July 28, 2025 • 19 mins
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Bloomberg Intelligence hosted by Paul Sweeney and John Tucker
-Craig Trudell, Bloomberg Global Autos Editor, discusses Samsung making Tesla AI chips in a multiyear Texas deal. Samsung Electronics will produce AI semiconductors for Tesla in a new $16.5 billion pact that marks a win for its underperforming foundry division.
-Duncan Fox, Bloomberg Intelligence Senior Consumer Staples Analyst, discusses Heineken earnings. Heineken saw a decline in beer volumes due to retailer disputes across Europe that dragged on sales and limited its ability to take advantage of the summer heat wave.
-Brendan Murray, Bloomberg Global Trade Editor, discusses the Bloomberg Big Take story: “Trump Tariffs Are Already Stunting World Growth as Markets Shrug.” As President Donald Trump barrels toward his latest tariff deadline, the damage to the global economy from American protectionism is becoming increasingly evident, even if financial markets seem to have decided they can live with it.
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Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news. You're listening to the
Bloomberg Intelligence Podcast. Catch us live weekdays at ten am
Eastern on Applecarplay and Android Auto with the Bloomberg Business App.
Listen on demand wherever you get your podcasts, or watch
us live on YouTube.
Speaker 2 (00:23):
Let's cross over to tech to Tesla. Samsung Electronics will
produce AI semiconductors for Tesla in a new sixteen point
five billion dollar pack that marks a wind for its
underperforming foundry division. What does this mean for our friends
at Tesla? Craig Trudell joins us Bloomberg Global Autos Editor Here,
Craig talk to us.
Speaker 3 (00:44):
Are what Tesla's.
Speaker 2 (00:45):
Trying to do here with this big deal with Samsung?
Speaker 4 (00:49):
Yeah, so this this is a deal for a next
generation AI chip for Tesla. So Samsung is an existing
supplier of these uh, you know, high powered semiconductors that
are used for it's driving systems that it markets as
full self driving and autopilot. Uh And and contrary to
(01:10):
those names that you know, you cannot buy a Tesla
today and have it drive itself for you. You still
need to pay attention and keep your hands on the
wheel and eyes on the road. But uh, it is
the case that those systems are are becoming more more
capable and that Tesla is trying to kind of press
the issue with them to the point where uh, you know,
(01:31):
they're they're taking people out of out of the driver's
seat and and having uh you know, supervisors in the
in the passenger seat of cars in Austin, Texas, and
and trying to to take that elsewhere as well. Uh.
This this will be interestingly. Musk announced overnight that they
will be going to a T S M C chip
(01:54):
for for the next generation of of semis that they
use and then go to Samsung, relying on on supply
from from this plant in Texas that that Samsung is
boys to to open, uh in the near future.
Speaker 5 (02:08):
And what near future? How how long does it take
to build a fab plant?
Speaker 3 (02:14):
The cool kids say fab right.
Speaker 4 (02:16):
Yeah, that's right. Yeah, I mean, I think you know
the the this is a project on Samsung's part that's
been in the worst for some time, right and and
so uh they they you know, were sort of moved
actually by the Chips Act under the Biden administration, and
Trump uh was was critical of of the Chips Act.
You know, on the on the campaign trail. And yet
(02:38):
we've seen uh sort of a continuation and somewhat of
an embrace of it, uh, you know, as we we've
seen a change in the White House. Uh in terms
of the exact timing of when exactly this new AI
chip uh you know, will will be coming out of
that Texas factory. It's it's not yet clear from from
(02:58):
Musk's posting on an X, and the companies have not
said much because you know, they of course agreed to
you know, some some privacy here that Musk proceeded to
to sort of loosen up on, you know, at least
over social media.
Speaker 2 (03:15):
Craig, do we know at this stage to what extent
Elon Musk is engaged in the day to day the
strategic of Tesla analogy stepped back from his doze responsibilities.
Speaker 4 (03:27):
I mean, I think you can you can glean so
much from his his you know, activity on X as
to what he's paying attention to. And it absolutely is
the case that we're seeing him him posting more about
things like this deal with Samsung, and I do think
that that's helpful sort of for for sentiment around Tesla.
And yet I would say too that you know, if
(03:49):
if there was a sort of you know, scorecard, sort
of an informal scorecard that you'd be keeping track of
where he's sort of devoting most of his time and
attention to. I would say it's as much or more
on XAI and just ai in general than it is
on Tesla specifically. You know, you heard from him a
few months ago that he would really be turning his
(04:11):
attention back to Tesla, uh, you know, as he was
making his way out of the White House. But I think,
you know, the amount of attention and emphasis he's put
on trying to catch up to the likes of open
AI and Google in our artificial intelligence and l MS
is you know, definitely exceeds, you know, the amount of
(04:31):
of you know, noise we're hearing from him about the
day to day interworkings of of Tesla.
