EU to modify Coca-Cola monopoly

EU regulators have created a new legislation allowing them to curb Coca-Cola’s European monopoly without costing the soft drinks giant years of legal battles and millions of euros in fines. Coca-Cola has been accused of securing unfair distribution deals in Europe that effectively wipe out the competition, whilst in the USA its presence on the shelves is shared equally with Pepsi. In a nutshell, drinks coolers brandishing the name cannot store other brands of soft drink, and sales targets are imposed on retail outlets. All variations of the drink must be displayed together on shelves. The new legislation, drawn up in May, will conclude the EU’s five-year anti-trust case against the multinational enterprise, by ensuring that the promises made by Coca-Cola can be enforced in the national courts. Such promises include abolishing sales targets and the requirement for all products of the same brand to be in the same location in the store, and allow non-Coca-Cola drinks to be dispensed from pumps in cafés bearing the company’s name. In the event that Coca-Cola breaks the conditions imposed by the new legislation, the case will be re-opened and could pave the way for legal action from competitors.

Europe-wide job cuts in motor industry

General Motors is to shed 12,000 staff in a bid to reduce expenses. The north American automobile manufacturers are set to slash up to 20% of its European workforce, with Germany - whose operations include Opel, Astra and Zafira - being the hardest hit. Cutbacks will start in early 2005 with the aim of saving 500 million euros in order to compensate for lack of profits. GM bosses claim that its European sector has been running at a loss for four years and that the redundancies are necessary to “ensure its long-term success”.  Other major brands of vehicle represented by GM include Sweden’s Saab and the UK’s Vauxhall lines, which could also be hit by the job cuts. Industry insiders state that the reason for GM’s financial difficulties stems from an excess of capacity in the market, forcing manufacturers to under-cut themselves and pushing them off  the playing field when they are unable to compete with increasingly falling prices. They consider that there are at least 30% more car producers in the world than the market needs and sources suggest that Volkswagen is also seeking ways to reduce its staff costs over the next few years.

However, affected staff at GM have not taken the decision lightly. Thousands of employees in Germany organised a strike beginning on October 12 with a protest rally, whilst UK workers are set to down tools shortly. Unions are against redundancies and closures of operations, although GM claims that it has little choice in the matter. A total of 50,000 employees, mostly in manufacturing and engineering positions, are estimated to have taken part in demonstrations relating to the planned reduction in headcount.

Sterling falls against euro

UK financial analysts claim that the sterling has fallen against the euro to its lowest since January 2004, a situation that it largely blames on the struggling property market. September’s house price slide in Britain is the fastest since 1995, according to RICS, and as a result interest rates are likely to remain stable until 2005 at the earliest. Economists believe that rates may have reached their peak at 4.75% after five increases in the last eleven months. This said, Nationwide and Halifax, respected housing market gurus, claim that property prices actually increased in the month of September. The upshot of this is, state analysts, that as long as the UK economy remains stable and people continue to be confident about job security, there is no reason why there should be a significant fall in home value or a rise in interest rates. They do not believe that a repeat of the late 1980s/early1990s is likely to arise.
At close of business last night, the euro was worth 69 pence.