WWII Bombs Threaten Renewable Energy Projects

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Jan. 30 (Bloomberg) -- Bloomberg’s Sally Bakewell reports on unexploded ordnances from World War II hampering wind farm projects. She speaks on Bloomberg Television’s “The Pulse.” (Source: Bloomberg)

Markets are validolatile.

The risk is that there is worse to come.

In the crisis we are worried about we could be in the early days of the consumer slowdown in emerging markets.

We had a panic about higher interest rates which puts pressure on consumer expenditure.

This takes 6, 9, or 12 months to feed through.

This could be a worrying sign that we are seeing this already in a businesslike diageo, when we expect the real ramifications of a consumer slowdown to be felt six or nine months down the road.

What they are doing is going for the higher premium.

They are making acquisitions in the u.s. they want to position themselves so that they are higher.

So they are more insulated.

Absolutely.

If you look at their strategy, it is always to sell more premium drinks whether it is in the u.s. or china.

They say they are still a doing that at the very high-end.

In china, because of the specific problems of that market.

They are hit below the really expensive stuff.

That is supportive of their market.

As you said, it is a bit of -- in emerging markets.

The other thing that concerned me a little bit about this is that they talk about fluctuations in currency's affecting what their business is doing.

On a p&o front, currency is an issue.

If people are buying less hall from -- alchoohol that could be a problem.

How much of this is specific to diageo?

Maybe they have not been able to push the brands.

If this industrywide?

If it is, that means it will hit luxury stocks.

I think it is the latter.

I would suspect we are in the early stages of worrying about these consumer focused companies exposed to e.m. these particular geographies -- latin america, nigeria.

But diageo are a class operator.

You look at their margins.

They are dominant.

The valuation -- it is all representative of a class act company, strong and execution.

If they are having problems.

Others are less well-equipped.

Is that what investors are telling it.

Absolutely.

The remmy's are down a little bit on the warnings from china.

This is old news because they had -- they say they are struggling with cognac in china.

Heineken is down in china.

Nigeria is a tough market.

That is a huge market for heineken.

How do you turn around investors concerns?

They announced a cost-cutting program.

Doesn't need to be deeper?

I could not tell you that.

They have been looking at how they buy basic materials.

It's certainly going to be something that people will keep an eye on to support those margins.

Do you think they need to be more aggressive in cost-cutting?

I wonder how much more there is to be done.

Diageo is a well-run company.

There are disappointments at the top line.

It is volume lead.

When you look at the prophet, it is close to what analysts had been expecting -- if you look at the profit line.

The question is, how much better can it be?

M&a. we tried to quiz the ceo.

He mentioned tequila brands.

Is this the way they may stay ahead of rivals?

I think they have a dominant market position.

Yes, there are acquisitions they can do to reinforce markets, but these are incremental.

What this business need -- is the better end market.

That is out of control.

Chinese consumption.

He was saying baileys is very popular amongst ladies and china.

Baileys is doing well in china.

Interestingly, the very high-end stuff, though really, really expensive bottles of 2000 pound bottles of johnny walker are doing well.

Johnny walker black is suffering.

It is the middle of the consumer, you can't buy it.

Luxury stocks.

People are still buying expensive handbags.

It is the squeezed middle.

In luxury, a lot of fashion companies tried to put their prices higher to become more desirable.

Gucci has done it.

Is diageo going to do the same?

It is one lever that it can pull.

The lesson was clear today.

A wine producer.

Shares are down 20%. raising the price impacted demand.

The challenge of china is where they have a high-end business.

Thank you.

And our bloomberg average reporter, clementine fletcher.

Let's get you other company news.

Erickson has reported profits missed estimates as phone operators curb spending.

The chief executive have told directors within the business he has no plans to step down.

He reports he was a candidate for the steve ballmer job.

He'll join tom keene on the surveillance program later in.

-- the biggest gainer on the stoxx 600. it is the biggest gain since

This text has been automatically generated. It may not be 100% accurate.

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