December 1, 2025 • 17 mins
Tuesday 2 December 2025
The federal government unveils the biggest overhaul of the Defence department in 50 years.
- The medicines regulator warns of potential dire side effects of weight loss drugs.
- Metcash says it has lost $340 million in cigarette sales because of the illegal tobacco market.
- The ASX suffers another embarrassing outage.
- Consultancy group Accenture takes corporate jargon to a new level.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:06):
Welcome to Fear and Greed business news you can use. Today,
the federal government unveils the biggest overhaul of the Defense
Department in fifty years. The Medicines Regulator warns of potential
dire side effects of weight loss drugs, and mett. Cash
says it has lost three hundred and forty million dollars
in cigarette sales because of the illegal tobacco market. Plus
(00:26):
the ASX suffers another embarrassing outage, and consultancy group Accentia
takes corporate jargon to a whole new level. It is Tuesday,
the second of December twenty twenty five. I'm Michael Thompson
and good morning. Sean Aylmer.
Speaker 2 (00:40):
Good morning, Michael.
Speaker 1 (00:41):
Shown the main story this morning, the federal government will
create an independent agency to manage defense projects in what
it described as the biggest overhaul of the department in
fifty years.
Speaker 2 (00:53):
In effect, the Department of Defense will be downsized considerably,
losing about forty percent of its budget, one quarter of
its employees, and responsibility for delivering major defense projects. Three
existing divisions of Defense, once called the Capability, Acquisition and
Sustainment Group. Doesn't that roll off the tongue capability acquis,
the Statement Group, the Guided Weapons and Explosives Ordnance Group,
(01:16):
which is kind of a cool group to be part of,
and the Naval Shipbuilding a sustainment group. They'll all shift
into a newly created Defense Delivery Agency, which will be
operational from July next year, independent from July twenty twenty seven.
There's been a bunch of reviews into defense that have
recommended the creation of an independent project management agency. Yesterday,
(01:40):
Acting Prime Minister Richard Miles, who of course is also
Defense Minister. He's acting because Anthony Abernezi and Jerdy Haydnen
are on their honeymoon. So Richard Miles said the changes
will greatly improve the quality of the defense spend. He
said it's one of the biggest changes to defense ever.
It also will theoretically provide better oversight on the fense budget. Now,
(02:01):
the fence budget is huge, fifty six billion dollars two
percent of GDP that scheduled to rise to about one
hundred billion dollars by twenty thirty four. So a little
bit of an oversight it's probably a very good thing.
Speaker 1 (02:13):
Yeah, you're probably right. It sounds like a lot of money, right,
But Australia's defense budget, when you look at it as
a percentage of GDP, it is relatively small compared to
other countries.
Speaker 2 (02:26):
Yes, even after the boost in spending over the next decade,
it will still be well short of what Donald Trump
reckons regional allies like Australia should spend. He thinks we
should be spending three and a half percent of GDP.
That would mean would have to probably add another two
hundred billion dollars or one hundred billion dollars on top
of a hundred billions we've already got. Trump demanded that
(02:48):
European allies increased spending to five percent of GDP. Now
they haven't done that yet, though Poland is pretty close
to it. But undoubtedly there's a surge in defense related spending.
Now a lot of that in Europe, and potentially here
includes infrastructure. So you might build bridges between islands in Spain,
for example, and that's considered defense spending because it actually
(03:10):
is creating a defensible peninsula, as the case may be.
But certainly a lot of pressure on defense spending and
as a result, you really need much much greater oversight.
And I don't think anyone's going to stand up there
and say hate the department. Department of Defense is the
role model for transparency. It's just not and the government's
(03:32):
trying to improve it.
Speaker 1 (03:34):
So that bridge example, I think was Italy, wasn't it
with the bridge to Sicily and they were going to
call it as.
Speaker 2 (03:40):
A it was literally I said Spain, yes, yeah.
Speaker 1 (03:44):
And that particular one was, hey, this is going to
count towards increasing our GDP, which just sounds an awful
lot like creative accounting.
