Business and financeGulliver

Thermostat controls in hotel rooms are often placebos

PLACEBOS are everywhere. Drugs firms sell red pills because customers are convinced that they are stronger than white ones. Pressing the button at some pedestrian crossings makes no difference to when the green man appears, but makes us feel proactive. And the “doors close” request in a lift serves no purpose other than to soothe the frustration of impatient riders.

Add another placebo to the list: thermostat controls in hotel rooms. An investigation by the Wall Street Journal has confirmed what many of us already knew deep down: “It’s not your imaginations. Hotel thermostats often aren’t under your control.”

The Journal reports:

The humble hotel wall thermostat, once just a mechanical temperature sensor and fan-speed switch,…Continue reading

Read more 0 Comments
ApprovedBusinessBusiness and finance

TVs: the next testing scandal?

Plug and pay

VOLKSWAGEN, a German carmaker, has been disgraced for designing clever software that allowed it to cheat on emissions tests for diesel cars. A different scandal, with shades of the VW affair, has been building up in America’s television market. South Korea’s Samsung and LG, along with Vizio, a Californian firm, stand accused of misrepresenting the energy efficiency of large-screen sets. Together, they sell over half of all TVs in America.

In September 2016 the Natural Resources Defence Council (NRDC), an environmental group, published research on the energy consumption of TVs, showing that those made by Samsung, LG and Vizio performed far better during short government tests than they did the rest of the time. Some TVs consumed double the amount of energy suggested by manufacturers’ marketing bumpf. America’s Department of Energy (DoE) has also conducted tests of its own that have turned up big inconsistencies.

Not all TV-makers are at fault: the NRDC found no difference in energy-consumption levels for TVs made by Sony and Philips. But class-action lawsuits have already been filed against the…Continue reading

Read more 0 Comments
ApprovedBusinessBusiness and finance

The market for alternative-protein products

MOST people like to eat meat. As they grow richer they eat more of it. For individuals, that is good. Meat is nutritious. In particular, it packs much more protein per kilogram than plants do. But animals have to eat plants to put on weight—so much so that feeding livestock accounts for about a third of harvested grain. Farm animals consume 8% of the world’s water supply, too. And they produce around 15% of unnatural greenhouse-gas emissions. More farm animals, then, could mean more environmental trouble.

Some consumers, particularly in the rich West, get this. And that has created a business opportunity. Though unwilling to go the whole hog, as it were, and adopt a vegetarian approach to diet, they are keen on food that looks and tastes as if it has come from farm animals, but hasn’t.

The simplest way to satisfy this demand is to concentrate on substitutes for familiar products. “Meat” made directly from plants, rather than indirectly, via an animal’s metabolism, is already on sale for the table and barbecue. Impossible Foods, a Californian firm, has deconstructed hamburgers, to work out what gives them their texture and…Continue reading

Read more 0 Comments
ApprovedBusinessBusiness and finance

America’s booming pet health-care business

AT THE 42,000-square-foot clinic in Hollywood that is owned by VCA, an animal-hospital chain, you may find a Pomeranian on a course of stem-cell therapy or a Shih Tzu having a hip replacement. There is even an underwater treadmill for cats. As pets are treated more and more like members of the family, so they are getting more health care. That also means they are racking up bigger vet bills for their owners.

That is the backdrop to the purchase in January of VCA by Mars, a firm best known for selling chocolate and sweets, for $9.1bn. Analysts whistled at the 31% premium Mars offered on VCA’s share price at the time, but they also agreed that the deal reflects the industry’s vitality. Spending on animal clinic visits in America has increased from a total of $13.7bn in 2012 to almost $16bn last year.

The deal is not as out of character for Mars as it may appear. Sales of chocolate are declining. The company is second only to Nestlé in the market for pet food in America, but competition from sellers on Amazon has sent the firm towards animal health. It was in 2007 that Mars bought Banfield Pet Hospital, then VCA’s largest rival. Since then…Continue reading

Read more 0 Comments
ApprovedBusinessBusiness and finance

Beating Apple, Xiaomi and the gang in China

DONGGUAN, a southerly Chinese city near Hong Kong, is better known for cranking out cheap trinkets than for producing high-end equipment of any kind. And yet, amid the grit and grime is a gleaming low-rise factory producing some 50m smartphones a year for OPPO, a firm started by China’s BBK Electronics but which is now run independently.

Inside, as well as the usual assembly lines and serried workers, the factory has dozens of staff in quality engineering and testing, conducting 130 different tests on OPPO’s phones before they are released to the market. Such zealous pursuit of quality would be expected of factories that produce phones for Apple—the world-class facilities run by Taiwan’s Foxconn in nearby Shenzhen house similar teams. But it is unusual at a firm that makes relatively inexpensive handsets for the local market.