Speaker 2 (04:37):
All right, excellent, Craig, thanks so much for joining us.
Appreciate your reporting there. Craig Tudell, Global autos editor for
Bloomberg News, joining us from our London h Q. Samsung
to make Tesla chips in multi year Texas deals.
Speaker 3 (04:49):
And Elon is going to actually walk walk the floor.
Speaker 2 (04:53):
He used to sleep at the in the Tesla plans
back in the day.
Speaker 1 (04:58):
You're listening to the Bloomberg and Halogen's podcast. Catch us
live weekdays at ten am Eastern on Apple Coarclay and
Android Auto with the Bloomberg Business App. Listen on demand
wherever you get your podcasts, or watch us live on YouTube.
Speaker 2 (05:12):
Stop a beer, John, I mean, oh, Audrey got a
perfect day for it, Audrick Heine can.
Speaker 3 (05:16):
You put it from yes?
Speaker 2 (05:17):
Especially with the heat today, Heinegen beer sales fall as
price dispute took longer to fit. What's going on with
our friends at Heinegill.
Speaker 6 (05:25):
Let's go to the.
Speaker 2 (05:26):
Go to a guy there. Duncan Fox, senior consumer staples
analysts for Bloomberg Intelligence, is based over there in our
London office, Queen Victoria Street, right in the center of
the city of London. Dont you talk to us about Heinegen?
What's going on there?
Speaker 6 (05:41):
Well, essentially European retailers decided not delayed pushing the prices
up after I suppose last year wasn't particularly big on
pricing and the that's three percent of the local Heinegen brown,
but the previous two years when inflation was raging, you know,
they did get fourteen and ten percent respectively in in
twenty two and twenty three. Costs of goods are not
(06:03):
really going up, so I think the retailer is just
pushed back and it took them longer to push out
to get a small price through in Europe and that's
just hit them. So it's about fifty percent of the
overall business.
Speaker 5 (06:15):
Is what is a Heineken class in the pub?
Speaker 6 (06:20):
Well, if you're in London, a heck of a lot.
It's probably st eight pounds plus I can be about ten,
which they are either the Dorset you'd be lucky to get,
you know, sort of around five to six pound. But nevertheless,
you know, when you're pushing the price up the premium
Heinegen brand, which is probably twenty percent more expensive than
(06:43):
any other sort of mainstream beer that they've got on
their portfolio, you can see why the volumes struggled in
the short.
Speaker 7 (06:51):
Term given cost of living crisis.
Speaker 6 (06:53):
So it's something they will resolve and hope they have
revolved in fact on the pricing, so one would hope
it would get better as we go to half with
That's a one that we've found in Europe.
Speaker 2 (07:03):
So we had I guess the announcement of a trade
deal between the US and the EU. I don't think
what's it mean for the spirit's business, the beer business,
the wine business.
Speaker 6 (07:14):
Asking for a friend, I hope you've already stocked up
that fifteen percent is probably is probably a good outcome
given some of the rumors that were going around from
April on was that he could have gone up to
two hundred percent. But obviously the cost of beer coming
in for someone like Harneck, and they basically ship in
(07:35):
from either Holland or Mexico. Some of the Mexican beer
may well be tariff free on the US NCA agreement,
but then you've got the out sort of the cans,
So lord knows how much that will push the price up.
But yeah, they'll just have to push prices up on
beer and spirits. Spirits at fifteen percent, probably say it's
(07:57):
not huge, but it'll mean pushing price is up three
four percent something of that order on top of what
they would normally try and get. So it's it's not
going to be easy to do, but it's not as
disastrous as thirty percent or something like that, which Renby
said last week would take profit slaand for thirty five
million euros, so a little bit better than expected or feared,
(08:21):
but it's still not going to be great and.
Speaker 7 (08:23):
US wine there really isn't anybody that.
Speaker 6 (08:25):
Exports wine that's quoted, so it's a bit difficult to
say all the impact is. But it will certainly make
it more expensive compared to your good, US great varieties
at car on the market. So I would have thought
you'll see people switch to US lines.
Speaker 5 (08:41):
I find that's kind of disturbing. This part of the
story where you quote the CEO of Heineken beer markets
have declined that it pays Heineken has rarely seen any
time before. Is this the end of humanity as we
know it?