Speaker 2 (03:51):
Well, it's interesting. I was speaking to an expert about
that and they said, no, no, no, it's actually okay
because if you have a bridge which Sicily becomes much
more defendable, so it actually is defense spending.
Speaker 1 (04:05):
Also feels like it gives you something easy to target.
Target the tridge right anyway, just on the defense topic, though,
Richard Miles yesterday said that Australia is monitoring a naval
flotilla that is traveling through the Philippine Sea with an
unknown destination.
Speaker 2 (04:20):
That's right, the Philippine seas well north of Australia. It's
north of Papua New Guinea in Indonesia. But the government
is keeping a very close watch on the flotilla. In
February this year. Of course, the Chinese fleet circumnavigated Australia
in act not considered friendly by the ALP government, and
it's going to be very close watch on this one.
Speaker 1 (04:41):
Yeah, Okay, turning from defense to the markets, how do
the ASX go? Yesterday?
Speaker 2 (04:47):
There's some PAX two hundred fell a little over half
a percent to eight five hundred and sixty five points.
Health Care stocks led the market lower. C as Hell
and Sigma both off one point four percent. Consumer staples
were also lower. The Big Bank dropped. Bit of rotation
going on at the moment, Michael out of financials into
materials that happened to gain yesterday. That's as a result
(05:07):
the HP Fortescu, Metals Group, Rio Tinto were all higher.
Speaker 1 (05:11):
And plenty more to talk about later with the absolute
debarcle that went on yesterday for the ASX, but we'll
do that in a moment. Bitcoin has fallen back below
eighty six thousand US dollars a unit markets, fearing uncertainty,
particularly in the US economy.
Speaker 2 (05:26):
That's right. Other cryptos fell as well. Ether was down
seven percent, Solano dropped eight percent. Otherwise, in global markets,
US President Donald Trump said he's decided on his pick
for the next Federal Reserve chair, and he expects that
nominee to deliver inter straight cuts. Don't know who that
might be, but we'll wait and see. In currency markets,
(05:48):
the Aussie dollar is trading about that sixty five and
a half US sense.
Speaker 1 (05:52):
And that's the subject of today's Q and A Sean
coming up after the show. You're speaking with Ray Attrell
from NAB.
Speaker 2 (05:59):
That's exactly right, Foreign currencies, the Asie dollar. I did
a thesis on the Aussie dollar when I did my
honors year at university.
Speaker 1 (06:08):
Only finding this out now, well.
Speaker 2 (06:11):
I don't think it was a very good thesis, but
it's kind of interesting. The Adsie doll. It matters so
much because it's the pricing mechanism for everything that goes
in and out of the country. Yet what drives it
is changing, and so you talk to Ray like, we're
always a commodities currency that seems to be changing, and
we talked to Ray about that. It's really really interesting,
particularly when you spend so much for your time doing
(06:33):
a thesis on foreign exchange.
Speaker 1 (06:35):
Yeah, it's probably not. It's probably not the kind of
thing you open conversations with.
Speaker 2 (06:39):
Is it like I did a thesis you like you'd
like to meet you know, at that age in your
early twenties and you're trying to meet people, and so
what's your thesis on the Aussie dollar? Never got me
very far, Never got me very far.
Speaker 1 (06:54):
That's a one way ticket to single town anyway. Quick
freak back in a moment if the rest of the
day's business news sean. Australia's medicines regulator has issued a
safety warning over the risk of suicidal thoughts and behavior
(07:16):
linked to drugs known as GLP one receptor agonists, including
a zebic, most commonly yes.
Speaker 2 (07:23):
The Therapeutic Goods Administration also said a link between some
GLP one drugs and reduced effectiveness of oral contraception could
not be ruled out. In a safety alert issued yesterday,
the TGA said it had updated warnings for the high
profile drugs used to treat type two diabetes and obesity.
So zepix one, wi gobi sexend Tulucity Monjaro is another
(07:49):
The alert read I quote. Patients taking these medicines should
tell their health professional if they experienced new or worsening depressions,
suicvital thoughts, or any unusual changes in mood or behavior.
The GLP one drugs have a very short track record,
some medical professionals have been very wary about the unknown
(08:10):
longer term side effects. Now the fact that the TJA
has come out and provided this warning means that they're
certainly taking it seriously.
