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Welcome to the Inflight Magazine of Brussels Airlines |
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Our round-up of what’s happening in the business world across Europe
Large British companies pay more in corporate taxes on the wealth they create than their German, Swiss and French competitors, a UK government study has found. The annual Value Added Scoreboard produced by the Department for Innovation, Universities & Skills shows the 185 top wealth-creating companies in the UK handed over 12% of the added value they created in taxation last year. German companies among the 750 top European wealth-creators paid just 6% of their value-added in tax, while French and Swiss companies paid 8%.
The scoreboard measured the wealth created by companies by calculating the cost of goods and services bought in from their sales revenues. The 800 largest UK companies pay more tax on created weath UK companies added €816bn in value in 2007, up 9.6% on 2006. It seems British outfits are better at creating wealth, converting €126 spent on labour and equipment into almost €245 of added value last year, compared with €179 for German companies and €198 for French ones. But before the Brits get too smug, the proportion of the created wealth invested in sustaining or developing their businesses is lower than in Germany or France.
TONING DOWN THE FIZZ
Kvas may be as Russian as vodka, but Coca-Cola is eyeing rich rewards by entering the booming market. The most iconic of American brands has launched Kruzhka i Bochka, or Mug and Barrel, its version of the cola-coloured, mildly alcoholic drink made from fermented bread. But concerned Russians might not react well to a US company replicating a cherished national drink, Coke has been playing down its involvement in the product. Television commercials for the new drink don’t mention that it’s made by Coca-Cola.
After a dip in popularity during the 1990s, kvas is now the fastest-growing non-alcoholic drink in Russia, with sales up 45% last year. Although no other Western giants produce the beverage, several local fi rms – such as Ochakovo – have consolidated the market, and Pepsi has a distribution deal with Russian producer Pershin.
While Coca-Cola has been keeping its ties to Kruzhka i Bochka quiet, some local rivals are happy to do the opposite. One brand, Nikola, has a new slogan: “Kvas – not cola, drink Nikola.” Coca-Cola insists its kvas is being produced at two plants in Russia and that it’s staying faithful to local recipes. After struggling to establish itself against the offi cially sanctioned Pepsi in the Soviet Union during the Cold War, Coca-Cola fl ooded on to the Russian market in 1992.
TRENDS WITH BENEFITS
Estée Lauder has devised a cunning plan to recoup its 4% drop in quarterly profits as the credit crunch hits cosmetic sales in the US – bigger profits from smaller items. Yup, the cosmetic giant is the latest to develop skincare products “specifically for air travel”.
Super Flight Creme Continuous Hydration for Face 50ml and Super Flight Creme Continuous Hydration for Eyes 20ml, gushes the press blurb, are designed to counter the dryness and “travel-stressed skin” caused by cabin air – the humidity level in-flight can fall as low as 8%, it gasps – and jet lag. According to the company, in a recent independent survey of 100 flight attendants and more than 200 frequent flyers, dry skin was the most important travel-related concern for the majority.
Super Flight products, suitable for men and women, offer benefits that last eight hours, “leaving travellers looking visibly rested and radiant”. Any doubts as to when to apply them should be quelled by the gold airplanes on the packaging.
Falling stars
Employing steely German logic, several five-star hotels in Berlin hope to improve business… by losing a star. According to Berliner Morgenpost, the city’s 18 top-rated hotels have seen far fewer bookings from large pharmaceutical companies, who have traditionally paid doctors’ tabs for weekend presentations and conferences. Berlin’s luxury hotels believe their business has been hurt by a suggestion that pharmaceutical companies tone down the pampering given to physicians and others attending events.
The advice was published by a trade body promoting the pharmaceutical industry’s “voluntary self-control”. The group recommends “lodging and hospitality not exceed certain appropriate parameters” and that the “leisure-time value of the event location” plays no role in whether it’s chosen. Although the advice doesn’t proscribe the number of stars an appropriate hotel should have, high-end hotels feel their five-star billing makes them vulnerable in such a morally and economically fraught climate.
Willy Weiland, director of InterContinental and head of Berlin’s hotel federation, told the newspaper that 60,000 of his hotel’s 140,000 annual overnight stays are participants in congresses such as those hosted by drug companies.
Nokia is taking on Apple, Google and Microsoft to safeguard its mobile phone software in a high-stakes battle whose outcome could shape the future of the internet. Nokia, which makes about two in every five handsets sold globally, faces increased competition from other mobile phone software makers such as Microsoft, as well as Google’s new Android platform and Apple’s iPhone.
Having paid €263m to acquire the 52.1% it did not already own in London-based Symbian, the leading maker of ‘smartphone’ software, Nokia is expected to increase investment in the platform in an industry-changing shift. Although Microsoft has invested heavily in its Windows platform, and several handset manufacturers have installed it, Microsoft charges them a licence fee of up to €8.85 for each handset. Nokia promises Symbian will become a free ‘open source’ system, and is betting that other manufacturers will be more tempted to choose it over Windows and Android.