Speaker 6 (08:57):
Well, if it carries only I think there was. There's
stories that, you know, the gen Z's have given up
and drink. I think that's that's wildly wrong. But there's
certainly people are abstaining during the week a little bit.
But the real problem is that people are drinking more
at home rather than going to the pub, and that's
sort of change. That's the big change from COVID. So
(09:20):
you've got to make sure you get your pricing at
retailers right. Goes back to your original question because people
that know it's sort of more like eighty percent drinking
at home in the US, it's anywhere between sort of
fifty and twenty percent, depends on where you're on the world,
but a lot more people drinking home and going to
POGs and clubs. So the mix is poor really or
(09:44):
has been, and it needs the good summer would help
and in these people to have a bit more money
in their pocket as well, so maybe feeling a little
bit more confident that they can go out and spend
with their friends rather than buying it cheap from and
entertaining at home.
Speaker 2 (10:02):
Doncan are you one of this is a national phenomenon
because it's a phenomenon on the Jersey Shore, which is
people are drinking like these iced tea vodka things, the
white Claws, all this stuff that's not beer.
Speaker 6 (10:14):
Are you seeing that?
Speaker 2 (10:15):
Is that a trend around the world.
Speaker 3 (10:18):
He hasn't been at my beach, by the way.
Speaker 7 (10:22):
Unfortunately, it seems to be that is a trend.
Speaker 6 (10:24):
You get a lot of ready to drinking being pushed
and they big for sort of twelve eighteen months, and
it does tend to go against the beer volume more
than anything else. Spirit companies are doing it with no
spirits now, and they're also pushing you in bigen and
tyic already to drink gin and time and stuff like that.
(10:46):
So there's just a lot more choice to the consumer
than there was, you know, when I was a kid,
So it just takes a little bit of a shine off.
You can try new things, and I'd say people are
spending more. I'm spending a similar amount on artcult just
buying less of it in terms of volume. So it's
all about getting the value right. Premium brands are doing
(11:07):
well in Premium brand did very well in these results,
but it's only twenty four percent of their overall volume,
so you know, four point five percent on twenty four
percent doesn't sort of help.
Speaker 5 (11:19):
Any chance Heinniken is going to build a brewery of
factory in the United States. I mean, I don't know
if it would be the same.
Speaker 7 (11:29):
I would say it's unlikely.
Speaker 6 (11:30):
It's that's a big commitment, and you've got to make
sure that the volume growth will be there because otherwise
you're you're spending quite a lot of cap over the
next two years. If you had a site ready today,
and then you've got to make sure that you have
enough falling through. But for that, for that to make
money for you and be better than shipping it in.
(11:51):
Even with the tariffs. At this moment, it doesn't seem
that they're likely to build a brewery in the US.
But if tarists are higher, suspective would be a challenge.
But I mean, they're building a big one in Mexico
and I suspect a ship.
Speaker 3 (12:06):
Yeah.
Speaker 2 (12:06):
Man, all right, Donki, thanks so much for joining us.
Duncan Fox senior Consumer Staples analys fro Bloomberg Intelligencies over
there in London, and they shut down the Bud brewery
in Newark right by Newark Airport.
Speaker 3 (12:17):
Did they?
Speaker 2 (12:17):
I think so? I think that I don't know as
a bush brewery right across the I didn't never hear
about that. Yeah, I think that's a thing here, Yeah,
Field Chip exactly.
Speaker 3 (12:28):
To do some investigative reporting. Exactly.
Speaker 1 (12:32):
You're listening to the Bloomberg Intelligence Podcast. Catch us live
weekdays at ten am Eastern on Apple, Coarcklay and Android
Auto with the Bloomberg Business App. Listen on demand wherever
you get your podcasts, or watch us live on YouTube.
Speaker 2 (12:45):
All Right, we got John Tucker, Paul Swing you live here,
in our Bloomberg Interactive Brokers studio, and we are also
doing that internet thing. We're on YouTube's ahead over to
YouTube dot com and search a Bloomberg Live radio and
that's where you'll find us Terras Europe. I guess we
got a deal in John, so.
Speaker 5 (13:02):
We have a deal, but I'm still begging for some
more details, especially when it comes to pharmaceuticals and autos.
Speaker 2 (13:10):
True, and with all these deals I'm expecting, don't you
have to negotiate these for like a year or two
and there's like ten thousand pages agreement or it's this
just like a one page term sheet we kind of
put across the table and somebody.