Speaker 1 (08:18):
Now. I mentioned before the break the ASX and the
situation it had yesterday, an outage yesterday morning that meant
around eighty companies couldn't put out announcements, which frustrated the
heck out of companies and investors alike.
Speaker 2 (08:33):
The incident occurred just before nine am, stopped the release
of the announcements, some of which were time sensitive. It
lasted about three hours. Now shares started trading without any hiccups.
Perhaps the company hit most met cash the grocery wholesaler.
It was forced to place its shares into were trading
halt after being unable to release a presentation detailing its
first half results. It has been a tumultuous few years
(08:57):
at the ASEX Limited, from a filed upgrade of its
settlement systems to are damaging trading settlements outage, the release
of information saying TPG was buying a software development business
business was actually TPG Capital Asia. We have ASSEIC and
the Reserve Bank looking into it yesterday does not help
ax No, but it's.
Speaker 1 (09:16):
Just a little bit more pressure. The you mentioned, Matt Cash. There,
management at met cash might have been unhappy about the outage,
and I suspect they were, but I reckon they'd be
even more unhappy about the reaction to their half year results.
Once shared trading began again, met Cash closed down more
than nine percent yesterday.
Speaker 2 (09:35):
That's right. The grocery wholesale are best known for supplying
Ida stores, posted a small increase in half year revenue.
But but, but, but the big news, Michael, they lost
more than three one hundred and forty million dollars in
tobacco sales. Or tobacco sales were down that much. That's
because the illegal trade in cigarettes is so strong. The
(09:59):
black markets out con troll. It's hit Coals and Woolies,
Viva Energy, which owns Shell branded service stations, and poll Now.
The government's increased to baco excise by more than two
hundred and eighty per cent since twenty thirteen, pushing the
cost of a twenty five pack of cigarettes to about
fifty dollars thirty four of that fifty dollars goes to
the government. So people, I mean, beautiful example of supply
(10:21):
and demand. Right, the supply is there, but demand's not
because they're just too expensive. So the black market is thriving.
Speaker 1 (10:29):
Sean on that. I was speaking to somebody recently, very
respected business person, and they were talking about the fact
that they are still a smoker, and they said that
they have started buying cigarettes black market cigarettes because the
cost difference is so extreme that it's less than half
the price of buying it from an official retailer and
(10:53):
paying all of the official excises and taxes and things.
And I thought, Okay, if this person is someone who
I would never expect to do that kind of thing
is doing it because the margin the difference is so great,
then there is seriously a problem there.
Speaker 2 (11:09):
Yeah. Yeah, yeah, I don't know much about the economics
of it. I don't know where you buy cigarettes from
online and whether they're taxed or you know, whether it's
stolen property or whether it's actually not solen property but
just avoiding tax rates. I know nothing about it, but
clearly when you have you know, kind of reputable people
doing it, there's some issue.
Speaker 1 (11:31):
Yeah, it might be one for fear and greed Q
and A. We could delve into that one in a
little bit more detail. Treasury Wine estates, shorn away from cigarettes,
has bowed to the inevitable, saying it will book a
significant non cash impairment against its US operations, with all
six hundred and eighty seven million dollars of America's good
will likely to be written off.
Speaker 2 (11:53):
Really away from SIKI, is you know, like a red
Winer cigarette together?
Speaker 1 (11:57):
Quite well, Yeah, it'll just picture you in that bar
to chat people up about your thesis.
Speaker 2 (12:02):
That's right.
Speaker 1 (12:04):
On the other hand, here you go, that's right.
Speaker 2 (12:07):
Anyway, back to Treasury Whine, I say, six hundred and
eighty seven million dollars a lot of money that the
rite off includes the high profile nineteen crimes label could
be even bigger. The total once half here accounts of
finalized Treasury under former chief executive Tim Ford, spent billions
of dollars pushing into the US, including buying high end
California producer Dow Vineyards for one point six billion dollars.
