CITY 45
7 May 2022 THE WEEKCommentators
“Russia’s war in Ukraine is already producing winners,” says
Dasha Afanasieva. The trick is to be a “Kremlin-friendly oligarch
lucky enough to remain unsanctioned by Washington”. Norilsk
Nickel boss Vladimir Potanin fits the bill perfectly. Worth $17bn,
according to Forbes, he has “spoken out against the confiscation
of assets of companies leaving Russia, warning it could repeat
the upheaval of the 1917 Bolshevik revolution”. But that hasn’t
stopped him buying them. Indeed, the Russian metals king has
taken advantage of the war to eat into financial services. This
week he snapped up the local wing of the US fintech group Global
Payments, adding to a portfolio that also now includes the Tinkoff
online bank, and SocGen’s Rosbank unit. Potanin isn’t the only
billionaire to stay off Washington’s blacklist – several others who
got rich in the privatisations of the 1990s are also looking at a
second bite of the cherry. The mass exit of Western groups “puts
billionaires like Potanin among the handful of potential buyers in
a market of forced sellers”. Uncle Sam needs to catch up quick.“As if returning to the office was not bad enough, the morning
coffee costs an extra 40%,” says Lex. Good news for growers in
Brazil, Colombia, Vietnam and Indonesia who account for 70%
of global output? Hardly. Smallholders who produce the bulk of
the crop receive just 2% to 6% of the supermarket price,
according to Fairtrade, and just half that tiny percentage if they’re
supplying a café in the US or Europe. The figure has slid from
around a fifth of the retail price in the 1970s, “before oversupply
crushed prices”. The structure of the industry guards against
change. The “fragmented nature of coffee growers” (there are 25
million smallholders) contrasts with the “muscle” of buyers: “just
five big houses handle half the world’s trade”. Thanks to hedges
and forward contracts, “coffee prices take time to percolate”. This
year’s frothy retail rises hark back to 2021, when raw commodity
prices almost doubled, and prices are likely to weaken as the
global cost-of-living crisis dents demand. What a shame that
growers enjoyed such “a measly share” of the boom.Perhaps the only good thing about the recession that “seems
likely pretty soon” is that it may root out some of the “Missing
Million”, says Jim Armitage. These are the estimated 1.1 million
workers who disappeared during the pandemic, with disastrous
consequences for the British economy. Nearly all sectors are now
affected by labour shortage, some acutely. “The resulting inability
of companies to satisfy demand for goods and services is one
reason Britain is set for the slowest economic growth in the G7
this year.” Roughly, a third of “the million” retired during the
pandemic; a third fled back to their home countries; and a third
were younger workers who dropped out “as a lifestyle choice”.
This generation has “never experienced the terror of a monster
recession and mass unemployment”; if it comes, most will run
in the direction of whatever work there is. The same goes for
the legions of early retirees who abandoned work because they
could afford to, having “accrued unprecedented wealth in their
properties and investments” during the low-interest years. Higher
interest rates and declining pension portfolios are likely to “jolt
them out of their sense of ease”.Coming across an “Easter egg” – the name given to an unexpected
electronic message or feature hidden somewhere in a product or
document – is often a delight, says The Economist. It feels like a
playful “wink”. If you tap the word “askew” into Google’s search
engine, for example, the results appear “somewhat off-kilter”.
And, as one might expect, Tesla cars are so jam-packed with jokes
that there is a dedicated “Easter eggs in Tesla products” Wikipedia
page. Some companies take a dim view. Microsoft banned Easter
eggs from its software in 2002, on worries that they might
introduce vulnerabilities – and “prompt questions about what else
might be lurking in the code”, or “why its engineers did not have
anything better to do”. But a new paper by Canadian academics
has highlighted just how useful Easter eggs can be in a variety of
ways: from rewarding users’ curiosity, to building hype and
recruiting employees. Witty in-jokes help reinforce brands and
instil a sense of community. Far from eroding trust, they’re a way
of “bestowing humanity on companies and their products”.Karan Chanana
UK political parties are
supposedly banned from
accepting foreign donations,
said The Observer. But the
system is as holey as a sieve.
“Companies are not required
to disclose whether
donations are sourced
from foreign funds or UK
revenues”, which may have
helped Karan Chanana – boss
of the rice brand Amira – to
donate more than £220,000
to the Conservative Party,
despite the hefty liabilities of
the group’s British subsidiary.
Chanana, 49, set out to turn
an Indian family rice business
into a major international
brand and, for a while,
succeeded. But Amira Nature
Foods was delisted from the
New York Stock Exchange
in 2020 after missing filing
deadlines, and “its rice
brands are no longer widely
available in the UK”. Perhaps
£220,000 will swing it.Clare HornbyMe+Em has “carved a
special place in busy
women’s lives by delivering
the sort of wardrobe
solutions they need, but
don’t have time to hunt for”,
said Laura Craik in The Daily
Telegraph. Founder Clare
Hornby, 52, says it’s down to
“the three Fs” – her styles
are “flattering, functional
and forever”. The label,
which she left a career in
advertising to found in 2009,
is reportedly loved by Nicole
Kidman, Sienna Miller and
the Duchess of Cambridge –
useful influencers as it
attempts to crack the US
market. Hornby, who has just
raised £55m for that purpose
(valuing Me+Em at £130m) is
“blessed with that rare,
alchemical skill set that
combines a head for figures
with a flair for creativity”. As
she observes: “You’ve got
to love the numbers as
much as the product.”Say farewell
to the Great
Resignation
Jim Armitage
The Sunday Times
Why should
coffee growers
get the dregs?
LexFinancial TimesUnsanctioned
oligarchs are
cleaning up
Dasha Afanasieva
Reuters Breakingviews
Easter eggs
all year
round
BartlebyThe EconomistCity profiles