Speaker 3 (13:21):
Initial is it. We're good to go.
Speaker 7 (13:23):
I don't know.
Speaker 5 (13:24):
Somebody's got answers.
Speaker 3 (13:26):
Let's go to Brendan Marry. You might Brenda Marry.
Speaker 2 (13:28):
He's a Bloomberg God. Big take story today entitled Trump
tariffs are already stunting world growth, but the markets are
shrugging here, So let's get to it. Hey, Brendan again,
another big trade deal announcement today with the European Union.
They're coming fast and furious.
Speaker 7 (13:46):
You know. I guess if you're looking at the.
Speaker 2 (13:47):
Economic data, I'm not sure we've seen any slowdown in
the economy. I'm not sure i've seen any pickup inflation,
which were two of the concerns for a lot of
people out there.
Speaker 3 (13:56):
What is your reporting show?
Speaker 8 (13:58):
Yeah, our reporting shows that when you look at what
companies are saying their capital investment plans are and what
they're saying about how they're going to try to absorb
these costs, whether those are in margins or passing those
costs on the consumers, that these tariffs are starting to
take a bite. They're not happening all of a sudden.
(14:19):
It's this kind of slow grind on the economy that
we're seeing, and you can see it in some of
the in some of the of the surveys that the
government or private surveys that are that are are reported.
So the lesson here is that you don't just flip
a switch and get inflation overnight. It's a slow, slow
(14:42):
moving process. And the deals that are coming in from
President Trump, the markets are celebrating because they're not the
worst case scenario, but it still makes goods. The EU deal,
let's say, makes European exports to the US fifteen percent
more expensive, So that's just the bottom line. And that's
(15:04):
that's an economic head win in any economist book.
Speaker 5 (15:09):
Hey, Brendan, when we hear Secretary Lutnik speak, for instance,
he'll be saying something like, China is going to pay
so and so is going to pay settle this for
us for people don't follow us too closely. They're not paying.
It's the consumer. It's a tax, is it not.
Speaker 3 (15:28):
The American importers pay tariffs.
Speaker 8 (15:31):
They pay these taxes to the Customs to Bureau. And
so now those importers could go to the exporter in
China or the European Union or wherever and say, hey,
this is costing me an extra fifteen percent, can you
lower your price? That happens in some cases most of
(15:52):
the time the profits of that company take a hit.
They or they pass it on and or they pass
it on to consumers. But the bottom line is they've
got less to invest in, they've got less money to
hire people. So this is this is what our reporting
shows today in the Bloomberg big take is that we
are starting to see that slow grind on the economy
(16:15):
that tariffs have, that that economists would warn you about,
that are happening now that the Trump administration would argue, look,
this is going to incentivize companies to produce more in
the United States, and some of that may actually happen,
so we shouldn't discount that completely.
Speaker 3 (16:32):
But the tariffs hurt well.
Speaker 8 (16:35):
More a lot more companies and consumers than they do help.
Look at the steel Look at steel tariffs. We've seen
an increase in domestic steel prices. There are a lot
more companies and employees of those companies that use steel
then make steel, and they are paying that they are
paying the price for it.
Speaker 2 (16:56):
So where will we see it, you know, Craig, I
mean are we seeing Will we see it in GDP numbers?
Will we see it in headline inflation numbers? And if
we do see it when, when do you think we
will see it in the hard numbers?
Speaker 8 (17:11):
Is?
Speaker 2 (17:11):
I know economists like to talk.
Speaker 8 (17:13):
About so the investment figures. We're going to watch this
week's GDP number very carefully. This is the second quarter. We're,
like the headline numbers, likely to see a bounce back.
Remember it was a negative first quarter. The second quarter
should be something in the two and a half percent range.
But if you look at the the the part of
(17:37):
that those numbers that will tell you, will give you
a clean look at how companies are investing. That number
is supposed to be flat, So there was a lot
of distortion with tariffs over the over the second quarter,
so some of that will still be some noise, but
noise or not, that's those are companies that are not
(17:57):
investing for the future in things like that will help
their productivity and their growth.
Speaker 5 (18:03):
How long does this take to wind its way through
before consumers. I mean, you've already mentioned steel, for instance,
but of the other parts of the inflation to show
up in the economy.