(12:28):
He was hoping to turn that brand into another flagship
brand alongside Penfoles. Hasn't worked, Treasury said, The problem isn't
so much the underperformance of its assets in the US,
but more than Americans just aren't spending as much on wine,
and that's what's hurting them. Treasury share price is down
fifty percent this year, including one percent yesterday.
Speaker 1 (12:51):
The biggest M and A deal on the local market
has been dumped, with private equity groups EQT and CBC
Capital Partners walking away from a billion dollar deal to
purchase insurance broker and underwriter AUB Group.
Speaker 2 (13:05):
The two had spent a month doing due diligence, had
offered forty five dollars a share for the stock it
had been trading around thirty two bucks ahead of the bid.
The company, AUB's share price tumbled seventeen percent yesterday to
just under thirty one dollars now. AUB boss Mike Emmett
put on a brave face. He said the due diligence
(13:26):
had strengthened his conviction in his strategy. But your share
helds out there thought they're going to get forty five
bucks hens down to thirty one bucks. I hope they
have as much confidence in his strategy as Mike Emmett does.
Speaker 1 (13:40):
That's a good way to put it. Turning to international
news now Sean severe weather across parts of Asia has
claimed nearly one thousand lives, with Indonesia and Sri Lanka
among the worst affected by heavy rainfall, flooding, and landslides.
Speaker 2 (13:54):
Three top tropical cyclones, coinciding with the northeast monsoon that
typically brings heavy down Paul was too southeast days at
this time of year, have caused widespread destruction in the region.
Peninsula Malaysia and southern Thailand have also received significant above
normal rains in the past week, according to data from
the US Climate Prediction Center. In Indonesia's Sumatra Island, a
(14:16):
week of trenchial rains intensified by a rare cyclone has
left at least four hundred and forty two people dead,
another four hundred and two missing, and officials warned casualty
numbers will likely climb. That's according to Bloomberg, Storm Sena,
which circled the Strait of Mica last week, has now
dissipated over the South China Sea.
Speaker 1 (14:38):
Finally, Sean mentioned this one at the top of the show.
Global consultancy Accenture eight hundred thousand staff have gone from
employees they've had a bit of a facelift. They're not
employees anymore. They're reinventors now sean, and they're part of
what the company calls its reinvention Services business.
Speaker 2 (15:00):
So Accentsia now wants to be clients reinventure part reinvention
partner of choice by helping them to adopt to AI
tools that is the future. According to chief executive Julie Sweet,
she was an inventor of reinventor as it applies to
(15:21):
Accentua back in June, after the group united, it's I've
got to say this strategy consulting creative, technology and operations
units into a single business unit called Reinvention Services OUCH.
The consultancy wants to adopt to the explosion of AI
and wants to advise companies on adopting the technology. According
to a report in the Ft, you may smirk at this, Michael,
(15:42):
I do a little bit. Yeah. You might smirk at
the reinventors at Centure, but others have done similar things.
At Disney, remember employees became imaginee imagineers. Yes, yes, At
Amazon there's a bunch of people that became Ninja coders. Okay,
I'm all for it. I mean, we need to go
wider and deep dive to find some low hanging fruit.
(16:04):
When it comes to core comminencies, we need to move
the needle and during out deliverables and game changes and
we should circle back and make sure our ducks are
in a row.
Speaker 1 (16:12):
Michael, did you see me scrambling for your microphone button
just trying to turn you off? Halfway through that I
could not find it?
Speaker 2 (16:20):
I have. I've worked with people who, honestly, I don't
think they actually knew what they were talking about, but
they figured jug and get there there, and they are
very frustrating.
Speaker 1 (16:31):
It's of smoke screen. Sometimes you can just if you're
throw enough of that stuff out there, you can generally
kind of bluff your way through most conversations. I've done
that with you before, Sean. Up next is Fear and
Greed Q and a Rayatreal from NAB is your guest
today is coming up in the Fear and grad playlist
on your podcast platform or at Fearangreed dot com dot au,
which also where you sign up for that free daily newsletter.
(16:53):
I'll put a link in the show notes as well.
Thank you, Sean, Thank you Michael. It's Tuesday. The two
of December twenty twenty five. Make sure you're following the
podcast and please join us online on LinkedIn, Instagram, x
TikTok and Facebook.
