Tag Archives: Distillers and Wineries (TRBC)

U.S. SEC probes Altria’s investment in Juul: source

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FILE PHOTO: Juul brand vape cartridges are pictured for sale at a shop in Atlanta, Georgia, U.S., September 26, 2019. REUTERS/Elijah Nouvelage/File Photo

(Reuters) – U.S. regulators have opened a probe regarding Marlboro maker Altria Group Inc’s (MO.N) investment in e-cigarette maker Juul Labs Inc, according to a person familiar with the matter.

The U.S. Securities and Exchange Commission is investigating whether the Marlboro maker adequately disclosed the risks to its shareholders when it spent $12.8 billion in 2018 for a 35% stake in the start-up, the Wall Street Journal reported earlier on Friday.

The SEC has issued subpoenas to Juul and the e-cigarette maker has responded, according to the person familiar with the matter.

Juul has turned over documents including correspondence with Altria and financial projections Juul shared with Altria before the deal, the person said.

Altria has recorded $8.6 billion in impairment charges since investing in Juul in December 2018, bringing the value of its investment to $4.2 billion by end of 2019.

Juul and Altria did not immediately respond to a request from Reuters for comment.

Reporting by Praveen Paramasivam and Abhishek Manikandan in Bengaluru, and Chris Kirkham in Los Angeles; Editing by Shailesh Kuber and Daniel Wallis

Our Standards:The Thomson Reuters Trust Principles.

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Airbus, French exporters reel as U.S. tariffs loom in subsidy row

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PARIS/BRUSSELS (Reuters) – Shares in Airbus (AIR.PA) and French luxurious items exporters fell on Monday because the European Union acknowledged it might face U.S. tariffs in a long-running dispute over plane subsidies, a part of an escalating tit-for-tat commerce row.

A brand of Airbus is seen on a flag at Airbus headquarters in Blagnac, close to Toulouse, France, February 14, 2019. REUTERS/Regis Duvignau

The World Commerce Group has authorised a U.S. request to impose tariffs on European items within the newest chapter of a dispute over plane subsidies that might result in European reprisals, two folks acquainted with the case mentioned.

The scope of the choice, which had been extensively anticipated, is because of be introduced within the week of Sept 30.

The EU’s commerce chief mentioned the US was prone to impose tariffs “fairly quickly”.

The WTO has discovered that each Airbus and its U.S. rival Boeing acquired billions of {dollars} of dangerous subsidies in a pair of circumstances marking the world’s largest ever company commerce dispute.

The EU and United States are actually drawing up potential tariffs after the Geneva physique additionally discovered neither facet had adhered totally to its findings. However Washington is first in line to show this into precise tariffs as a result of its case is working 9 months forward.

Washington has sought permission to impose tariffs as much as 100% on European items value $11.2 billion a yr. These embrace plane and aerospace elements from Airbus host nations – Britain, France, Germany and Spain – as effectively a spread of products together with wine, cheese and luxurious items from throughout the EU.

Exports of Airbus industrial helicopters may be hit.

The ultimate quantity will depend upon WTO arbitrators who offered their findings internally final week.

Washington should then draw from a broader record of EU merchandise with a commerce worth of $25 billion a yr that it has tapped for attainable inclusion within the last record of any punitive tariffs.

Airbus jets and elements are prone to be hit first, regardless of the measurement of the authorised countermeasures, commerce sources mentioned.

Shares in Airbus, which depends on a circulate of elements to feed an meeting line in Alabama, and which additionally counts U.S. airways amongst its main clients for plane assembled at its most important crops in Europe, fell 3.2%.

Luxurious items group LVMH (LVMH.PA) – whose merchandise embrace Louis Vuitton purses, Moet et Chandon champagne and Hennessy cognac – fell 3.5%. The US represents slightly below 1 / 4 of group income.

Hermes Worldwide (HRMS.PA) fell 1.5%.

SHIFTING BLAME

The potential change of tariffs stems from complaints filed effectively earlier than the present spate of worldwide commerce tensions, however is coming to a head simply as world markets are taking fright at commerce friction dominated by a U.S.-China commerce struggle.

On the transatlantic entrance, tensions have been brewing for the reason that U.S. imposed metal and aluminum tariffs final yr, whereas the US has additionally threatened to impose automobile tariffs.

Each side within the plane dispute have tried to deflect blame for any additional escalation by accusing the opposite of ignoring makes an attempt to move off a commerce struggle via negotiation.

In June, two U.S. sources informed Reuters the US would doubtless be open to talks on an enforceable mechanism permitting Airbus to obtain authorities funding on industrial phrases whereas addressing disputed Washington-state tax breaks for Boeing.

U.S. officers later mentioned the EU had failed to point out any curiosity in talks.

The EU, nevertheless, mentioned on Monday it was Washington that stood in the best way of a negotiated settlement.

Commerce chief Cecilia Malmstrom mentioned the EU had requested the US in July to carry off commerce sanctions and search an settlement.

“Our view is that we have now sufficient tariffs on the planet as it’s … The U.S. president likes to make offers so we have now provided to attempt to make a deal to discover a negotiated answer,” EU Commerce Commissioner Malmstrom informed a briefing.

“To this point, sadly, the U.S. has not mentioned that they’re prepared to barter, a minimum of not till they’ve imposed their tariffs, which they’re prone to do fairly quickly,” she mentioned.

The EU commerce chief mentioned any EU-U.S. settlement may function a template for others to observe to create a degree enjoying area. “We additionally know different massive gamers on the planet, resembling Russia and China but additionally others, are additionally subsidizing their civil plane business,” she mentioned.