Speaker 8 (18:17):
It could take a couple of quarters. You know that
the Trump administration is rolling these deals out fairly gradually,
or you know they're coming quite quick quickly towards the
August first deadline, but they're going from ten percent to
fifteen percent in a lot of cases, and so you know,
we're just going to see those costs for the American
(18:40):
importer go up even higher. And what's really crushing to
a lot of these businesses is the small the small
one get The small businesses get hurt the most. The
large retailers of the world they have, you know, more
the wherewithal to withstand some of this, but it's really
the Small Business and National Retail Federation has chronicles a
(19:03):
lot of small businesses that are getting hit.
Speaker 2 (19:05):
All right, Brendon, thanks so much.
Speaker 3 (19:06):
We appreciate it.
Speaker 2 (19:06):
Brandon Mary, Global Trade Editor, Bloomberg News.
Speaker 1 (19:09):
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Listen on demand wherever you get your podcasts, or watch
us live on YouTube.
Speaker 2 (00:23):
Let's cross over to tech to Tesla. Samsung Electronics will
produce AI semiconductors for Tesla in a new sixteen point
five billion dollar pack that marks a wind for its
underperforming foundry division. What does this mean for our friends
at Tesla? Craig Trudell joins us Bloomberg Global Autos Editor Here,
Craig talk to us.
Speaker 3 (00:44):
Are what Tesla's.
Speaker 2 (00:45):
Trying to do here with this big deal with Samsung?
Speaker 4 (00:49):
Yeah, so this this is a deal for a next
generation AI chip for Tesla. So Samsung is an existing
supplier of these uh, you know, high powered semiconductors that
are used for it's driving systems that it markets as
full self driving and autopilot. Uh And and contrary to
(01:10):
those names that you know, you cannot buy a Tesla
today and have it drive itself for you. You still
need to pay attention and keep your hands on the
wheel and eyes on the road. But uh, it is
the case that those systems are are becoming more more
capable and that Tesla is trying to kind of press
the issue with them to the point where uh, you know,
(01:31):
they're they're taking people out of out of the driver's
seat and and having uh you know, supervisors in the
in the passenger seat of cars in Austin, Texas, and
and trying to to take that elsewhere as well. Uh.
This this will be interestingly. Musk announced overnight that they
will be going to a T S M C chip
(01:54):
for for the next generation of of semis that they
use and then go to Samsung, relying on on supply
from from this plant in Texas that that Samsung is
boys to to open, uh in the near future.
Speaker 5 (02:08):
And what near future? How how long does it take
to build a fab plant?
Speaker 3 (02:14):
The cool kids say fab right.
Speaker 4 (02:16):
Yeah, that's right. Yeah, I mean, I think you know
the the this is a project on Samsung's part that's
been in the worst for some time, right and and
so uh they they you know, were sort of moved
actually by the Chips Act under the Biden administration, and
Trump uh was was critical of of the Chips Act.
You know, on the on the campaign trail. And yet
(02:38):
we've seen uh sort of a continuation and somewhat of
an embrace of it, uh, you know, as we we've
seen a change in the White House. Uh in terms
of the exact timing of when exactly this new AI
chip uh you know, will will be coming out of
that Texas factory. It's it's not yet clear from from
(02:58):
Musk's posting on an X, and the companies have not
said much because you know, they of course agreed to
you know, some some privacy here that Musk proceeded to
to sort of loosen up on, you know, at least
over social media.
Speaker 2 (03:15):
Craig, do we know at this stage to what extent
Elon Musk is engaged in the day to day the
strategic of Tesla analogy stepped back from his doze responsibilities.
Speaker 4 (03:27):
I mean, I think you can you can glean so
much from his his you know, activity on X as
to what he's paying attention to. And it absolutely is
the case that we're seeing him him posting more about
things like this deal with Samsung, and I do think
that that's helpful sort of for for sentiment around Tesla.
And yet I would say too that you know, if
(03:49):
if there was a sort of you know, scorecard, sort
of an informal scorecard that you'd be keeping track of
where he's sort of devoting most of his time and
attention to. I would say it's as much or more
on XAI and just ai in general than it is
on Tesla specifically. You know, you heard from him a
few months ago that he would really be turning his
(04:11):
attention back to Tesla, uh, you know, as he was
making his way out of the White House. But I think,
you know, the amount of attention and emphasis he's put
on trying to catch up to the likes of open
AI and Google in our artificial intelligence and l MS
is you know, definitely exceeds, you know, the amount of
(04:31):
of you know, noise we're hearing from him about the
day to day interworkings of of Tesla.
Speaker 2 (04:37):
All right, excellent, Craig, thanks so much for joining us.
Appreciate your reporting there. Craig Tudell, Global autos editor for
Bloomberg News, joining us from our London h Q. Samsung
to make Tesla chips in multi year Texas deals.
