Inflight Magazine of Brussels Airlines

Welcome to the Inflight Magazine of Brussels Airlines

Destination Guides

Business trends

Boyd Farrow rounds up what’s happening in the business world across Europe

Growing gains

Europe powers ahead

Europe’s renewable energy companies are set for a, er, windfall thanks to Barack Obama’s much-trumpeted $787bn (€583bn) US stimulus package. Under the plan, around $80bn (€59bn) worth of incentives will be offered by 2010 to ramp up investment in wind farms, solar parks and other clean energy technologies. This is great news for European companies, many of whom are experts in these fields.

Denmark’s Vestas, the world’s largest maker of wind turbines, is forecasting revenues will rise 20% to €7.2bn this year, with much of the growth likely to come Stateside where it operates a $100m (€74m) turbine-manufacturing plant in Colorado. Emboldened by the upcoming – although so-far hazy – US incentives, the Danes plan to pump another $1bn (€0.7bn) into three more plants in Colorado by 2010 and to open offices nationwide.

President Obama’s incentives could also provide a jolt to Spain’s Iberdrola, based in Valencia. The company has already announced its decision to scale back its UK investment plans by 40%, but expects growth in the US to continue to accelerate on the back of the president’s pledges. Sales from the Spanish company’s US renewables division, Iberdrola Renovables, grew by 50% last year.

Portugal’s EDP Renováveis, based in Lisbon, and Italy’s Enel Green Power, based in Rome, are also poised to beef up their investment in the US.

Traffic report

Turkey plucked

In the biggest acquisition in its history, Milan-based Gruppo Campari is buying the Wild Turkey bourbon brand from French drinks group Pernod Ricard for $575m (€425m). The purchase includes the Wild Turkey brands, American Honey liqueur and distillery facilities in Kentucky.

For nearly 30 years, Pernod Ricard – the world’s second-largest spirits maker after the UK’s Diageo – has failed to make much of an impact on the bourbon market, which is dominated by Jack Daniels and Jim Beam. Nevertheless, the ambitious Italians are keen to have a crack, insisting Wild Turkey will strengthen Campari’s position in the US and international spirits markets. The company says nearly two-thirds of its sales will come from outside Italy after the deal closes at the end of the month.

Pernod Ricard, meanwhile, is planning to raise €1bn through a rights issue, which will be used to reduce debt taken on last year to buy the Absolut vodka maker, Vin & Sprit.

Radar

Calling all entrepreneurs

Nokia is making its technology more accessible in a bid to encourage online entrepreneurs to use its handsets as platforms for their businesses. The Finnish mobile phone giant also hopes to make its services more user-friendly to engage with consumers infatuated with Apple’s iPhone and App Store.

Spurred by self-preservation as much as anything else – Nokia reported a big drop in profits in the first quarter of 2009 – the company will work more closely with social-networking and photo-sharing sites, and other parties. It needs to boost revenues from maps, music, games and other services to €1.7bn by 2011 – it stood at just €145m in the first quarter of 2009 – and reach 300 million ‘active service’ customers by 2012.

As an incentive, Nokia has got its wallet out. With Adobe, it has created a $10m (€7.4m) fund to support companies developing new applications.

Drawing board

Fashionably self-sufficient

Although Prada Group, the Milan-based luxury company, recently reported a 22% drop in annual net profits to €99m, it is spending aggressively in order to bounce back once the economic crisis has eased.

Prada, which also owns Miu Miu, Church’s and several other labels, reported revenues of €1.6bn in the 12 months to January, slightly lower than in the previous year in spite of the sharp downturn in the luxury sector. However, the company spent €160m on opening 34 new stores in the last year, mostly in Europe and Asia.

In a statement, group chief executive Patrizio Bertelli called the investment “the most aggressive investment plan it has ever undertaken”. There seems to be a pretty good reason for this: sales at Prada’s own stores last year actually rose 5.6% to €871m, while sales through department stores and franchises recorded a fall of almost 5% to €738m.

