Business News (March 2018)

Easter eggs: more box than chocolate?

Well, according to survey carried out by Which?, a third of your Easter egg weight comes from its actual packaging. The survey was based on the 10 top selling eggs across the United Kingdom and included brands such as Lindt, Thorntons, Mars, and Cadbury. Which?’s research showed that the cardboard and plastic surrounding your Easter egg adds up to a third of the total weight of the entire package.

Thorntons came at the top of the survey, with an excess 35% of its weight arising from the packaging. Thorntons responded, explaining that the reason for packaging this way was to seal in freshness and maintain the quality of their product. Thorntons went on to say that the packaging used throughout their range was recyclable, with a small exception of the plastic window that covers a collection of their chocolates. It was also confirmed that the inner egg protector was produced using 50% recyclable plastic.

The Lindt Lindor milk chocolate egg with truffles packaging was calculated as 28%, with Mars Milk Chocolate and Cadbury’s Giant Crème Egg showing figures in excess of 25%.

Swiss chocolate company Lindt, have confirmed that they use recyclable materials as well as using local packaging sources to reduce levels of transport. In a recent interview, a spokeswoman for Lindt confirmed that they take their “responsibility towards the environment extremely serious and make sustainability a priority”.

Although manufacturers have made large steps to improve the sustainability of their packaging, it is felt that a lot more can still be done. Which? Were impressed by some of the manufacturers efforts in the production of their packaging and understand that they have taken onboard previous criticisms regarding excess packaging production.

Which? are hoping that their recent research and its results will help environmentally friendly shoppers, and educate those who have little knowledge about what they can and can’t recycle.

Most of plastic packaging used for Easter eggs can be recycled, as it is made from the same material as plastic bottles. Foil can also be recycled, however, it is recommended that foil is wiped clean prior to disposal and scrunched into balls. The plastic packaging used for chocolate bars cannot currently be recycled.

Google initiative to combat fake news

Google has pledged $300 million, with a view to supporting journalism and the fight against fake news items. Google wants to help news organisations with their investment to help growth throughout their businesses, whilst investing in new technology to enhance news ‘consumption’ online.

Google, have in the past seen criticism for endorsing articles that were proved to be false. Now, having learnt by their mistakes, Google are driving forward a new initiative called “Disinfo Lab” as well as launching a project alongside Stanford University call MediaWise to encourage younger readers of the news to help them distinguish between fake and real online news items.

Google have been working closely with the news industry to move forward, and to maintain sustainability and growth according to Google’s Chief Business Officer, Philipp Schlinder. The media industry has become problematic; moving from printed media to online media has seen printed media market and circulation decline during the last 15 years.

Schlinder confirmed that Google has launched to their users “Subscribe with Google”, a new initiative that will offer readers the facility to register and subscribe to access news articles. Schlinder also outlined their plans to facilitate news portals and make advances to enhance access and the reading of online news articles by providing faster access to mobile web pages as well as up to date VR experiences.

Schlinder believes that this is “just the beginning”, and ways to develop the reach of new audiences by producing high impact stories is achievable.

Uber suspends self-driving tests after fatality

A fatal accident involving an Uber self-driving car in Tempe, Arizona has seen further tests of the vehicle across North American suspended until further notice.

It is believed that a 49-year-old woman was hit by the moving vehicle as she made her away across a street without using a pedestrian crossing. The accident occurred whilst the vehicle was in autonomous mode, and it is understood that a human monitor was in the driving seat. Uber self-driving vehicles have been involved in many incidents to date, however this is the first fatal collision that the experimental vehicles have been involved in.

Uber have sent a heartfelt apology to the victim’s family and are currently giving their full cooperation to the police department in Tempe and other authorities, including teams from the US National Highway Traffic Safety Administration Office and the National Transportation Safety Board while a full investigation is in place.

The United States motor industry including Ford, General Motors, Tesla and Waymo have made large investments into research and the future industry of self-driving cars, with the addition of many states in the US welcoming the research and testing with an eye of being a part history in the making and successful new technologies, despite warnings that the technology is perhaps being used a little too early.

Former US Secretary of Transportation, Anthony Foxx described the accident as “a wake-up call to the industry”, and believes that the government needs to take a stand, and use the lessons learned from this accident to prioritise safety.
The Centre for Automotive Research claim that currently over a dozen states across the US facilitate a small number of autonomous vehicles, on the understanding that the vehicles movement is observed by a person within the vehicle or has remote access to its control in the event of any malfunction. National safety guidelines for self-driving cars are currently being drawn up in the US.

It is understood that the UK want to introduce driverless cars to the UK roads by 2021, with a planned route to include a 200 mile country road.

