The Great Debate UK
What the horsemeat scandal tells us about risk
By Kathleen Brooks. The Opinions expressed are her own.
The developing horse meat furore is a keen reminder how companies need to always be on the lookout for the next big scandal that could rock their business. Take Findus, the frozen food company. It’s 100% beef lasagne, it turned out, was 100% beef free. The company who owns Findus –private equity firm Lion Capital – spent GBP 1.1 billion acquiring the firm in 2008.
The numbers may have added up when Lion did its analysis prior to the sale, but in hindsight it would have been more expedient to check the supply chain and ensure that Findus did what it said it did on the pack. The Findus brand has been in financial trouble for some time, including breaching debt covenant deals last year. However, through a complicated debt-to-equity deal with some of its lenders, Lion managed to hold onto the business. Maybe the effort wasn’t worth it. Lion will have to fight hard to dissociate its image form dodgy processed food companies flogging horse meat dressed up as beef to the unsuspecting consumer.
It’s not just a company’s products that can negatively impact a brand. Take sports companies and sponsorship deals. Nike only dumped Lance Armstrong once it had been proven beyond doubt that he used performance-enhancing drugs to win on the global cycling circuit. They had not only paid him millions of dollars over the years, but they lauded his image (and the charity that he founded) as an example of succeeding in the face of adversity.
Nike also had a problem with Tiger Woods. When news of rampant infidelity threatened to topple the world’s most iconic golfer, Nike must have held its breath. As his performance on the golf course tumbled and he took time out, the relationship between Nike and Tiger was stretched to its limit.
Don’t Mention the War!
Modern wars have no clear start and no clear end, leaving politicians free to deny their existence when it suits them and to claim victory even in the face of obvious defeat.
The same seems to be true of currency wars, judging by the reports from the meeting of the world’s finance ministers in Moscow, who, according to the FT, asserted that “central banks should not target their exchange rates, but added that monetary easing which had the side-effect of weakening a country’s currency was allowed”. This is a bit like saying that bombing civilians is OK as long as you’re actually aiming at terrorists – which, come to think of it, is more or less what we do say.
from Jack Shafer:
Horsemeat hysteria
Disgust, the gag reflex and flights to the vomitorium greeted this week's news that horse flesh had breached the beef wall to contaminate burgers and frozen beef meals (lasagna, spaghetti Bolognese, shepherd's pie, meatballs) all over Europe. Some of the "beef" products contained 100 percent horsemeat, and early forensic tests hinted that the contamination might go back as far as August 2012.
Both the British government and the European Union called for "horsemeat summits" to investigate the food scandal, with British officials surmising that a criminal conspiracy would be found responsible for adulterating beef products with cheaper horse. But for all the horsemeat hysteria recorded and amplified by the press, "no risk to consumer health" was posed by the products, as the Food Safety Authority of Ireland reported. The injuries from eating horsemeat were not physical, they were psychological, and where they were not psychological they were anthropological, or else simply nonexistent. According to the Ireland health authority, every beef-and-horse burger it analyzed tested negative for phenylbutazone, a common horse medicine that's banned from the food chain.
Chastened ECB wary of premature monetary tightening
–Darren Williams is European Economist at AllianceBernstein. The opinions expressed are his own.–
Cyclical indicators have improved, but the economic and financial backdrop in the euro area remains fragile. The ECB has clearly learned from past mistakes and is keen to avoid a premature tightening of monetary conditions.
from John Lloyd:
England’s inevitable gay union
Earlier this week the British Parliament housed a restrained, sometimes mawkish and at times moving debate on gay marriage – and the bill passed the House of Commons, 400 to 175. The story was not that it passed, which had been expected. Instead, it was the split in the major governing party, the Conservatives, more of whose 303 MPs voted against the bill than for it. (Conservatives voted 136 in favor of the bill, with 127 voting no, five abstentions and 35 not registering a vote.) Prime Minister David Cameron, still intent on ensuring that his party is liberal as well as conservative, was emollient and understanding of those against the measure but presented his support in the context of a “strong belief in marriage. … It’s about equality but also about making our society stronger.”