Speaker 3 (04:49):
And Elon is going to actually walk walk the floor.
Speaker 2 (04:53):
He used to sleep at the in the Tesla plans
back in the day.
Speaker 1 (04:58):
You're listening to the Bloomberg and Halogen's podcast. Catch us
live weekdays at ten am Eastern on Apple Coarclay and
Android Auto with the Bloomberg Business App. Listen on demand
wherever you get your podcasts, or watch us live on YouTube.
Speaker 2 (05:12):
Stop a beer, John, I mean, oh, Audrey got a
perfect day for it, Audrick Heine can.
Speaker 3 (05:16):
You put it from yes?
Speaker 2 (05:17):
Especially with the heat today, Heinegen beer sales fall as
price dispute took longer to fit. What's going on with
our friends at Heinegill.
Speaker 6 (05:25):
Let's go to the.
Speaker 2 (05:26):
Go to a guy there. Duncan Fox, senior consumer staples
analysts for Bloomberg Intelligence, is based over there in our
London office, Queen Victoria Street, right in the center of
the city of London. Dont you talk to us about Heinegen?
What's going on there?
Speaker 6 (05:41):
Well, essentially European retailers decided not delayed pushing the prices
up after I suppose last year wasn't particularly big on
pricing and the that's three percent of the local Heinegen brown,
but the previous two years when inflation was raging, you know,
they did get fourteen and ten percent respectively in in
twenty two and twenty three. Costs of goods are not
(06:03):
really going up, so I think the retailer is just
pushed back and it took them longer to push out
to get a small price through in Europe and that's
just hit them. So it's about fifty percent of the
overall business.
Speaker 5 (06:15):
Is what is a Heineken class in the pub?
Speaker 6 (06:20):
Well, if you're in London, a heck of a lot.
It's probably st eight pounds plus I can be about ten,
which they are either the Dorset you'd be lucky to get,
you know, sort of around five to six pound. But nevertheless,
you know, when you're pushing the price up the premium
Heinegen brand, which is probably twenty percent more expensive than
(06:43):
any other sort of mainstream beer that they've got on
their portfolio, you can see why the volumes struggled in
the short.
Speaker 7 (06:51):
Term given cost of living crisis.
Speaker 6 (06:53):
So it's something they will resolve and hope they have
revolved in fact on the pricing, so one would hope
it would get better as we go to half with
That's a one that we've found in Europe.
Speaker 2 (07:03):
So we had I guess the announcement of a trade
deal between the US and the EU. I don't think
what's it mean for the spirit's business, the beer business,
the wine business.
Speaker 6 (07:14):
Asking for a friend, I hope you've already stocked up
that fifteen percent is probably is probably a good outcome
given some of the rumors that were going around from
April on was that he could have gone up to
two hundred percent. But obviously the cost of beer coming
in for someone like Harneck, and they basically ship in
(07:35):
from either Holland or Mexico. Some of the Mexican beer
may well be tariff free on the US NCA agreement,
but then you've got the out sort of the cans,
So lord knows how much that will push the price up.
But yeah, they'll just have to push prices up on
beer and spirits. Spirits at fifteen percent, probably say it's
(07:57):
not huge, but it'll mean pushing price is up three
four percent something of that order on top of what
they would normally try and get. So it's it's not
going to be easy to do, but it's not as
disastrous as thirty percent or something like that, which Renby
said last week would take profit slaand for thirty five
million euros, so a little bit better than expected or feared,
(08:21):
but it's still not going to be great and.
Speaker 7 (08:23):
US wine there really isn't anybody that.
Speaker 6 (08:25):
Exports wine that's quoted, so it's a bit difficult to
say all the impact is. But it will certainly make
it more expensive compared to your good, US great varieties
at car on the market. So I would have thought
you'll see people switch to US lines.
Speaker 5 (08:41):
I find that's kind of disturbing. This part of the
story where you quote the CEO of Heineken beer markets
have declined that it pays Heineken has rarely seen any
time before. Is this the end of humanity as we
know it?
Speaker 6 (08:57):
Well, if it carries only I think there was. There's
stories that, you know, the gen Z's have given up
and drink. I think that's that's wildly wrong. But there's
certainly people are abstaining during the week a little bit.
