Business Irish

Friday 19 September 2014

Business week in 60 seconds: sanctions, tax inversion

Russian ban on food imports ratchets up economic tension

Published 10/08/2014 | 02:30

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Putin: tensions

Tensions between Russia and the West have escalated as the country announced a ban on fruit, vegetable, meat, fish, milk and dairy imports from the EU, US, Australia, Canada and Norway.

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The decision follows a decree signed by Russian 
President Vladimir Putin ordering the government to ban or limit food imports from countries that imposed sanctions on Moscow for its support of rebels in eastern Ukraine and for the annexation of Crimea.

The ban came into effect on Thursday and will last for one year.

No housing bubble, says ESRI

The Economic and Social Research Institute (ESRI) claimed last week that there was no bubble in house prices, but said they would continue to rise strongly for another three years.

And the influential think tank said property prices were still undervalued, despite the surges seen this year.

More broadly, the ESRI forecasts that the economy 
will grow 3pc this year, as measured by GDP - much stronger than the 2.1pc estimate from the Department of Finance.

It also said unemployment would dip to below 10pc by the end of next year for the first time in six years. That's a year earlier than the Government believes.

Walgreens skips tax inversion

US pharmacy giant Walgreens said it will keep its tax domicile in the US as Congress there piles pressure on American companies that engage in so-called tax inversions.

Walgreens had been under pressure from investors to shift its tax domicile to Switzerland or Britain as part of its high-profile buyout of Boots, which was announced last week, but the administration of US President Barack Obama said on Tuesday that it was considering steps to curb such deals.

The pharmacy company's retreat is the third major possible tax "inversion" deal to collapse in recent months amid heightened political sensitivity in the United States to such transactions.

Dunnes lifts market share

Dunnes Stores is fighting back in the supermarket wars. It has managed to lift its share of the grocery market in the past 12 weeks while both Tesco and SuperValu lost ground.

The latest supermarket industry figures from Kantar World Panel show Dunnes Stores recorded a sales increase of 2.6pc to hold its 21.2pc share of the market for the 12 weeks ending on July 20.

Lidl and Aldi also both continued to grow their share of the market.

Lidl's share now stands at 8.4pc, while Aldi's is 
8.3pc - the highest level each for the two German-owned chains.

Sales boost for Kerry Group

Kerry Group posted sales growth of 3.3pc over the first six months of 2014, despite "challenging conditions in many markets".

The group's report mentioned that consumers are opting for own-label brands from discounters such as Aldi and Lidl in greater numbers.

Kerry Group's revenue was €2.9bn with trading profits increased by 3pc to €275m.

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