Speaker 2 (17:04):
I'm Mike Thompson.
Speaker 1 (17:05):
That was fair and great. Have a great day.
Welcome to Fear and Greed business news you can use. Today,
the federal government unveils the biggest overhaul of the Defense
Department in fifty years. The Medicines Regulator warns of potential
dire side effects of weight loss drugs, and mett. Cash
says it has lost three hundred and forty million dollars
in cigarette sales because of the illegal tobacco market. Plus
(00:26):
the ASX suffers another embarrassing outage, and consultancy group Accentia
takes corporate jargon to a whole new level. It is Tuesday,
the second of December twenty twenty five. I'm Michael Thompson
and good morning. Sean Aylmer.
Speaker 2 (00:40):
Good morning, Michael.
Speaker 1 (00:41):
Shown the main story this morning, the federal government will
create an independent agency to manage defense projects in what
it described as the biggest overhaul of the department in
fifty years.
Speaker 2 (00:53):
In effect, the Department of Defense will be downsized considerably,
losing about forty percent of its budget, one quarter of
its employees, and responsibility for delivering major defense projects. Three
existing divisions of Defense, once called the Capability, Acquisition and
Sustainment Group. Doesn't that roll off the tongue capability acquis,
the Statement Group, the Guided Weapons and Explosives Ordnance Group,
(01:16):
which is kind of a cool group to be part of,
and the Naval Shipbuilding a sustainment group. They'll all shift
into a newly created Defense Delivery Agency, which will be
operational from July next year, independent from July twenty twenty seven.
There's been a bunch of reviews into defense that have
recommended the creation of an independent project management agency. Yesterday,
(01:40):
Acting Prime Minister Richard Miles, who of course is also
Defense Minister. He's acting because Anthony Abernezi and Jerdy Haydnen
are on their honeymoon. So Richard Miles said the changes
will greatly improve the quality of the defense spend. He
said it's one of the biggest changes to defense ever.
It also will theoretically provide better oversight on the fense budget. Now,
(02:01):
the fence budget is huge, fifty six billion dollars two
percent of GDP that scheduled to rise to about one
hundred billion dollars by twenty thirty four. So a little
bit of an oversight it's probably a very good thing.
Speaker 1 (02:13):
Yeah, you're probably right. It sounds like a lot of money, right,
But Australia's defense budget, when you look at it as
a percentage of GDP, it is relatively small compared to
other countries.
Speaker 2 (02:26):
Yes, even after the boost in spending over the next decade,
it will still be well short of what Donald Trump
reckons regional allies like Australia should spend. He thinks we
should be spending three and a half percent of GDP.
That would mean would have to probably add another two
hundred billion dollars or one hundred billion dollars on top
of a hundred billions we've already got. Trump demanded that
(02:48):
European allies increased spending to five percent of GDP. Now
they haven't done that yet, though Poland is pretty close
to it. But undoubtedly there's a surge in defense related spending.
Now a lot of that in Europe, and potentially here
includes infrastructure. So you might build bridges between islands in Spain,
for example, and that's considered defense spending because it actually
(03:10):
is creating a defensible peninsula, as the case may be.
But certainly a lot of pressure on defense spending and
as a result, you really need much much greater oversight.
And I don't think anyone's going to stand up there
and say hate the department. Department of Defense is the
role model for transparency. It's just not and the government's
(03:32):
trying to improve it.
Speaker 1 (03:34):
So that bridge example, I think was Italy, wasn't it
with the bridge to Sicily and they were going to
call it as.
Speaker 2 (03:40):
A it was literally I said Spain, yes, yeah.
Speaker 1 (03:44):
And that particular one was, hey, this is going to
count towards increasing our GDP, which just sounds an awful
lot like creative accounting.
Speaker 2 (03:51):
Well, it's interesting. I was speaking to an expert about
that and they said, no, no, no, it's actually okay
because if you have a bridge which Sicily becomes much
more defendable, so it actually is defense spending.
Speaker 1 (04:05):
Also feels like it gives you something easy to target.
