting the lack of

anything bad is keeping markets

afloat which is probably not a great

basis to be trading on... Not a huge

amount moving at the moment. We will

hear from the European Central Bank

later in the week and a lot of

nervousness around the jobs figures

and inflation in the US that caused

the volatility of late.

Now, it's often known as farm

to fork - cutting out supermarkets

and food retailers to let farmers

sell directly to consumers.

But is it as simple as it sounds?

In the UK, the six biggest

supermarkets control almost 83%

of the grocery market.

That buying power means supermarkets

sell milk, for example,

for around 45% more than they pay

the dairy farmer who produced it.

And that's had a big

impact on the industry.

Farmers are facing soaring levels

of debt - up 57% since 2010 -

and one in ten dairy farms has

recently gone out of business.

By putting farmers in direct

touch with consumers,

Farmdrop is hoping it can cut out

the middleman and help

farmers and shoppers.

Joining us is Farmdrop's

co-founder, Ben Pugh.

Good morning. Welcome to the

programme. Explain how this works,

what is it you do?

I thought that

statistic was really interesting,

45% of the retail price of a pint of

milk goes to the dairy and that is a

really big problem and at Farmdrop

we are saying we need to close the

gap between the retail price that

the customer pays and what the dairy

or Baker or organic vegetable grower

retains. At Farmdrop, the dairy or

baker get more like 70% of the

retail price and the whole thing is

about efficiency with mobile

technology. As a customer, you go on

and

order from over 200 producers and

they get the orders directly and we

deliver the food in one nice big

green box we take back the next day.

It sounds idyllic but it sounds

expensive. Could be convenient.

Maybe not, depending on how long it

takes.

On the convenience, if you

order before noon, you would get

your delivery the following

afternoon. We think that is very

convenient and that is comparing to

people like Tesco, Sainsbury's. One

hour time slot which is important as

well. No point in trying to fight

the tide of convenience. In terms of

pricing, our view is that by being

so efficient, we can be the lowest

price access to this kind of amazing

independent locally produced food.

You would be cheaper than an Ocado

livery?

We are 5% more. Our

customers tell us our spinach is 20

times more delicious. -- Ocado

delivery. It is so much fresher, it

has come from close by, and that is

one of the things that has helped

the company grow tenfold.

I am not

going to ask you how you measure 20

times more delicious! The

supermarkets say they put the

margins on it because they have big

stores, we pay for the convenience,

I can nip in on the way home because

I do not know what I am going to

have for dinner tonight. If I order

your box, I have to plan. Otherwise

I just pop in on the way home and

pick up something.

It is a fair

point that for the segment of

shoppers and when I was in my 20s,

it would not have occurred to me to

have done online home food delivery

because I was out most of the time,

and now I have two small children, I

will put my order in this morning,

it will all arrive tomorrow

afternoon, not a huge amount of

planning in place. The value is I

know I am supporting local

producers, getting really amazing

quality food, healthy food. I and I

am not paying very much.

Is the

market solid enough for you as a

company, given the economic

environment? We are spending less on

the supermarkets because we are

concerned about the outlook.

There

are real issues. Certainly, I am not

an expert on those on the economy.

But I can tell you every day more

and more people are waking up and

having a better understanding about

what food quality really means, not

all calories are created equal, so

if I do spend 5p more on an amazing

fresh bag spinach, I'm going to be

better off, it is a worthwhile

investment, and that group of people

is growing very fast at the moment.

If you can make spinach 20 times

more tasty and nicer, I will order.

I accept your challenge!

Really good

to see you, thank you very much.

Maybe that will be an online

offering on the Business Live page,

spinach tasting challenge with the

two Bens. Stay up-to-date with the

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Twitter... You can find us on

Facebook. Business Live on TV and

online. What you need to know when

you need to know. There you have it.

Let's take you to some of the

stories the papers are looking at,

including this one on the BBC

business website. Britain needs to

go on the diet, interesting because

it is talking about who was

responsible for the obesity crisis,

the manufacturers putting too much

sugar and fat end? Is it the

retailers selling it cheaply? Or are

we responsible because we are not

eating properly? You do not need to

see that in every angle. Interesting

one as far as business is concerned,

they are in it to make money, if we

do not want to eat it, we should not

buy it?

Exactly. But looking from

the health perspective, it is

important how broader health issues

like obesity cost the NHS and people

in terms of days on their lives. It

is quite an extensive list of

products and the classic culprits,

pizza, meat, interesting ones about

dressings, sauces, trying to cut the

calories.

One of my favourite

things!

Sad reading each item on the

list.

We have heard from so many of

you, thank you. John, people are not

done, you cannot blame food for

making a person fact, it is up to

human beings to look after

ourselves. Another one says, surely

everyone knows what is good and bad,

will informing us do more? Another

one suggesting the cost of the NHS.

Barry says, I would rather not worry

about my weight, Aunt Sally. OK,

don't! We are out of time. That is

Business Live. Bye-bye.