Morning business news - November 8Thursday 08 November 2012 11.33
GLANBIA PLC FACING MAJOR VOTE ON DAIRY PROCESSING ASSETS - The food group Glanbia plc tried to split, or offload its dairy-processing assets to the Glanbia Co-op about two years ago. That move failed, and now shareholders are being asked to vote on a proposal that will give the Co-Op control of bulk dairy processing in Ireland. At the same time, this will create a platform for investment in new capacity needed when milk quotas are abolished in 2015. There are 6,800 co-op shareholders eligible to vote, meaning direct farmer control of Ireland's biggest milk processor is at stake. The vote takes place next Tuesday.
Pat O'Toole, from the Irish Farmers Journal, says the ''no camp'' is spread across the Glanbia region - Leinster, East Munster and into Connacht and Ulster. They had been big supporters of the PLC and currently the Co-Op is a majority shareholder in the PLC. That shareholding would initially go down by 3% and then after a second vote its shareholding would move to a minority one of 40%. He says the business is worth €1.2 billion and some farmers want to stay with the PLC and retain the current structures.
However, farmers who vote ''Yes'' will get control of milk processing. The journalist says the milk price is currently paid by the PLC and there is a belief that it will not be able to support prices in adverse market conditions. But if the Co-Op was involved in dairy processing with the PLC, there would be more flexibility. Most of the farmers' organisations are backing the proposal, including the IFA and ICSMA.
MORNING BRIEFS - World markets turned lower yesterday, after the re-election of US President Barack Obama and after pessimistic comments from European Central Bank president Mario Draghi who said that euro zone unemployment is "deplorably high", that overall economic activity is weak and expected to remain weak. All three major stock indices in the US fell sharply. The the S&P 500 closed down 2.4%, below 1,400 for the first time since August, while the Dow Jones fell 300 points to below 13,000. The losses were led by falls in energy and technology shares, and come as investors focus on the upcoming budget challenges for Washington. European shares were lower too, after the European Commission issued an outlook which said the euro zone economy would barely grow next year. And this morning Asian shares dropped for the first time in three days.
*** In its fifth year of recession for Greece, the parliament there has just narrowly adopted a new round of austerity cuts that are needed for the country to get the next instalment of a crucial international economic bailout. Earlier, a reported 70,000 protesters in Athens and police fought outside the parliament. Passage of the cuts was needed for the payout of the next international bailout instalment of €31.5 billion, which the government needs to stay in operation. Without the funds, it said, it would run out of money by the middle of this month.
*** German imports and exports fell in September, new data shows this morning, underscoring the effect the financial crisis is having on the euro zone's biggest economy. Imports eased 1.6% and exports fell 2.5%, the sharpest drop since December last year.
*** The European Central Bank and the Bank of England will announce their latest decisions on interest rates later today. It is expected the ECB will leave rates unchanged at 0.75% while the Bank of England is also expected not to make any changes.