ALCOHOLIC DRINKS

AMERICAS: Enduring popularity of cocktails drives growth in super-premium spirits

Figures released by the Distilled Spirits Council of the United States show that imports of whiskey and vodka rose year-on-year to June 2006 by 22.4% and 14.9% respectively by value whereas imports of rum declined by 0.7% and brandy and gin imports were virtually static showing increases of 1.1% and 1.8%.

Figures for exports are equally varied with whiskey up 21.7%, rum up 120.6%, brandy up 27.7%, vodka up 78.6% and gin down 13.1%.

The enduring popularity of the cocktail drove the 23% growth in sales of super-premium spirits in 2005.

INSURANCE

ASIA: Rise in middle-class prosperity drives growth in the Chinese insurance market

Growth in the Chinese insurance market will be driven by the growth in the middle-class - those who are sufficiently prosperous to take a long-term view of their own financial security.

Although the insurance industry is by definition about risk, this inherent risk is exacerbated when entering developing markets with huge potential such as China. Specific issues are the difficulty in recruiting experienced local staff, the sheer size of the country which creates problems in providing national coverage, the regulatory and corporate governance environment and low interest rates leading to paltry returns on fixed-income investments

MEDIA

EUROPE: Changing trends in communications consumption and the potential impact of convergence emerge in Ofcom's Communications Market report.

On 10 August 2006 the Office of Communications (Ofcom), the UK's communications industry regulator, published their third annual Communications Market report.

Total retail revenue in the UK communications sector in 2005 increased 5% to £50bn whilst average household spend on communications rose by less than 1% to £87.67 per month; mobile communications was the largest component, representing 35% of total spend. The proportion of household expenditure spent on communications service fell for the first time in 5 years from 4.63% in 2004 to 4.60% in 2005 due in the most part to falling pric

Media coverage of the report has focused on the evidence relating to the divergent consumption patterns of the key 16-24 year age group who spend on average 21 minutes more time online per week, send 42 more SMS text messages, but spend over seven hours less time watching television than the average for the population as a whole. The Simultaneous Media Usage Survey (SIMM), conducted by BIGresearch in October 2003 for the American Press Institute noted similar trends in the US when they observed that for "simultaneous online users, TV viewing is down 8.8% among 18 to 24 year-olds and down 12.2% among 25 to 34 year-olds in favor of video games."

The emergence of converged services has continued into 2006 with the bundling of fixed-line and broadband offerings predominant alongside internet television, television to mobile and internet telephony.

INSURANCE

AMERICAS: Market liberalisation drives Latin American premium growth

Total insurance premium income is growing at a faster rate than the economy as a whole in Latin America. One of the reasons suggested for this dynamism is market liberalisation and consequent growth in competition from subsidiaries of overseas companies. For example the market share by premium of foreign controlled insurance companies in Mexico grew from 0% to over 50% between 1993 and early 2005.

AIRLINE INDUSTRY

ASIA: Asia Pacific demand set to dominate aircraft market

Boeing have predicted that whilst global GDP growth will average 3.9% over the next 20 years, demand for air passenger and freight traffic will rise by 4.9% and 6.1% respectively. Passenger traffic within the Asia-Pacific region (excluding the domestic market in China) is estimated to rise by 5.4% and the figure for China itself is 8.8%. The region is forecast to represent 36% of the implied demand for 27,200 new passenger aircraft by the year 2025.

FOOD & DRINKS

EUROPE: Traditional eating habits aid the French in war against obesity

French eating habits, which have changed far less than is the case in the UK or USA, are still very closely linked to their national heritage of eating good food for pleasure. About 75% still eat meals prepared at home, virtually the same percentage of families eat their meals together around the table. Portion sizes are smaller and snacking is far less prevalent. The resultant balanced diet may help explain why obesity is less of a problem than in the Anglo-Saxon nations.

The French and Germans are also consuming less alcohol whereas the figure for the UK continues to rise.

COSMETICS & TOILETRIES

AMERICAS: US COSMETICS FOR BABY BOOMERS?

The baby-boomers, those born between 1946 and 1964 (although definitions vary), are an economically powerful force in the US. The nearly 80 million Americans in this demographic are forecast to spend $3 trillion in 2007. Their impact can be demonstrated by the fact that the market for anti-aging skin-care products, which on average cost 2.5 times more than other premier brands, is growing at 33% per annum in comparison with 4% growth in the market for regular skin-care products. Revlon have created a distinct new brand to cater to this market. This growth is being sustained by celebrity endorsement - L'Oreal has recently hired Jane Fonda and Diane Keaton, both in their 60s, to advertise their products in this sector.

MEDIA

EUROPE: UK MEDIA TARGETING LOCAL MARKETS

In a speech to the UK Newspaper Society's Home Truths conference Sir Martin Sorrell, CEO of WPP, highlighted the importance of local media to individual decision making. He stated that most decisions that individuals make that are relevant to their lives are made within a radius of 15 to 30 miles of the home. He argued that ITV's acquisition of Friends Reunited and the creation of Local Google were examples of the recognition by national and international media companies of the importance of the need of advertisers to target consumers at the local level. In a speech to the same conference Tim Bowdler, CEO of Johnston Press, argued that the growing diversity of media delivery channels increases the difficulty for advertisers in targeting specific groups at a national level. He stated that the local media sector had enhanced their reach by investing in digital outlets. Over 600 websites, the vast majority associated with print media, had been developed to enhance the ability of advertisers to target specific communities.

TELECOMS

GLOBAL ICT: Developing markets encouraged to work with Private Sector

It took 113 years from the invention of the telephone for it to achieve 10% global penetration, the comparative figure for mobile telephony is 15 years whilst internet usage achieved the 10% figure only 12 years after the invention of the WWW. These bald figures can disguise great disparity across the digital divide even within continents. The World Bank has noted that worldwide internet use quadrupled between 2000 and 2005. But while developed nations have more than 300 secure internet servers per one million people, developing nations have fewer than two. Canada has more secure servers than all the developing countries combined.

The Bank urges developing countries to work in partnership with the private sector to extend the reach and use of ICT there is also a need to break down existing monopolies in developing countries.

AUTOMOTIVE

ASIA: Politics and New Designs alter the face of the Asia Pacific Automotive markets.

The long term impact of the arrest and indictment of Hyundai Chairman Chung Mong Koo is yet to be determined. He has been accused of creating slush funds to pay politicians and officials for business favours. The groundbreaking for two new overseas plants subsidiary Kia's in the US and Hyundai' in the Czech Republic have already been postponed. However, work on the joint venture engine factory in China, Beijing Hyundai, started as scheduled on May 16.

Mahindra & Mahindra, a leading Indian vehicle manufacturer, reported a 23% rise in net sales to Rs83.26bn for the year ended 31 March 2006. The company will launch the Logan, in association with Renault, in the first half of 2007.

Honda have announced that they are developing an entirely new compact car to be targeted primarily at the Indian market. Tata, General Motors, Fiat and Toyota are also developing new models for this sector which accounts for 75% of the Indian market.

The Chinese government, concerned about over capacity in the automotive industry, is reported to now require companies to prove that consumer demand justifies additional investment before giving approval