OPPO, and its sister firm, Vivo, also a child of BBK, started out in 2004 and 2009 respectively, making cheap and cheerful phones like plenty of other obscure Chinese manufacturers. They probably didn’t even register on Apple’s radar. Xiaomi was the Chinese handset-maker to watch; urban sophisticates, enticed by…Continue reading

Read more 0 Comments
ApprovedBusinessBusiness and finance

The challenges for ExxonMobil’s new boss

WITH an institutional culture that lies somewhere between the marines and the boy scouts, ExxonMobil tends to avoid personality cults. Even so, it is surprising how little is known about Darren Woods, the chief executive who last month succeeded Rex Tillerson, America’s new secretary of state. Mr Woods’s Wikipedia biography is a few lines long. Rather than reveal the year of his birth, ExxonMobil just says he is 52. Never mind: the most significant fact about him is that he comes from the refining and chemicals side of the business, which hums along so efficiently that ExxonMobil is widely considered the world’s best “integrated” oil company. Yet it is upstream—the exploration and production part—where his hardest tasks lie.

On January 31st the company reported another year of plunging profits, which have buffeted its share price since 2014 (see chart). It earned less in a year than it used to earn in a quarter, and also less than Exxon made before its $80bn merger with Mobil in 1999. Profits among its “Big Oil” peers have likewise been clobbered by falling oil prices over the past two and a half years. It is also not…Continue reading

Read more 0 Comments
ApprovedBusinessBusiness and finance

Logistics companies fear the return of hard borders

DURING the day, Leipzig’s airport is quiet. It is at night that the airfield comes to life. Next to the runway a yellow warehouse serves as the global sorting hub for DHL, a delivery firm owned by Deutsche Post of Germany. A huge extension, which opened in October, means it can sort 150,000 parcels each hour, says Ken Allen, DHL’s CEO. It was built as business soared. But the express-delivery industry faces a new challenge: the return of trade barriers due to the protectionist bent of Donald Trump and because of Brexit.

The slower-moving shipping and air-cargo business has long been in the doldrums as a result of slow overall growth in trade in recent years. Yet the rise of cross-border e-commerce has still meant booming business for express-delivery firms. On January 31st UPS revealed record revenues for the fourth quarter of 2016; FedEx and DHL are expected to report similarly buoyant results next month. Since 2008 half of the increase in express-delivery volumes has come from shoppers buying items online from another country.

Falling trade barriers have greatly helped them. When DHL and FedEx were getting going, in the 1970s,…Continue reading

Read more 0 Comments
ApprovedBusiness and financeFINANCEFinance and economics

India floats the idea of a universal basic income

Basic needs

NOVEMBER 8th was not just the day of Donald Trump’s election. It was also when Indians found out most banknotes would lose all value unless promptly exchanged. Ever since, many have expected their patience in enduring the ensuing chaos to be rewarded in some way. Might scrapped cash unredeemed by presumed tax-dodgers be recycled into a lump-sum payment to each and every citizen? Or would the annual budget, presented on February 1st, be full of giveaways ahead of a string of state elections? In the event, the budget was restrained to the point of dullness. But the government’s closely-watched “economic survey”, released the previous day, hinted at a much bigger giveaway in the works: a universal basic income (UBI) payable to every single Indian.

The idea of a cash payment made to citizens irrespective of their wealth is centuries old. It has become newly fashionable in some rich countries, among both left-wing thinkers (who like its redistributive aspects) and their right-wing foes (who think it results in a less meddlesome state). The idea has had its fans in India: a small UBI scheme was launched as a pilot…Continue reading

Read more 0 Comments
ApprovedBusiness and financeFINANCEFinance and economics

Emerging markets’ Trump tantrum abates, except in Turkey

THE Syrian consulate in Istanbul’s elegant Nisantasi quarter is a busy spot. Men huddle outside in the cold, waiting for their turn to slip through the building’s ornate doors. The rest of the neighbourhood is, however, unusually subdued. A string of terrorist attacks in the city and an attempted coup in July, followed by a purge of suspected sympathisers, has dampened spirits. “After a bomb goes off, no one goes out. A week is lost,” says one shopkeeper.

Besides war next door and terror at home, Turkey’s economy has been rocked by political upheaval farther afield: the lira has plummeted by over 15% against the dollar since America’s election on November 8th. Many tenants cannot now afford Nisantasi’s rents, often priced in foreign currency. Even the childhood home of Orhan Pamuk, Turkey’s best-known novelist (pictured), has a “for rent” sign on the door. 

Back in November, Turkey had a lot of company in its economic misery. Other emerging markets also reacted badly to America’s election result, prompting talk of a “Trump tantrum” to match the “taper tantrum” after May 2013, when America’s Federal Reserve…Continue reading

Read more 0 Comments