A relatively new company called Tangerine Confectionery, which was formed in January 2006 has bought Cadbury’s Monkhill confectionery. This buyout makes Tangerine confectionery the new owners of Butterkist, the popular popcorn brand. The sale price is still under wraps but sources speculate that the sale will fetch the global confectionery giant Cadburys an excess of £250m.
Momkhill’s currently employs over 800 personel and they will be a significant addition to Tangerine’s global workforce strenght. Butterkist popcorn will be a interesting addition to Tangernine’s portfolio which is already teeming with brands such as Princess, Taverners and Mojo.
Three of the UK’s biggest internet service providers - BT, Carphone Warehouse’s TalkTalk and Virgin Media – have joined hands in order to use a new advertising platform that will allow them the access to the growing online targeted-ad market. They have signed up for using a system that is created by Phorm. This system connects advertisers, websites as well as ISPs with the intention of producing a more targeted ads depending on a user’s anonymous browsing tendency.
Phorm believes that most advertisers will easily agree to pay more in order to place ads on sites that have subscription to the Open Internet Exchange (OIX) marketplace. This is so because the advertisements will be more applicable to users depending on their previous searches.
The Internet advertising sector has really grown in the past few years. As per a report by media-buying firm ZenithOptimedia, the average spending on the internet would grow by 69 per cent in the coming three years. The internet will have roughly about 11.5 per cent share of all advertising budget by 2010. it is expected to become the third largest medium, just a little behind television and newspapers. Phorm and the ISPs will enjoy a boost in revenue due to the process. Phorm has signed up websites belonging to the Financial Times and iVillage, and advertising agencies like Universal McCann.
CVC Capital Partners and Blackstone, the two private equity firms, are said to be readying a bid for the known pubs group Mitchells & Butlers. The move would involve shareholders keeping about 50% stake. Their bid would try to head off a rival bid from Punch Taverns.
The two PE firms are believed to be aiming to snap up M&B, but wish to give shareholders an opportunity to continue owning nearly half the business. This kind of deal often takes place when a bidder looks only to have a controlling stake. Analysts doubt as to whether parties interested could raise the required funding, given the bad state of the credit markets. This arrangement would overcome the credit problem.
A long-time rival M&B, Punch, tried to pounce on the firm just at the beginning of February 2008 with an all-share merger proposal. This followed M&B revelation that it had incurred potential and realised losses of nearly £422m from hedging bets tied to a doomed property deal. The hit will take out over two years’ profits. Other PE firms, including TPG and Cinven, are also said to be interested in M&B. All eyes are on property tycoon Robert Tchenguiz who has about 23% of the popular pubs company.
Supermarkets that make use of their business size for forcing down prices are going to get penalised under a proposed plan that seeks to encourage greater competition and thus more choice for consumers. The Competition Commission, it is expected, will recommend changes for discouraging chains from building local monopolies thereby forcing out smaller stores. An ombudsman is proposed for supervising the relationship between Sainsbury’s, Tesco, Morrisons, Asda and their suppliers. The recommendations are followed by a two year inquiry into the grocery sector worth £1.23bn. Figures indicate the supermarkets’ ‘stranglehold’ has forced out many smaller rivals. The four supermarkets account for a nearly 75% market share.
The ombudsman, it is expected, will carry power to penalise firms for sudden and sharp price cuts, and ‘pay-to-stay’ fees for keeping goods on shelves. Large retailers who fail to meet competition standards could face refusal of planning applications. If there is no competition in (certain) local markets, it’s disadvantageous to people in those areas. It also prompts retailers weakening their offer to customers nationally, the commission has stated. Its provisional findings in October had pointed out at least 200 areas where consumers hardly had a choice of shopping. It was also discovered chains were allegedly buying up land to prevent rivals coming up with competing stores.
Reckitt Benckiser stated strong growth from recent acquisitions - Strepsils and Nurofen - assisted it deliver a 15 per cent increase in full-year profits. The Anglo-Dutch firm of household products had net income of nearly £905 million in 2007 - aided by growth in revenues of nearly 7 per cent (£5.27 billion). Reckitt added brands like Air Wick Freshmatic and Vanish Oxi continued to do well whereas the Boots healthcare business that was acquired in 2006 for £1.93 billion had a 10 per cent ‘like-for-like’ sales improvement. The firm said this mirrored ‘substantial growth’ from Nurofen, Strepsils and Clearasil.
Reckitt owns other brands such as Disprin, Gavescon and Lemsip as well as many household products, including Dettol detergent, Calgon water softener and Cillit Bang. It just recently completed the cough mixture firm Adams’s acquisition for nearly £1.1 billion. The chief executive, Bart Becht, termed 2007 a ‘great year’, adding that the revenues growth was projected between 6 and 7 per cent in the coming year apart from a net income increase of 10 per cent. The first half of 2008 will witness many product launches that include a new Cillit Bang version for removing stains from surfaces in areas like the garage and kitchen. Europe generates over 50 per cent of the firm’s sales.