Target the tridge right anyway, just on the defense topic, though,
Richard Miles yesterday said that Australia is monitoring a naval
flotilla that is traveling through the Philippine Sea with an
unknown destination.
Speaker 2 (04:20):
That's right, the Philippine seas well north of Australia. It's
north of Papua New Guinea in Indonesia. But the government
is keeping a very close watch on the flotilla. In
February this year. Of course, the Chinese fleet circumnavigated Australia
in act not considered friendly by the ALP government, and
it's going to be very close watch on this one.
Speaker 1 (04:41):
Yeah, Okay, turning from defense to the markets, how do
the ASX go? Yesterday?
Speaker 2 (04:47):
There's some PAX two hundred fell a little over half
a percent to eight five hundred and sixty five points.
Health Care stocks led the market lower. C as Hell
and Sigma both off one point four percent. Consumer staples
were also lower. The Big Bank dropped. Bit of rotation
going on at the moment, Michael out of financials into
materials that happened to gain yesterday. That's as a result
(05:07):
the HP Fortescu, Metals Group, Rio Tinto were all higher.
Speaker 1 (05:11):
And plenty more to talk about later with the absolute
debarcle that went on yesterday for the ASX, but we'll
do that in a moment. Bitcoin has fallen back below
eighty six thousand US dollars a unit markets, fearing uncertainty,
particularly in the US economy.
Speaker 2 (05:26):
That's right. Other cryptos fell as well. Ether was down
seven percent, Solano dropped eight percent. Otherwise, in global markets,
US President Donald Trump said he's decided on his pick
for the next Federal Reserve chair, and he expects that
nominee to deliver inter straight cuts. Don't know who that
might be, but we'll wait and see. In currency markets,
(05:48):
the Aussie dollar is trading about that sixty five and
a half US sense.
Speaker 1 (05:52):
And that's the subject of today's Q and A Sean
coming up after the show. You're speaking with Ray Attrell
from NAB.
Speaker 2 (05:59):
That's exactly right, Foreign currencies, the Asie dollar. I did
a thesis on the Aussie dollar when I did my
honors year at university.
Speaker 1 (06:08):
Only finding this out now, well.
Speaker 2 (06:11):
I don't think it was a very good thesis, but
it's kind of interesting. The Adsie doll. It matters so
much because it's the pricing mechanism for everything that goes
in and out of the country. Yet what drives it
is changing, and so you talk to Ray like, we're
always a commodities currency that seems to be changing, and
we talked to Ray about that. It's really really interesting,
particularly when you spend so much for your time doing
(06:33):
a thesis on foreign exchange.
Speaker 1 (06:35):
Yeah, it's probably not. It's probably not the kind of
thing you open conversations with.
Speaker 2 (06:39):
Is it like I did a thesis you like you'd
like to meet you know, at that age in your
early twenties and you're trying to meet people, and so
what's your thesis on the Aussie dollar? Never got me
very far, Never got me very far.
Speaker 1 (06:54):
That's a one way ticket to single town anyway. Quick
freak back in a moment if the rest of the
day's business news sean. Australia's medicines regulator has issued a
safety warning over the risk of suicidal thoughts and behavior
(07:16):
linked to drugs known as GLP one receptor agonists, including
a zebic, most commonly yes.
Speaker 2 (07:23):
The Therapeutic Goods Administration also said a link between some
GLP one drugs and reduced effectiveness of oral contraception could
not be ruled out. In a safety alert issued yesterday,
the TGA said it had updated warnings for the high
profile drugs used to treat type two diabetes and obesity.
So zepix one, wi gobi sexend Tulucity Monjaro is another
(07:49):
The alert read I quote. Patients taking these medicines should
tell their health professional if they experienced new or worsening depressions,
suicvital thoughts, or any unusual changes in mood or behavior.
The GLP one drugs have a very short track record,
some medical professionals have been very wary about the unknown
(08:10):
longer term side effects. Now the fact that the TJA
has come out and provided this warning means that they're
certainly taking it seriously.
Speaker 1 (08:18):
Now. I mentioned before the break the ASX and the
situation it had yesterday, an outage yesterday morning that meant
around eighty companies couldn't put out announcements, which frustrated the
heck out of companies and investors alike.