Bertelli, who runs the company with his wife, the designer Miuccia Prada, said it was “an entrepreneur’s task” to meet challenging times with a medium to long-term vision. He said that when the financial crisis was over, Prada could benefit “from an industrial and distribution structure that is even stronger than before in order to make the most of the opportunities that will arise during the new development cycle”.

Radar

Strippers in tax pinch

The global economy must be in worse shape than we thought: Skatteverket, Sweden’s tax authority, is pursuing the “300 to 500” webcam strippers who fail to report their income. So far, in an operation involving an unusually high number of officers, the agency has identified close to 200 people. “Young people are usually seen as poorly informed about how to file their taxes,” Dag Hardyson, project manager for Skatteverket’s investigation of online businesses, told Swedish news agency TT. “That might be one explanation, but another reason is that their clients don’t want to be identified.”

In the past three years, Skatteverket has looked into three key areas where tax is being evaded: “pills, poker and porn”. Online stripping is legal, but those offering the service need to register for a corporate taxation certificate, as well as maintain records of their expenses and income. However, according to Sveriges Radio, only one individual audited by Skatteverket has submitted an income declaration. The businesses are estimated to generate around SEK 40m (€3.8m), at least half of which is tax revenue.

Not really…

Moving to New York

In a surprising development, the global headquarters of the newly created brewing giant Anheuser-Busch InBev will remain in Belgium instead of moving to the US, which generates 40% of AB InBev’s earnings.

InBev’s $52bn (€38.5bn) takeover of Anheuser-Busch raised fears in Belgium that a centuries-old brewing tradition would die, but CEO Carlos Brito told shareholders at the company’s AGM that the decision to stay in Leuven was based on upholding that heritage. “Our company started here in one shape or form in 1366,” he said. “That is very valuable.” St Louis, where Anheuser-Busch was founded, will remain the head office for the giant’s North American operations, while New York – widely expected to host the global HQ – will make do with a management company.

AB InBev employs 2,900 people in Belgium and 120,000 worldwide. The company’s focus now is to reduce the massive debt from InBev’s takeover of Anheuser-Busch. The company says it will aggressively shave costs and sell off €5.2bn in assets.

Upgrade your trip

Business bubble

Munich may have the Deutsches Museum and Berlin may have, well, pretty much everything, but it seems Frankfurt, the original business destination, is getting a makeover too. After standing vacant for years, an office block close to the banking district and exhibition sites has reopened as Roomers, a design hotel with 106 rooms and 11 suites.

As well as the usual do-I-sit-on-it-or-just-admire-it design components, the hotel has a 600m2 illuminated rooftop glass and concrete bubble, housing three conference venues, and a Biorhythm fitness and wellness world.

Meanwhile Dubai-based hospitality group Jumeirah has just announced it will open its first hotel in Frankfurt, as part of the city’s major new PalaisQuartier development. The 112,000m2

leisure and retail complex at Thurn-und-Taxis-Platz, close to the financial district, features 42,000m2 of office space. The recently opened retail component, MyZeil, is already fully let and attracted over one million visitors in its first two weeks.

Upgrade your trip

Writing on the wall

Many Germans believe Chancellor Angela Merkel’s economic stimuli doesn’t go far enough, but among the grateful beneficiaries are the country’s culturati. Although most of the €13.3bn earmarked for local infrastructure will go to schools, universities and sports facilities, a fair chunk is destined for cultural institutions, including Deutsche Oper Berlin (€6.4m), the Gottfried Wilhelm Leibniz Bibliothek in Hanover (€10m) and the Deutsches Museum in Munich (€29m). “We are winners of the economic crisis,” Wolfgang Heckl, director general of Deutsches Museum, told Bloomberg. “We need to update the building’s infrastructure. Also… many of our exhibitions are not up to date.”