Orange and T-Mobile will mutually test a mobile TV service in West London during the later half of 2008. This service will include twenty four TV channels and ten radio stations that will be delivered to multimedia-enabled mobiles phones over 3G UMTS spectrum. The pilot will be for six months and it will utilise the TDtv platform from software and systems company Nextwave Wireless. The company utilizes mobile broadcast multicast service technology.
The pilot is basically targeted at indicating how the price of providing mobile TV can be made cheap when operators distribute unpaired 3G spectrum. It also wants to prove that good demand is there for these services. The channels are will possibly include some of the most admired UK broadcast television channels as well as radio stations. TDtv was effectively trialled in Bristol in 2007 by Orange, Vodafone, Telefonica and 3UK. The Product and innovation director at Orange - Paul Jevons - said the London pilot is a brilliant way to suitably explore the immense potential obtainable to the customers from the technology. T-Mobile is a company that is dedicated to broadening mobile TV’s charm through content as well as user experience.
After a decade-long battle to prevent illegal file-sharing, the beleaguered music industry has finally agreed to give fans what they’ve always demanded - an unlimited supply of free legal songs. Illegal music downloads have jumped up over the last few years due to increasing access to CD replication hardware/software and high speed broadband internet.
With CD sales falling and legal downloads yet to bridge the gap, the industry has decided to embrace the file-sharing technology, albeit with reluctance since it almost threatened to strike at its roots. Digital service Qtrax has just announced that it would come up with a catalogue of over 25 million songs to be downloaded to retain, free - without any restriction on the number of tracks.
The service has been endorsed by most leading record companies, including Universal Music, Warner Music and EMI, which have fought file-sharers in the courts to stop piracy. The gamble is that music fans won’t mind some amount of advertising around jukebox of the Qtrax website in lieu of authorised use of almost all songs available. The service will make use of the ‘peer-to-peer’ network that comprises not only hit songs but rarities & live tracks from the world’s popular artists. It is felt that incompatibility with the iPod player won’t put music lovers off, though Qtrax has already mentioned of an ‘iPod solution’ to be made public in April 2008.
Online banking in UK is not too popular. Only a third of the population manages their finances online. A research of banking behaviour from Forrester Research, researched the perceptions of roughly 4,000 UK consumers. They found that a major reason for this is that UK customers are satisfied with the services provided by the branch as well as phone banking services. According to principal analyst Alyson Clarke, the banks are missing out by not having a good online relationship with their customer. She feels that banks will benefit by developing online connect with their consumers. This way, they can target their customers better. The banks will also have better control over their customer services.
As part of the research into online customer service, a trial query was sent to online financial services institutions. It was found that almost 53 per cent of UK banks were not able to deal with the query in an effective manner. Most of the UK companies received a rating ranging between three and six out of 10 for their online service. The research also found out that almost 35 per cent of German and UK banksdid not provide any contact email address on their site. Among those who did bother to give an email id, 18 per cent did not find it important to reply to the online queries received.
Due to pressure from Motorola’s investor, Carl Icahn, the motorola handset business may be restructured. This is because of the loss in business on the hand-sets and its struggle to maintian its marketshare. According to last year’s figures, the company has incurred about 42% loss on stocks and the sale on the hand-set units lost about $388 million in the last quarter of the year.
Unfortunately Motorola has been loosing its market shares against Nokia, Samsung and Sony Ericsson. In the business race, Samsung took over Motorola’s second position last year, and now Sony Ericsson is overtaking Motorola’s third position this year.
According to Greg Brown, President and Chief Executive at Motorola, “We are exploring ways in which our mobile devices business can accelerate its recovery and retain and attract talent while enabling our shareholders to realize the value of this great franchise.”
Apart from manufacturing hand-set units, Motorola also manufactures wireless network equipment, set-box top and modems. Sale on the wireless network grew to about 35% last quarter of the year, while revenue on modem and the set-box top grew to about 35%.
Regulator Ofcom has helped UK’s mobile operators save millions of pounds per year. Under the present system, when a call is sent to a mobile either from a fixed-line or a mobile phone, the network of the individual making the call has to pay the network that receives the call. Ofcom has reduced the rate that operators can charge each another for connecting calls. So for the first time, third-generation network 3 as well as other 3G providers will see a new “termination rate” charges of 5.9p per minute. UK’s other four major operators will be subject to rates of 5.1p per minute, irrespective of whether the call is connected over 2G or 3G.
For T-Mobile and Vodafone, the rate changes means a 20 percent reduction. For O2 and Orange it will result in a 10 percent reduction. Ofcom believed that the networks would be able to save roughly in the range of £400m and £500m over a period of four years. It also expects that these savings will be passed on to the consumers. An O2 spokesman believed that call rates are supposed to come down all across the board due to competition. He also felt that fixed-line telcos will be the biggest beneficiaries and they may pass on their savings onto consumers. However, chief executive of telco Cable & Wireless, Jim Marsh, feels that network customers will have to face the brunt by paying more for calling mobile users.