But the real problem is that people are drinking more
at home rather than going to the pub, and that's
sort of change. That's the big change from COVID. So
(09:20):
you've got to make sure you get your pricing at
retailers right. Goes back to your original question because people
that know it's sort of more like eighty percent drinking
at home in the US, it's anywhere between sort of
fifty and twenty percent, depends on where you're on the world,
but a lot more people drinking home and going to
POGs and clubs. So the mix is poor really or
(09:44):
has been, and it needs the good summer would help
and in these people to have a bit more money
in their pocket as well, so maybe feeling a little
bit more confident that they can go out and spend
with their friends rather than buying it cheap from and
entertaining at home.
Speaker 2 (10:02):
Doncan are you one of this is a national phenomenon
because it's a phenomenon on the Jersey Shore, which is
people are drinking like these iced tea vodka things, the
white Claws, all this stuff that's not beer.
Speaker 6 (10:14):
Are you seeing that?
Speaker 2 (10:15):
Is that a trend around the world.
Speaker 3 (10:18):
He hasn't been at my beach, by the way.
Speaker 7 (10:22):
Unfortunately, it seems to be that is a trend.
Speaker 6 (10:24):
You get a lot of ready to drinking being pushed
and they big for sort of twelve eighteen months, and
it does tend to go against the beer volume more
than anything else. Spirit companies are doing it with no
spirits now, and they're also pushing you in bigen and
tyic already to drink gin and time and stuff like that.
(10:46):
So there's just a lot more choice to the consumer
than there was, you know, when I was a kid,
So it just takes a little bit of a shine off.
You can try new things, and I'd say people are
spending more. I'm spending a similar amount on artcult just
buying less of it in terms of volume. So it's
all about getting the value right. Premium brands are doing
(11:07):
well in Premium brand did very well in these results,
but it's only twenty four percent of their overall volume,
so you know, four point five percent on twenty four
percent doesn't sort of help.
Speaker 5 (11:19):
Any chance Heinniken is going to build a brewery of
factory in the United States. I mean, I don't know
if it would be the same.
Speaker 7 (11:29):
I would say it's unlikely.
Speaker 6 (11:30):
It's that's a big commitment, and you've got to make
sure that the volume growth will be there because otherwise
you're you're spending quite a lot of cap over the
next two years. If you had a site ready today,
and then you've got to make sure that you have
enough falling through. But for that, for that to make
money for you and be better than shipping it in.
(11:51):
Even with the tariffs. At this moment, it doesn't seem
that they're likely to build a brewery in the US.
But if tarists are higher, suspective would be a challenge.
But I mean, they're building a big one in Mexico
and I suspect a ship.
Speaker 3 (12:06):
Yeah.
Speaker 2 (12:06):
Man, all right, Donki, thanks so much for joining us.
Duncan Fox senior Consumer Staples analys fro Bloomberg Intelligencies over
there in London, and they shut down the Bud brewery
in Newark right by Newark Airport.
Speaker 3 (12:17):
Did they?
Speaker 2 (12:17):
I think so? I think that I don't know as
a bush brewery right across the I didn't never hear
about that. Yeah, I think that's a thing here, Yeah,
Field Chip exactly.
Speaker 3 (12:28):
To do some investigative reporting. Exactly.
Speaker 1 (12:32):
You're listening to the Bloomberg Intelligence Podcast. Catch us live
weekdays at ten am Eastern on Apple, Coarcklay and Android
Auto with the Bloomberg Business App. Listen on demand wherever
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Speaker 2 (12:45):
All Right, we got John Tucker, Paul Swing you live here,
in our Bloomberg Interactive Brokers studio, and we are also
doing that internet thing. We're on YouTube's ahead over to
YouTube dot com and search a Bloomberg Live radio and
that's where you'll find us Terras Europe. I guess we
got a deal in John, so.
Speaker 5 (13:02):
We have a deal, but I'm still begging for some
more details, especially when it comes to pharmaceuticals and autos.
Speaker 2 (13:10):
True, and with all these deals I'm expecting, don't you
have to negotiate these for like a year or two
and there's like ten thousand pages agreement or it's this
just like a one page term sheet we kind of
put across the table and somebody.
Speaker 3 (13:21):
Initial is it. We're good to go.
Speaker 7 (13:23):
I don't know.
Speaker 5 (13:24):
Somebody's got answers.
Speaker 3 (13:26):
Let's go to Brendan Marry. You might Brenda Marry.
Speaker 2 (13:28):
He's a Bloomberg God. Big take story today entitled Trump
tariffs are already stunting world growth, but the markets are
shrugging here, So let's get to it. Hey, Brendan again,
another big trade deal announcement today with the European Union.
They're coming fast and furious.
Speaker 7 (13:46):
You know. I guess if you're looking at the.