Speaker 2 (08:33):
The incident occurred just before nine am, stopped the release
of the announcements, some of which were time sensitive. It
lasted about three hours. Now shares started trading without any hiccups.
Perhaps the company hit most met cash the grocery wholesaler.
It was forced to place its shares into were trading
halt after being unable to release a presentation detailing its
first half results. It has been a tumultuous few years
(08:57):
at the ASEX Limited, from a filed upgrade of its
settlement systems to are damaging trading settlements outage, the release
of information saying TPG was buying a software development business
business was actually TPG Capital Asia. We have ASSEIC and
the Reserve Bank looking into it yesterday does not help
ax No, but it's.
Speaker 1 (09:16):
Just a little bit more pressure. The you mentioned, Matt Cash. There,
management at met cash might have been unhappy about the outage,
and I suspect they were, but I reckon they'd be
even more unhappy about the reaction to their half year results.
Once shared trading began again, met Cash closed down more
than nine percent yesterday.
Speaker 2 (09:35):
That's right. The grocery wholesale are best known for supplying
Ida stores, posted a small increase in half year revenue.
But but, but, but the big news, Michael, they lost
more than three one hundred and forty million dollars in
tobacco sales. Or tobacco sales were down that much. That's
because the illegal trade in cigarettes is so strong. The
(09:59):
black markets out con troll. It's hit Coals and Woolies,
Viva Energy, which owns Shell branded service stations, and poll Now.
The government's increased to baco excise by more than two
hundred and eighty per cent since twenty thirteen, pushing the
cost of a twenty five pack of cigarettes to about
fifty dollars thirty four of that fifty dollars goes to
the government. So people, I mean, beautiful example of supply
(10:21):
and demand. Right, the supply is there, but demand's not
because they're just too expensive. So the black market is thriving.
Speaker 1 (10:29):
Sean on that. I was speaking to somebody recently, very
respected business person, and they were talking about the fact
that they are still a smoker, and they said that
they have started buying cigarettes black market cigarettes because the
cost difference is so extreme that it's less than half
the price of buying it from an official retailer and
(10:53):
paying all of the official excises and taxes and things.
And I thought, Okay, if this person is someone who
I would never expect to do that kind of thing
is doing it because the margin the difference is so great,
then there is seriously a problem there.
Speaker 2 (11:09):
Yeah. Yeah, yeah, I don't know much about the economics
of it. I don't know where you buy cigarettes from
online and whether they're taxed or you know, whether it's
stolen property or whether it's actually not solen property but
just avoiding tax rates. I know nothing about it, but
clearly when you have you know, kind of reputable people
doing it, there's some issue.
Speaker 1 (11:31):
Yeah, it might be one for fear and greed Q
and A. We could delve into that one in a
little bit more detail. Treasury Wine estates, shorn away from cigarettes,
has bowed to the inevitable, saying it will book a
significant non cash impairment against its US operations, with all
six hundred and eighty seven million dollars of America's good
will likely to be written off.
Speaker 2 (11:53):
Really away from SIKI, is you know, like a red
Winer cigarette together?
Speaker 1 (11:57):
Quite well, Yeah, it'll just picture you in that bar
to chat people up about your thesis.
Speaker 2 (12:02):
That's right.
Speaker 1 (12:04):
On the other hand, here you go, that's right.
Speaker 2 (12:07):
Anyway, back to Treasury Whine, I say, six hundred and
eighty seven million dollars a lot of money that the
rite off includes the high profile nineteen crimes label could
be even bigger. The total once half here accounts of
finalized Treasury under former chief executive Tim Ford, spent billions
of dollars pushing into the US, including buying high end
California producer Dow Vineyards for one point six billion dollars.
(12:28):
He was hoping to turn that brand into another flagship
brand alongside Penfoles. Hasn't worked, Treasury said, The problem isn't
so much the underperformance of its assets in the US,
but more than Americans just aren't spending as much on wine,
and that's what's hurting them. Treasury share price is down
fifty percent this year, including one percent yesterday.