Western officers who’ve tried to discover a compromise up to now imagine any new funding settlement should set an instance for China, whose personal speedy aerospace progress with state backing is considered as a worrying menace by the 2 Western giants.

Extra reporting by Josephine Mason, Andrea Shalal and Stephanie Nebehay; enhancing by Jason Neely and David Evans

Our Requirements:The Thomson Reuters Belief Rules.

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Hey big spender – how luxury brands are raising the stakes on Instagram

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PARIS (Reuters) – Big-spending luxury brands like Gucci, Louis Vuitton and Christian Dior are splashing out on everything from dance-fuelled fashion shows to teams of advisers as they target social media platforms in the hunt for young shoppers.

FILE PHOTO: Models present creations by French designer Nicolas Ghesquiere as part of his Fall/Winter 2019-2020 women’s ready-to-wear collection show for Louis Vuitton during the Paris Fashion Week in Paris, France, March 5, 2019. REUTERS/Stephane Mahe/File Photo

Without the entry barriers of magazine advertising – where a one page glossy ad can cost tens of thousands of dollars – sites like Instagram, a fashionista favorite, have allowed unknown labels to find an audience with canny or eye-catching campaigns.

But big bucks are changing the game as cash rich luxury goods groups like LVMH and Kering hike their social media budgets, giving them vast means to drown out rivals on platforms once seen as a leveler for brands big and small.

As the use of bloggers and influencers becomes mainstream, fees per sponsored post commanded by those with four million followers have reached well over 20,000 euros ($22,546), according to marketing experts.

Less active than some smaller brands on networking platforms even five years ago, luxury’s leading players are now leapfrogging the competition.

Kering – owner of fast-growing Gucci, which scored the highest level of publicity impact on social media last year according to data trackers Tribe Dynamics – on Friday said that half its 2018 media budget was spent on digital advertising, up from 20 percent only three years earlier.

“There’s a big shift in how we’re thinking about advertising and creating aspiration,” Kering’s digital chief Gregory Boutte told journalists on the sidelines of an investor day.

“Now with every type of social platform, you need different types of videos, of pictures. You don’t create content on YouTube as you do on TV.”

Kering does not reveal its total advertising expenditure.

Its cross-town rival LVMH increased its total marketing spending at the fastest rate in seven years in 2018 to 5.6 billion euros ($6.3 billion), reaching 12% of group revenues – more than most brands that disclose this budget and topped only by another big online trendsetter, privately-owned Chanel.

Louis Vuitton, LVMH’s major sales driver, also now allocates half its marketing costs to digital media, the brand’s CEO Michael Burke said at a closed-door briefing this week, according to Citi analysts.

LVMH declined to comment.

Vuitton, as well as LVMH’s Christian Dior, Marc Jacobs and Givenchy labels were among Tribe Dynamics’ top 10 brands last year, with Kering’s Saint Laurent and Balenciaga also making the cut. The firm quantifies how much social media buzz is worth, including non-paid for content.

EMBRACING THE NEW

Rewind three years, and Italy’s Valentino, seven times smaller then than Vuitton, outflanked peers in the Instagram stakes, coming first in a listing by Engagement Labs which measured the most effective brands on social media.

Valentino’s formula was simple, mixing content generated by fans with its own professional photos, while answering online comments – a standard approach for labels now, but which helped fuel a sales spike at the Mayhoola-owned firm at the time.

Valentino’s Instagram followers have doubled to 12.4 million since, though revenue growth has slowed; Vuitton’s followers have almost tripled to 32.1 million, and revenues are still expanding at a robust pace.

Marketing investments are just one factor separating luxury brands riding high on demand from markets like China and those struggling to make a mark, with product designs and funkier store strategies playing a role too.

And funds only go so far, with social media savvy also making a difference.

Gucci co-designed a collection in 2016 with “Guccighost”, a street artist who painted quirky versions of its logos around New York and posted them online, helping its social media credentials, Tribe Dynamics’ co-founder Conor Begley said.

“Gucci embraced those connections. Usually a brand would have sent attorneys after him,” Begley said. “That sends a message to other content creators who think ‘Oh My God, maybe I’ll get to work with Gucci’ if I post about them”.

BIG GROUPS, BIG MEANS

As digital investments rise, mid-sized luxury labels are now in an increasingly awkward spot as they try and stay visible.

“The ones that are suffering are those in the middle, of an average size, which are stuck between the small innovative pure digital players and the big groups with big means,” said Michael Jais, CEO of Launchmetrics, which compiles digital data on the fashion industry.

Italian shoemaker Tod’s is among a clutch of brands in turnaround mode investing more in social media in a bid to revive sales – a strategy welcomed by analysts but which will likely keep weighing on its profit margins, some said.

FILE PHOTO: A model presents a creation during the Cruise 2020 collection show for French fashion house Dior in Marrakech, Morocco, April 29, 2019. REUTERS/Youssef Boudlal/File Photo

Analysts at HSBC, which have a “reduce” rating on Tod’s, said in a note this week that it was losing ground and “facing intense competitive pressure” as LVMH and Kering pushed funds into online marketing.

Just over 10% of social media influencers earned $100,000 or more a year in 2018, according to a Launchmetrics report, compared to 3.7% in 2017, though hiring the most popular bloggers is only one of the costs involved.

“The big groups understood they had to invest more in experiences – what happens around a catwalk show, exhibits, store openings,” said Uche Pezard, CEO of Luxe Corp, which advises brands on strategy. “That’s what’s expensive, not the technology. That’s what’s changed in the past five to eight years.”

Reporting by Sarah White and Pascale Denis; Editing by Elaine Hardcastle

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