Economy, taxes, Artificial Intelligence, C&C, DGE, Adnams, RCL & other:

A DAY IN THE LIFE:

I was considering the other day how virtually all energy – whether it be heat or stored in the form of calories – comes ultimately from the sun.

OK so the earth has got a molten core, there’s a bit of heat down there but you can see how plants were the first to get the hang of converting the energy in sunlight into, well, into life.

And they beat me to it because I could sunbathe all day and I’d still get hungry.

And then you have your herbivores. They go the direct route. They munch up the vegetation that in turn soaked up the energy from the sun and did something with it.

And then it gets interesting.

Because, and I know evolution doesn’t ‘think’ as such, some animal (and some plants) decided to eat a dead animal that ate the plant that soaked up the energy from the sun and did something with it.

And then, some animal must have taken it a bit further. They ‘thought’ that waiting for an animal to die was a tad dull so they, the carnivores, decided to speed things up and make dead the animal that ate the plant that soaked up the energy from the sun and did something with it.

Which means, presumably, that I’m another couple of steps down the chain when I next order a burger. On to the news:

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PUBS & RESTAURANTS:

UK economy:

The CBI has reported its belief that the downturn currently besetting the UK’s private sector will ‘persist into 2026’. The CBI says that a weighted balance of 20% (i.e. pessimistic > optimistic) ‘firms across the private sector expect activity to fall in the next three months…extending a run of negative predictions that began in late 2024,…’

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Tax rises:

Based on its interpretation of what defines ‘working people’, Sky News reports that ‘Rachel Reeves is unlikely to raise the basic rates of income tax and national insurance.’ This in order to avoid breaking a promise to protect working people. Sky believes that officials have been ‘tasked with protecting the income of the lower two-thirds of working people, meaning in theory people earning more than around £46,000 could face a squeeze in the budget….’

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AI and the threat to jobs:

The state of the jobs market is often cited as the largest influencer when it comes to people’s propensity to spend. Job losses impact the ability to spend but the fear of job losses impacts the desire to do so of a much larger number of employees / consumers…

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C&C GROUP – H1 ANALYSTS’ MEETING:

Challenges facing the market as a whole ‘have accelerated’. The warm weather was welcome, but it ‘did not lead to volume growth’. Improvement ‘is underway, but will take time to feed through to the bottom line’. The drop in revenue is largely down to exiting the BBG contract but there has been some volume decline (but revenue increase) across the market as a whole. Costs for FY26 are ‘in line with expectations’. Co expects ‘modest inflation’ in FY27.

The market & divisional performance: Customers are cash-constrained. Value is critical. Long-alcoholic-drinks are outperforming wines & spirits. Tennent’s remains Scotland’s no1 beer brand. Bulmer’s performed well, helped by the weather. Magners is improving ‘after some very challenging years’. The premium portfolio ‘continues to grow’. Q. What remains to be done at Magners? It had pushed too much for volume. Lost momentum in on-trade. Co needs 1) consumers to ‘reappraise the brand’ then it should see impact 2) in the off-trade and later 3) in the on-trade. Distribution. Matthew Clark is ‘much-improved’ in terms of service levels. Recovery ‘remains a long-term journey’. Some volume could be shed in order to improve profitability.

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COMPANY NEWS:

Diageo to open Guinness experience centre. The Guinness Open Gate Brewery London will open on 11 December offering experiences including a tasting room, two restaurants and  ‘pour your own pint’ instructions….

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Suffolk-based brewer and pub company Adnams announces that Mr Simon Townsend, Non-Executive Director and Interim Chair of the Company, purchased 1,650 B Ordinary Shares in the Company on 24 October at a price of £18.05 per share. It adds that ‘on 28 October 2025 Mr Andrew Driscoll, Director and Chief Financial Officer of the Company, purchased 500 A Ordinary Shares in the Company at a price of £10.00 per share.

JD Wetherspoon chair Sir Tim Martin has told the MA that franchising could play an important role in the pub group’s long-term growth. He says ‘franchising could be very important, especially if we can copy companies like Starbucks and open up in Japan, China and India.’ JDW will update on Q1 trading on 5 November.

Sky reports that PE house KKR ‘has made a move to acquire Costa Coffee.’ It says KKR is ‘among a small number of parties in talks with The Coca-Cola Company and its advisers at investment bank Lazard about a possible takeover.’ Bain Capital and TDR Capital are also reported to have expressed an interest.

Drinks Business reports that Kirin is exploring a US$1 billion sale of its Four Roses Bourbon brand. It says there has been heightened interest from potential buyers.

HOLIDAYS & LEISURE TRAVEL:

Royal Caribbean Group yesterday reported Q3 numbers saying that it had generated adjusted EPS of $5.75. It says that its ‘results were better than the company’s guidance primarily due to higher than expected close-in demand and lower costs.’ RCL is ‘raising its full year 2025 Adjusted EPS guidance to $15.58 to $15.63, representing 32% year-over-year growth. This increase is mainly driven by the better-than-expected third quarter performance which is more than offsetting the minimal impact in the fourth quarter from recent adverse weather, and the unplanned extension of the temporary closure of one of the company’s exclusive destinations in Labadee, Haiti….’

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OTHER LEISURE:

Grainne Hurst, the chief executive of the Betting and Gaming Council, has told parliament’s Treasury select committee that there is no ‘social ill with gambling’. She went on to warn that taxing bookies more heavily would cost jobs, lead to closures and drive betting underground….

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FINANCE & MARKETS:

Sterling lower at $1.3235 and €1.1380. Oil lower at $64.44. UK 10 year gilt yield unchanged at 4.40%. World markets mostly better yesterday. London set to open around unchanged as at 6.30am.

RETAIL WITH NICK BUBB:

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