Speaker 1 (12:51):
The biggest M and A deal on the local market
has been dumped, with private equity groups EQT and CBC
Capital Partners walking away from a billion dollar deal to
purchase insurance broker and underwriter AUB Group.
Speaker 2 (13:05):
The two had spent a month doing due diligence, had
offered forty five dollars a share for the stock it
had been trading around thirty two bucks ahead of the bid.
The company, AUB's share price tumbled seventeen percent yesterday to
just under thirty one dollars now. AUB boss Mike Emmett
put on a brave face. He said the due diligence
(13:26):
had strengthened his conviction in his strategy. But your share
helds out there thought they're going to get forty five
bucks hens down to thirty one bucks. I hope they
have as much confidence in his strategy as Mike Emmett does.
Speaker 1 (13:40):
That's a good way to put it. Turning to international
news now Sean severe weather across parts of Asia has
claimed nearly one thousand lives, with Indonesia and Sri Lanka
among the worst affected by heavy rainfall, flooding, and landslides.
Speaker 2 (13:54):
Three top tropical cyclones, coinciding with the northeast monsoon that
typically brings heavy down Paul was too southeast days at
this time of year, have caused widespread destruction in the region.
Peninsula Malaysia and southern Thailand have also received significant above
normal rains in the past week, according to data from
the US Climate Prediction Center. In Indonesia's Sumatra Island, a
(14:16):
week of trenchial rains intensified by a rare cyclone has
left at least four hundred and forty two people dead,
another four hundred and two missing, and officials warned casualty
numbers will likely climb. That's according to Bloomberg, Storm Sena,
which circled the Strait of Mica last week, has now
dissipated over the South China Sea.
Speaker 1 (14:38):
Finally, Sean mentioned this one at the top of the show.
Global consultancy Accenture eight hundred thousand staff have gone from
employees they've had a bit of a facelift. They're not
employees anymore. They're reinventors now sean, and they're part of
what the company calls its reinvention Services business.
Speaker 2 (15:00):
So Accentsia now wants to be clients reinventure part reinvention
partner of choice by helping them to adopt to AI
tools that is the future. According to chief executive Julie Sweet,
she was an inventor of reinventor as it applies to
(15:21):
Accentua back in June, after the group united, it's I've
got to say this strategy consulting creative, technology and operations
units into a single business unit called Reinvention Services OUCH.
The consultancy wants to adopt to the explosion of AI
and wants to advise companies on adopting the technology. According
to a report in the Ft, you may smirk at this, Michael,
(15:42):
I do a little bit. Yeah. You might smirk at
the reinventors at Centure, but others have done similar things.
At Disney, remember employees became imaginee imagineers. Yes, yes, At
Amazon there's a bunch of people that became Ninja coders. Okay,
I'm all for it. I mean, we need to go
wider and deep dive to find some low hanging fruit.
(16:04):
When it comes to core comminencies, we need to move
the needle and during out deliverables and game changes and
we should circle back and make sure our ducks are
in a row.
Speaker 1 (16:12):
Michael, did you see me scrambling for your microphone button
just trying to turn you off? Halfway through that I
could not find it?
Speaker 2 (16:20):
I have. I've worked with people who, honestly, I don't
think they actually knew what they were talking about, but
they figured jug and get there there, and they are
very frustrating.
Speaker 1 (16:31):
It's of smoke screen. Sometimes you can just if you're
throw enough of that stuff out there, you can generally
kind of bluff your way through most conversations. I've done
that with you before, Sean. Up next is Fear and
Greed Q and a Rayatreal from NAB is your guest
today is coming up in the Fear and grad playlist
on your podcast platform or at Fearangreed dot com dot au,
which also where you sign up for that free daily newsletter.
(16:53):
I'll put a link in the show notes as well.
Thank you, Sean, Thank you Michael. It's Tuesday. The two
of December twenty twenty five. Make sure you're following the
podcast and please join us online on LinkedIn, Instagram, x
TikTok and Facebook.
Speaker 2 (17:04):
I'm Mike Thompson.
Speaker 1 (17:05):
That was fair and great. Have a great day.
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