Food & Beverages

Treasury Wine’s posh-plonk split calls for a toast

9 Apr 2020

The $5 bln Australian winemaker could spin off its prized Penfolds business. That should deliver a higher valuation for the upmarket label and separate it from a ragbag of other brands that need restructuring. A coronavirus-induced glut of luxury grapes will eventually help, too.

Wall Street stuck with Luckin Coffee dregs

7 Apr 2020

Morgan Stanley, Credit Suisse and others face big losses after the founder of Starbucks' Chinese rival defaulted on $518 mln of loans amid fraud charges. The lenders are stuck offloading a huge stack of share collateral in a falling market. It’s the price of blindly chasing fees.

Today’s virus vices store up tomorrow’s problems

6 Apr 2020

The pandemic is encouraging people to give in to baser temptations. Porn, booze, tobacco, weed and chocolate consumption is rising. It’s perhaps understandable: Even the WHO reckons stress needs to be managed. But excesses now will only add to a bleaker and costlier future.

Thruppence: A guide to Covid-19 lockdown pursuits

3 Apr 2020

Roughly half the world’s population is now subject to social restrictions because of the coronavirus. That makes weekends a new kind of challenge. In an occasional series where Breakingviews columnists give more than their usual tuppence, here’s how some are spending their time.

Luckin spills hot bezzle over credulous investors

2 Apr 2020

Fraud expands with good times and emerges in bad. A U.S.-listed Chinese coffee-shop disruptor once worth $13 bln just said much of its revenue last year may be fictitious. In this case, it didn’t take a downturn, just auditors doing their job. Just wait until the tide goes out.

Meal couriers can gain by cutting the grocery line

1 Apr 2020

The likes of Uber Eats and Deliveroo may suffer from lockdown-induced restaurant closures. Meanwhile, grocery giants are struggling to deliver all the tinned goods and pasta that punters desire. That’s a recipe for cooperation, and perhaps profits for the cash-starved sector.

Corona Capital: Rich vs. poor, Carnival

31 Mar 2020

Concise views on the pandemic’s corporate and financial fallout: The rich may save even more while the coronavirus rages while the poor will be further squeezed, and Carnival tries to bail out its sinking cruise business with a big sale of equity and debt.

Meituan Dianping delivers extra side of ESG

31 Mar 2020

The $58 bln Chinese takeaways-to-taxis company expects a rough first quarter after Covid-19 closed eateries and curbed travel. With the outlook hazy, Meituan instead directed investors to the aid it’s providing customers. The initiatives may be useful in a fight against Alibaba.

Rice jitters suggest nations can panic-buy too

27 Mar 2020

Iraq wants to stock up on the staple, while Vietnam may curb exports to ensure enough food to ride out the coronavirus storm. It’s not yet out of hand, but prices are creeping up. And unlike with shoppers, there’s no global policeman to man the checkout if hysteria takes hold.

Mexico cans Corona plant in unaffordable sideshow

24 Mar 2020

The country’s president held a referendum that nixed Constellation Brands’ massive brewery, as the nation faces a manufacturing pullback, rock-bottom oil prices, and a weak peso. Rigid nationalist, anti-corporate politics can be costly in normal times – let alone in a crisis.

Tortuous Japanese hotel deal takes viral twist

20 Mar 2020

Unizo is backing a sweetened $1.9 bln bid from Lone Star that matches Blackstone’s price. Top owner Elliott is ready to accept, eight months into the bidding war. Fresh Covid-19 volatility may accelerate an endgame, but also calls into question the frontrunner’s takeover plan.

Kraft Heinz shows long shelf life has virus limits

18 Mar 2020

The $29 bln ketchup maker is one of the few packaged-foods producers whose stock has sagged during the Covid-19 outbreak. Consumers stocking up on canned and boxed goods have already prompted General Mills and Campbell Soup to raise earnings guidance. Kraft’s debt holds it back.

Lockdowns mean heartburn for meal-delivery market

16 Mar 2020

The $123 bln sector, which includes Uber and Meituan, may sound like a winner as the coronavirus keeps diners indoors. Yet the key office-lunch market is collapsing, and panic buying has filled home kitchens with groceries. Paying sick drivers will add to the financial strain.

Pinduoduo feels Chinese small shopkeepers’ pain

12 Mar 2020

Petty online merchants hit by the coronavirus outbreak will weigh on the $41 bln e-commerce group’s earnings. Unlike rival Alibaba, Pinduoduo doesn’t host many big brands. The company may have to burn a lot of cash subsidising its stable of struggling mom-and-pop outfits.

PepsiCo buys energy kick to keep up with Coke

11 Mar 2020

The soda and snack company’s $4 bln purchase of Rockstar energy drinks fills a gap in its portfolio that Coca-Cola has already got covered. Pepsi has lagged its nemesis in growth and valuation. Rockstar should help close that gap, even if it’s hardly a bet on healthy lifestyles.

Tesco’s Asia retreat seals humdrum UK future

9 Mar 2020

The retailer sold its Thai and Malaysian units for $10.6 bln. The price of 12.5 times EBITDA suggests CEO Dave Lewis prioritised a fast sale. Investors will pocket a 5 bln pound special dividend. With a clear focus on its dominant British business, Tesco will be safer but duller.

Sysco may risk indigestion with stodgy German meal

5 Mar 2020

The $36 bln cafeteria supplier is eyeing European wholesaler Metro. It’s an odd move for new CEO Kevin Hourican, who led CVS’ pharmacy roll-out. Europe’s weak growth and profitability mean he would need a bargain to make the deal work. And the target’s noisy owners won’t help.

DoorDash puts its valuation to the taste test

4 Mar 2020

The SoftBank-backed delivery service filed for an IPO as coronavirus puts extra strain on investors already wary of tech listings. Even on a good day, it may be worth about 40% less than its last $13 bln price tag. Owners are in for a reckoning whether they sell shares or not.

Beyond Meat is sliding down the food chain

27 Feb 2020

The plant-based meat maker’s revenue growth decelerated to 212%. And competitors have only just started to flood the market with their own alt-meat. That threatens to hit Beyond Meat in two ways: the amount it can sell, and the pricing power reflected in its 34% gross margin.

Consumer giants take rosy view of epidemic damage

26 Feb 2020

Spirits maker Diageo reckons the coronavirus outbreak could cost it 325 million pounds in sales this year, while Danone is forecasting a 100 million euro hit. But neither is factoring in the effect of the disease spreading much beyond Asia. Investors are already more bearish.