Competitive horizon

Citation

(2009), "Competitive horizon", Strategic Direction, Vol. 25 No. 4. https://doi.org/10.1108/sd.2009.05625dab.002

Competitive horizon

Article Type: Competitive horizon From: Strategic Direction, Volume 25, Issue 4

Legislation threat to EU agriculture

A report published by Food Navigator (www.foodnavigator.com) warns of significant upheaval for the agriculture sector in Europe if new legislation comes into force. The legislation will see amendments to existing pest management control, leaving producers with fewer options than at present. According to the European Center for Agricultural, Regional and Environmental Policy Research (EuroCare), the effect will be lower crop yields and substantial price increases by 2013. The organization predicts a minimum rise of around 20 percent for core products like wheat and potatoes, while the respective price of cereals and vegetables could soar by 73 and 104 percent. The legislation could also see the European Union (EU) make the transition to become mainly an importer of crops instead of the key exporter it is now. EuroCare believes that another potential consequence would see countries such as the United States, Mexico, Ukraine, Russia, and Belarus replacing the EU as key wheat producers.

African nations set for natural energy boost

The success of preliminary investigations in Kenya has raised hopes that 2009 will see Africa progress with plans to commence geothermal energy production. The new African Rift Geothermal Development Facility (ARGeo) will front the project, with support from the UN Environment Program (UNEP), the Global Environment Facility (GEF) and the World Bank. Geothermal energy generation utilizes steam locked under rocks in East Africa and is seen as an environmentally-friendly and cost-effective way of serving the two billion people currently without access to a reliable energy source. The GEF funded exploratory study has identified potential new drilling sites in Kenya that should allow ARGeo to expand its geothermal projects. It is also expected that Ethiopia, Tanzania, Eritrea and Uganda will participate. Away from Africa, involvement from Iceland and Germany is likely.

Making the right cuts

Managing expenditure more effectively is a natural response during difficult economic times. But an article published by the Online Business Advisor (www.onlinebusadv.com) claims that many companies are prone to react hastily and make cuts that can prove damaging rather than advantageous. Firms will often target advertising and promotion in the belief that slashing the budget in these areas can bring swift rewards in the shape of significant financial savings. However, the report argues that such logic can be unsound because the future growth and success of an organization may depend on promotional and advertising efforts. Companies should therefore measure these activities to ascertain which are most effective and therefore crucial to organization performance. And instead of targeting the wrong areas, leaders will be then able to identify where expenditure is less warranted and prioritize such categories for cost cutting measures.

China launches measures to improve food safety

In the aftermath of the contaminated milk scandal, several government departments in China have pledged to crack down on the inclusion of illegal additives in the country’s food production. Nine departments including the Health Ministry and the State Food and Drug Administration have joined forces in an attempt to restore confidence in China’s food manufacturing industry. Following an extensive investigation conducted nationwide, notice has been given that the inclusion of 17 nonfood substances in food production will no longer be permitted. Industrial dye used to color egg yolks but linked to cancer is among the substances now banned. Manufacturers will likewise no longer be permitted to use melamine, a chemical used in the plastics industry but previously found in baby milk. A report published by the China Daily (www.chinadaily.com) points out that the government has also prohibited carbon monoxide, opium poppy capsules and industrial methanol. In addition, the use of many common additives will also be subject to stricter regulation. Meat product colorant nitrite and the artificial sweetener sodium cyclamate are included on this list. According to the report, processed meat, dairy products and sauces are among the food groups targeted and suspicious products will be removed from retail stores and taken for testing. Seventy per cent of China’s 600,000 food manufacturers are small concerns and the initiative will focus mainly on these companies as few have adequate monitoring systems in place.