The stimulus money comes on top of the €8bn of public funds poured into culture each year. Private sponsorship accounts for about €600m – less than 10% of the total. Olaf Zimmermann, executive director of Deutscher Kulturrat, which represents the cultural industries, has said: “From 2010 there will be cutbacks, so I am happy that a little bit of money from the stimulus package is going to culture.” Longer-term funding cuts are likely, however, when the stimulus packages end. Germany’s budget deficit is expected to rise from 3.7% of GDP this year to 5.5% in 2010.

Traffic report

Viennese best in whirl

Vienna is the world’s best city in which to live, according to the latest Quality of Living ranking compiled by consultancy Mercer. The rankings are based on a point-scoring index, which saw the Austrian capital score 108.6 and Baghdad 14.4. New York is the base city, with a score of 100.

The ranking, which covers 215 cities, is conducted to help governments and big companies consider what compensation packages to offer employees who are relocated. It surveys and weights 39 criteria in 10 categories, including the political and social environment, public services and transport, recreation and housing.

In what was undoubtedly a tumultuous year, Zurich and Geneva were ranked the second and third-best cities in which to live overall. The top three cities based soley on infrastructure were Singapore, Munich and Copenhagen.

IN POLITICS

Brigid Grauman snoops around Brussels’ corridors of power

European voters urged to get out and vote

In the last days before the European elections, the European Parliament buildings in Brussels are plastered with posters telling passers-by “It’s Your Choice!” Europe’s parliamentarians hope this year’s 30th anniversary of the introduction of direct elections will see an exciting contest, but they’re struggling against a backdrop of waning public interest in the European Union in general and the European Parliament in particular.

The It’s Your Choice! campaign is an attempt to reverse the downward trend in voter turnouts. In 1979, 63% of Europe’s voters went to the polls. By 1994 that had fallen to 56.8%, and in 2004 it stood at just 45.5%.

The main problem with the campaign is that there really isn’t much of a choice for voters. Unlike national elections, when voters are wooed on specific issues such as policing, housing and economic policy, the European Parliament’s major political families don’t have policy platforms to grab voters’ attention.

The parliament plays an increasingly decisive role in fine-tuning European regulations and legislation. But it’s more a technical function rather than a left/right tussle of the sort that dominates national politics. This means candidates don’t have much to offer voters other than their membership of a particular political party.

Barroso to be reappointed without contest

The democratic deficit that haunts the European Parliament isn’t likely to be narrowed by the circumstances of José Manuel Barroso’s reappointment as President of the European Commission.

No rival candidate has stepped forward, so the signs are the former Portuguese prime minister will get a second five-year term.

The fact that voters have no say in deciding the EU’s top jobs underlines the undemocratic nature of Europe. It isn’t a problem that will be fixed in the near future. Even if the troubled Lisbon treaty gets a green light in Ireland’s second referendum, due to be held in the second half of the year, it wouldn’t prevent these major appointments from being reached behind closed doors.

Blair for president?

There’s mounting speculation in Brussels that former British Prime Minister Tony Blair could be Europe’s first president. If the Lisbon treaty is accepted by Ireland’s voters and can also escape being blocked by political manoeuvrings in the Czech Republic, then among its innovations will be the creation of a President of the European Council.

The holder will be appointed to a two-and-a-half-year term, ending the revolving six-month presidencies held in turn by member governments.

The current system has been criticised as being patchy and disruptive. The difference between France’s hyperactive presidency in the second half of last year and the current Czech presidency, which lurches from one national political crisis to another, illustrates the point.

Blair signalled his interest in becoming ‘Mr Europe’ in 2007, within weeks of stepping down after a decade at 10 Downing Street. And while many in Europe haven’t forgotten his role in the invasion of Iraq, of late opposition to Blair seems to have abated. Perhaps the strongest argument in his favour is that, just like Barroso, a credible rival candidate has yet to come forward.

RECTIFICATION

In the April 2009 issue of b.there!, we quoted columnist Bruno Waterfield as saying the cost of the European Parliament’s EuroparlTV was around €60,000 per hour. A European Parliament spokesperson has since contacted us to say the figure is closer to €1,000 per hour.

Visit www.europarl.europa.eu