The platform is just the starting point: the real money is in the online content a handset can access, from music to satnav. Nokia is gambling that it can convert millions of mass-market products into new wireless web services and outmuscle mighty Microsoft, Apple and Google.
Munich is fed up of hearing how sexy and exciting we all fi nd Berlin, so in its 850th year the Bavarian capital has been coordinating events to show off its appreciation of art and technology.
Having started the year with ‘Digital, Life, Design’, a conference to discuss innovation, science and culture, the city has been making a big noise about its international art scene. The new BMW Welt building has become a gallery of sorts, celebrating experimental concepts such as the shape-shifting car. This is just a taster for Museum Brandhorst, which opens this autumn with works by modern art heavyweights such as Andy Warhol and Damien Hirst.
Munich’s biggest tourist draw is still Oktoberfest. Last year’s event saw a record 6.9m litres of beer downed. But while Munich is one of Germany’s wealthiest cities, cultural tourists provide additional revenues for its bars and restaurants. German beer consumption slumped from 142.7 litres a head in 1990 to a record low of 111.7 litres last year.
In our pyjamas
Economists often base economic forecasts on hemlines – when skirts go up, so does the stock market – but in the credit crunch several observers are giving more credence to next summer’s menswear collections.
Roberto Cavalli’s ‘Bohemian Safari’, Salvatore Ferragamo’s one-button suits in pinks and Giorgio Armani’s super-casual trousers with scarf belts were clearly intended for a holiday (enforced or not), noted the Financial Times. Brioni even themed its show ‘From Boardroom to Beach’, while Prada offered raincoats and jackets worn over pyjamas – the perfect outfit for popping out to get a newspaper to scan the job ads.
Some fashion designers were even gloomier.
Fendi reworked its usual collection of pricey fabrics into peasant and worker garments, while Vivienne Westwood featured patchwork shirts and boots made of carpet. To cap it all, Versace used a smoke motif on its knits and T-shirts, suggesting a stress-induced nicotine fix or everything going up in flames.
Advertising spend in Western Europe has been trimmed, according to latest data from WPP Group, as soaring energy prices drain consumer cash and marketers cut their overheads. The UK-based advertising giant says sales have grown less than in Asia, Latin America, Africa and Eastern Europe.
The firm’s annual meeting heard from CEO Sir Martin Sorrell that overall revenues, excluding the effects of currency and acquisitions, grew 4.5% in the first five months of the year, down from 4.8% in the first quarter. Sales in the same five-month period last year grew 5.2%. European weakness was offset by the expansion of the Middle East market, which grew even faster than Eastern Europe.
Sorrell declared WPP had yet to feel the pressure of a global slowdown – this year would be cushioned by the Beijing Olympics, Euro 2008 and the US presidential election. However, he warned 2009 would present more challenges. He told shareholders: “Looking ahead, you will not need me to remind you that commentators are just about unanimous in their belief that the world economy is in for a bumpy ride.”
Swede liberty turns sour
Despite a campaign by the media, unionists and a former security police chief, Sweden’s ‘Big Brother law’ allowing the government to spy on cross-border email traffi c has been narrowly passed. Although the law will be effective from next January, the debate is set to heat up even more over the coming months in a country that has long prided itself on its civil liberties and transparent government.
Google’s global privacy lawyer Peter Fleischer said: “By introducing these new measures, the Swedish government is following the examples set by governments ranging from China and Saudi Arabia to the US government’s widely criticised eavesdropping programme. Do Swedish citizens really want the most aggressive government surveillance laws in Europe?” The new law is being justifi ed in terms of shielding Sweden from terrorist plotters. Signifi cantly, some of the sternest opposition to the law has come from Sweden’s security services.
The FRA, the national defence radio establishment, will be allowed to control international civilian internet traffi c and telephone conversations. Voters are outraged about the €100m it will cost to expand surveillance facilities and staff. The Swedish Post and Telecom Agency says the costs will be passed on to telecom operators.
Fuelling a lifestyle
The number of dollar millionaires grew by 6% last year, driven by India, China and Brazil. According to the World Wealth Report from Merrill Lynch, there are now 10.1 million people worth more than $1m (€637,000), excluding the value of their main homes.
The combined wealth of the millionaires, defi ned as high net worth individuals (HNWIs), grew by 9.4% to $40.7 trillion (€25.9 trillion). The number of super-rich – with more than $30m (€19m) – increased by 8.8% to 103,320, driven by the emerging markets. The number of dollar millionaires created in India grew by 22.7%; China followed with growth of
20.3% and Brazil came next with 19.1%.
Merrill Lynch says millionaires spend 16% of their cash on “luxury collectables”, including cars, boats and private jets, another 16% on art, 14% on luxury travel and another 14% on jewellery, gems and watches. They spend 5% on sporting investments, buying teams and race horses. Unsurprisingly, nowhere is blingier than Russia, where the number of HNWIs rose 14.4% to 136,000.
Friday, August 1st, 2008 at 12:00 amand is filed under features. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
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