Speaker 2 (13:47):
Economic data, I'm not sure we've seen any slowdown in
the economy. I'm not sure i've seen any pickup inflation,
which were two of the concerns for a lot of
people out there.
Speaker 3 (13:56):
What is your reporting show?
Speaker 8 (13:58):
Yeah, our reporting shows that when you look at what
companies are saying their capital investment plans are and what
they're saying about how they're going to try to absorb
these costs, whether those are in margins or passing those
costs on the consumers, that these tariffs are starting to
take a bite. They're not happening all of a sudden.
(14:19):
It's this kind of slow grind on the economy that
we're seeing, and you can see it in some of
the in some of the of the surveys that the
government or private surveys that are that are are reported.
So the lesson here is that you don't just flip
a switch and get inflation overnight. It's a slow, slow
(14:42):
moving process. And the deals that are coming in from
President Trump, the markets are celebrating because they're not the
worst case scenario, but it still makes goods. The EU deal,
let's say, makes European exports to the US fifteen percent
more expensive, So that's just the bottom line. And that's
(15:04):
that's an economic head win in any economist book.
Speaker 5 (15:09):
Hey, Brendan, when we hear Secretary Lutnik speak, for instance,
he'll be saying something like, China is going to pay
so and so is going to pay settle this for
us for people don't follow us too closely. They're not paying.
It's the consumer. It's a tax, is it not.
Speaker 3 (15:28):
The American importers pay tariffs.
Speaker 8 (15:31):
They pay these taxes to the Customs to Bureau. And
so now those importers could go to the exporter in
China or the European Union or wherever and say, hey,
this is costing me an extra fifteen percent, can you
lower your price? That happens in some cases most of
(15:52):
the time the profits of that company take a hit.
They or they pass it on and or they pass
it on to consumers. But the bottom line is they've
got less to invest in, they've got less money to
hire people. So this is this is what our reporting
shows today in the Bloomberg big take is that we
are starting to see that slow grind on the economy
(16:15):
that tariffs have, that that economists would warn you about,
that are happening now that the Trump administration would argue, look,
this is going to incentivize companies to produce more in
the United States, and some of that may actually happen,
so we shouldn't discount that completely.
Speaker 3 (16:32):
But the tariffs hurt well.
Speaker 8 (16:35):
More a lot more companies and consumers than they do help.
Look at the steel Look at steel tariffs. We've seen
an increase in domestic steel prices. There are a lot
more companies and employees of those companies that use steel
then make steel, and they are paying that they are
paying the price for it.
Speaker 2 (16:56):
So where will we see it, you know, Craig, I
mean are we seeing Will we see it in GDP numbers?
Will we see it in headline inflation numbers? And if
we do see it when, when do you think we
will see it in the hard numbers?
Speaker 8 (17:11):
Is?
Speaker 2 (17:11):
I know economists like to talk.
Speaker 8 (17:13):
About so the investment figures. We're going to watch this
week's GDP number very carefully. This is the second quarter. We're,
like the headline numbers, likely to see a bounce back.
Remember it was a negative first quarter. The second quarter
should be something in the two and a half percent range.
But if you look at the the the part of
(17:37):
that those numbers that will tell you, will give you
a clean look at how companies are investing. That number
is supposed to be flat, So there was a lot
of distortion with tariffs over the over the second quarter,
so some of that will still be some noise, but
noise or not, that's those are companies that are not
(17:57):
investing for the future in things like that will help
their productivity and their growth.
Speaker 5 (18:03):
How long does this take to wind its way through
before consumers. I mean, you've already mentioned steel, for instance,
but of the other parts of the inflation to show
up in the economy.
Speaker 8 (18:17):
It could take a couple of quarters. You know that
the Trump administration is rolling these deals out fairly gradually,
or you know they're coming quite quick quickly towards the
August first deadline, but they're going from ten percent to
fifteen percent in a lot of cases, and so you know,
we're just going to see those costs for the American
(18:40):
importer go up even higher. And what's really crushing to
a lot of these businesses is the small the small
one get The small businesses get hurt the most. The
large retailers of the world they have, you know, more
the wherewithal to withstand some of this, but it's really
the Small Business and National Retail Federation has chronicles a
(19:03):
lot of small businesses that are getting hit.
Speaker 2 (19:05):
All right, Brendon, thanks so much.
Speaker 3 (19:06):
We appreciate it.
Speaker 2 (19:06):
Brandon Mary, Global Trade Editor, Bloomberg News.
Speaker 1 (19:09):
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