Tech giants might be running out of tax avoidance options

New tax rules introduced by the UK government could see the world’s largest technology firms including Facebook and Google receiving larger tax bills following a restructure of the current tax system. The current system ensures taxes are levied on profits. Using Google as an example, their revenues of £1 billion in the UK during the 2016 tax year saw a pre-tax profit of £149 million; Google paid taxes of £38 million, an amount that rose significantly than preceding years due to a change in the way that Google changed their business activity within the UK. Should the government change its current practices, Google would see the government taxing parts of their sales and a significant increase in their taxes.

The same would be seen for companies like Facebook, another high profit company that would see a significant increase in the amount of taxes it would have to pay in the United Kingdom.

The businesses and companies within the technology industry have tackled debates over the new scheme, and all have clearly stated that they have abided by the current tax rules.

According to the Financial Secretary to the Treasury, Melvyn Stride, the largest digital companies should be equally paying a “fair” amount of taxes to the UK, and that taxes placed on revenues had potential. This move would also offer protection to small start-ups, as well as small businesses who struggle to make profits.

During the 2017 Budget, the government issued a consultation document raising the issue and notion of a revenue tax. It appears that since then, this option is a step closer and is now likely to happen.

Stride wanted to point out that the new initiative was not about tax avoidance, evasion or non-compliance with current tax rules – the proposals are focused on the how the current system works, and the changes that could be made, also recognising that the new ‘21st century digital age’ itself is a new business arena where existing taxing rules are difficult to apply fairly, thus leaving these digital companies paying higher levels of tax under the new proposals by the Treasury.

The government wants to work alongside the European Union and the Organisation for Economic Co-operation and Development (OECD) who provide advice on global tax regulations. Even so, should complications arise, the UK government are prepared individually to move forward and make changes. The OECD have warned that possible ‘tax wars’ could break out should nations execute their own separate policies, leaving digital companies open to being taxed across the globe in multiples, which as a possible consequence could end up making the United Kingdom “less attractive to invest in”.

It is understood that Germany and France want revenue taxes introduced for digital firms following the controversial amounts of tax that Google, Facebook, Amazon and Apple have paid previously. Proposals are also due in April that have been made by the European Commission.

Facebook data breach controversy continues

Facebook has felt pressure from advertisers this week, after being told that “enough is enough”, following a data breach from consultancy firm Cambridge Analytica which is alleged to have exploited millions of Facebook user’s personal information on behalf of political clients.

The Incorporated Society of British Advertisers (ISBA), will be representing UK advertisers in a meeting with Facebook this week where they are demanding answers as well as assurances about the future of the security surrounding user’s data. If they do not receive the answers that they are expecting, Facebook are set to lose advertisers and financial backing.

The co-founder and Chief Executive of Facebook, Mark Zuckerberg has finally broken his silence and apologised profusely for the first-time admitting that a breach of trust had been broken with his consultancy firm.

In February this year, Unilever made threats to pull out of advertising deals with both Facebook and Google, urging both companies to improve the policing of their sites following illegal content being shown on both platforms. Unilever want their consumers to trust what they read online.

Companies are very limited with online advertising – with few firms dominating the online advertising market there are few alternatives. M&C Saatchi have predicted that digital media advertising is expected to grow by 10% during 2018, but forecast that “60p in every £1 of that increase will go to Facebook and Google and that’s not healthy. While there is much debate about media plurality with newspapers, “in the digital space, plurality doesn’t exist”. The ISBA have yet to comment publicly.

Red faces as UK passport manufacture is outsourced to Europe

It was announced today that UK Passports will be produced in a factory based in France following Brexit according to current UK manufacturer De La Rue. From October 2019, UK residents will see their current burgundy passport return to its previous dark blue and gold colour.

De La Rue have held the contract to manufacture British passports since 2009. Absurdly, given the current political context, under EU procurement rules, the Home Office has a requirement to offer tender opportunities to European companies – it is because of this ruling that Franco Dutch company Gemalto were able to undercut De La Rue by a significant amount.

More than 6,000,000 passports are issued from the Home Office each year. The office provides passports to British citizens across the globe and is the only agency that can provide this service. It was in 1921 that the first blue and gold passport was introduced, and the decision to return to its original colouring was hailed by Brexit supporters and MPs, a sign that the UK was finally taking back sovereignty following the vote to leave the EU.

As a result, De La Rue released a profit warning earlier this week, which has since seen a fall in share prices. According to Culture Secretary, Matt Hancock, the final decision to move passport manufacturing to France had not been confirmed. The Home Office did confirm that the UK passport did not have to be produced on British soil, and that blank covers had already been made overseas over the years.

If the decision to move the production of the British passport to France is confirmed, it is believed that UK residents may be forced to pay ‘over the odds’ due to costs on the passports as well as the pound falling in value since Brexit. Current holders of burgundy coloured passports will be able to use their passports until their expiry date.

 

 

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Business News (February 2018)

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