His remarks signal that while there is division on the right over gay marriage – at least in Europe –and that while prejudice and bigotry still exist, the serious debate is between contending notions of conservatism. For liberals like Cameron and many in his party, gay marriage extends the benediction of an ancient rite upon modern couples, drawing them into the rituals of homebuilding and long-term affection that have so far been claimed as a heterosexual monopoly. For opponents, marriage must be just such a monopoly, since it is a union of one man and one woman for the purpose (if not always the practice) of procreation, of continuing society’s values in particular and the human race in general.
Hollande the Brave
The French President has been in the press a lot recently. Firstly, there was the triumph in Mali. “Vive le France!” could be heard in the streets and the swift removal of the Taliban from Northern parts of the country is to be lauded. But after a rousing welcome in Timbuktu, Hollande might find he has a chillier welcome closer to home.
This week Hollande spoke out against the level of the euro. Not only did he do that, but he questioned why the ECB is the only authority in the euro zone who has power over the currency and said that governments’ should have some say on FX policy. This is brave stuff. Hollande is questioning the notion of a free-floating currency, something that the euro zone is fully signed up to and advocates along with other countries in the G20.
Most scenic airport touch-downs picked in web contest
St Maarten Princess Juliana International Airport boasts the world’s most visually appealing landing, according to respondents of a survey.
Private jet bookers PrivateFly.com asked travellers and an expert judging panel for their bucket list of global descents.
It is clear Britain got a ‘bounce’ from the Olympics, but much more is needed to secure long-term economic legacy
–Andrew Hammond is an Associate Partner at ReputationInc. He was formerly a UK Government Special Adviser, and a Senior Consultant at Oxford Analytica. The opinions expressed are his own.–
Six months since the London 2012 games began, a flurry of research has indicated that the UK’s international image has received a boost from hosting the Olympics and Paralympics. Most recently, the latest Anholt GfK Roper Nation Brands Index, released on January 17, showed that the United Kingdom edged up from fifth to fourth place since July 2012 in the survey’s overall country reputation rankings; only the United States, Germany and France currently have a more favourable nation brand.
from The Great Debate:
Hotspots and have-nots
In 2005, Nicholas Negroponte announced an audacious goal: He was going to put a laptop in the hands of every child in developing countries. With his "One Laptop Per Child" project, the futurist and marquee Wired magazine columnist was looking to close the widening gap between the world’s haves and have-nots. His underlying premise: In the computer age, there should be none of the latter, because the PC was the ultimate equalizer.
OLPC was greeted with great acclaim among the Internet's 1 percent, many of who were highly motivated to empower the other 99. It was backed by a host of blue-ribbon tech companies and got the perfect coming-out party at the 2006 World Economic Forum in Davos, where the UN Development Program announced it too would support the project. OLPC's machine, the XO, was tailor-made for the developing world: It had a hard plastic shell to survive outdoors, where it would see a lot of use, and a screen that could be read in direct sunlight. It used 1/10th the power of contemporary laptops and could be recharged with solar energy. And at $200, it was incredibly cheap by laptop standards back then.
Obama half-term report: must try harder in economics
In the welter of comment on President Obama’s second term, one remarkable feature seems to have slipped under the radar. This has been a presidency blessedly free of scandal. When last did the White House remain more or less scandal-free for as long as four years? His predecessor, George W., had the average scandal quotient (Halliburton contracts, the Abramoff affair among others). Before him, there was Clinton, who seemed to clock up a scandal a week – we all remember the sex, but there was also Whitewater, which involved money, allegations of graft and ultimately suicide. Under Bush Senior and Reagan we had the Iran contra affair. As for Nixon, the less said the better. Even the saintly Jimmy Carter had a problem brother and some rather loose cannons among the pals he shipped in from Georgia to staff his administration.
What makes Obama’s record all the more remarkable is that he emerged from the mire of the Chicago Democratic Party, a bye-word for corruption for decades past, and in fact the Governor of Illinois was accused of trying to “sell” the new President’s abandoned senate seat only a few weeks after the election. Moreover, you can be quite sure that this administration’s many enemies will have subjected its dealings to the most microscopic scrutiny in search of even the tiniest flaws, misjudgements and personal peccadilloes. It is truly amazing that they have found so few.
