
THIS ISSUE: 12 Nov - 18 Nov
YOUR NUMBERS THIS WEEK
RETAILERS AND WHOLESALERS
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Woolworths These guys are nuts!
Woolworths, as you may know, is involved in some product labelling irregularities, resulting in the recall of 12 ice cream and sorbet products which were not labelled with the necessary peanut allergen warnings. Recall executed, apology issued, and there, one assumes, it rests, right? Not so fast, according to the National Consumer Commission (NCC), whose boy sleuths and girl detectives have discovered that the Dapper One – gasp – is unable to account for exactly how many units were affected. In fact, the answer is quite simple. Simply count the number of lawsuits, or writhing, puffy-featured peanut-allergic ice cream freaks, and Bob’s your uncle.
Comment: Retailers are the big corporates with the largest public interface, by a long margin. They provide a tempting and easy target for all sorts of special interest groups, and the crusading hacks who follow them.
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Shoprite They never!
It may now be reported that in Zambia, Shoprite have joined forced with the Freemasons, the Illuminati and the Elders of Zion in a devilish plot to terrify and confuse the peace -loving population by means of misplaced pricing labels. This according to the intrepid newshounds of the Zambian National Broadcasting Corporation, which has found that, and we quote, “a packet of Sausages weighing 2-kilogram was priced at as high as 2-hundred and 12 Kwacha while the other was priced at 36-kwacha.” Which we take to mean that one – or indeed both – of a possible two packs of sausages was incorrectly priced. The Patriotic Front’s Vice Chairperson for Media and Publicity, Mr Sunday Chanda, conducted his own investigation into the enormity, while Shoprite GM, the almost certainly incorrectly-spelled Mr Charles Bota, assured the ZNBC that Shoprite was “a law-abiding entity that wants to operate within the law by ensuring that customers get the best prices for goods”, and also by abiding the law.
Comment: Clearly, large foreign businesses operate under a perhaps understandable cloud of permanent suspicion in an ex-colony like Zambia.
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SPAR The Irish Times
From the not-particularly green hills of Natal, at least until the rainy season kicks in with greater enthusiasm, comes this: SPAR grew turnover 34.5% to R73.3bn for the year through September, with the newly-acquired Irish operations contributing 23% to the total. But before you get too excited there, there’s this: profit grew a modest 5.6% to R1.42bn, compared with 13% last year. What does this mean? Well the acquisition of Irish outfit Londis didn’t come cheap, and its costs rose more than expected, among them expenses related to the closure of the their warehouse and job cuts, adding a total of R46million to expenses for the year. Here at home, SPAR member retailers grew turnover 7.6% to R67.9bn, while wholesale turnover grew 8% to R45.6bn. TOPS grew 17.3% to R7.8bn, while Build it managed a solid 12.4% to R6.2bn.
Comment: Given the difficult conditions at home, performance here was respectable. And the Irish acquisition will prove itself a shrewd move in the long run.
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MANUFACTURERS AND SERVICE PROVIDERS
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Oceana Something fishy
And while we’re on the subject of results, which we were a story ago, here’s Oceana Group, with turnover up 22% to R6.2billion, and operating profit up 17% to R1billion. Heckuva year for the business, what with the acquisition of Foodcorp’s maritime assets and Daybrook Fisheries in the US, at R80.8million a pricy deal whose costs were somehow offset by foreign exchange gains on the settlement. Rand weakness also helped the export business, while volume growth across most sectors and improved pricing took care of the rest. Looking ahead, El Niño is once again the global climate phenomena to watch, hitting the Peruvian anchovy harvest, and increasing global fishmeal and fish oil prices.
Comment: And with the biggest El Niño in recorded history hotting up, those effects could be dramatic.
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Astral Starry starry niiiiight…
And wrapping up results season for us this week, Astral, that specialist producer of poultry and animal fees. Revenue for the Group was up 17% to R11.266bn for the year through September, with poultry up 25.4% to R8.739bn, and the feed division up 13.3% to R6.236bn. This pleasing performance was driven by improved profitability in both poultry and feeds, although like most businesses today Astral warns about tougher times to come, with unemployment up, GDP down and inflation up, and South Africans increasingly less able to afford their favourite white meat. And El Niño (see above), they tell us, will likely affect both crop yields and pricing until that patch of warm water sloshes back to the Western Pacific in the fullness of time.
Comment: Poultry is more prone than most to the vagaries of economics, geopolitics and climate. It takes a resilient company to survive in this sector.
TRADE ENVIRONMENT
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Interest Rate Take a hike!
All eyes are on the Reserve Bank this week, whose money policy committee is deliberating weightily upon the raising of the interest rate on tomorrow. The rate went up by 75 basis points last year and 25 this year, driven thither by a weak rand, a rising inflation outlook, the likelihood of the US federal reserve raising rates in December and increased food prices due to the ongoing drought. Against this needs to be balanced slow economic growth back home and lower oil and commodity prices globally. Thirteen leading economists have been polled on what the Bank is likely to do: eight are arguing for clemency and the rest for a hike of 25 basis points.
Comment: When all you have is a nail, every solution looks like a rate hike, or something.
IN BRIEF
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Pioneer Foods Tomorrowland
Hooray! The Commission has approved the merger between Pioneer Foods and cereal- maker Futurelife, subject to a couple of piffling conditions which will have no material effect on the commercial aspects of the undertaking. The deal will bring a whole new category (“functional foods”) to the Pioneer stable, and the weight of Pioneer’s manufacturing and route-to-market capacity to Futurelife. Nice one.
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Food Lover’s Market Full of beans
So Food Lover’s Market have acquired a stake in the Seattle Coffee Company, in the belief (their words, not ours) that “consumers identify with Seattle’s distinctive brand values, which speaks to fantastic quality coffee, a Fair Trade approach to working with farmers and passionately trained baristas.” We do enjoy us a little passion with our Barista.
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IMPERIAL Everything they’re cracked up to be
A big week for the dramatically-capitalled IMPERIAL Logistics, whose Fast ‘n Fresh division has just signed a R20million distribution contract with Nulaid eggs. This hefty fee will cover the movement of 12million eggs every year, the planning for which will be conducted by IMPERIAL’S partner Resolve. A tricky business, transporting eggs, or so we’re told.
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