By Abhiruchi Ranjan
Nestle and Starbucks have united to take the food and beverage sector by storm. In other news, Jet Airways’ cost cutting measures are set to take flight. Here are some business stories you may have missed last week.
Nestle and Starbucks join forces
Swiss food giant Nestle and US coffee maker Starbucks have inked their $7.15 billion licensing deal. The closing of the deal grants Nestle the perpetual rights to sell Starbucks Consumer Packaged Goods and Foodservice products worldwide. This alliance will allow Nestle to strengthen its coffee portfolio significantly across North America and allow for global expansion. The agreement however excludes Ready-to-Drink products and all sales of any products within Starbucks coffee shops. Moreover, around 500 Starbucks employees are expected to move to Nestle, majority in Seattle and London.
Jet Airways gears up for cost cutting
As debt worth Rs 86 billion weighs down on Jet Airways, there might be light at the end of the tunnel for the airline carrier. The distressed firm has received $300 million as liquidity support in the form of advance lease incentives and borrowings from domestic banks. The Naresh Goyal led business is in serious troubleshooting mode and have come up with a plan to reduce costs by almost Rs 20 billion by 2020. With capital infusion and debt reduction being the need of the hour, the firm intends to curtail its expenses by improving inventory management, pricing policy and cashing in on the JetPrivilege loyalty programme that has over 8.5 million customers enrolled.
Criminal charges a possible consequence for social media giant executives
Indian heads of global internet and social media firms might soon face the heat of the government if they fail to curb the problem of objectionable content and fake news circulating through their platforms. Criminal charges may be pressed if top executives of such platforms don’t put an end to the rumour mongering. Home Secretary Rajiv Gauba-headed committee submitted its recommendations to the Group of Ministers (GoM) that is headed by Rajnath Singh. This comes at a time where lynching and mob violence incidents were rife in various parts of the country. The government is actively trying to resolve the issue of these heinous acts as over 35 deaths were a corollary. Moreover, the apex court has asked the Parliament to put a new law into effect to combat the lynching incidents.
Indian Post Payments Bank launched
The much awaited Indian Post Payments Bank (IPPB) was launched on September 1, 2018. While customers will be provided with savings and current account facilities, other services like bills and utility payments, remittance and money transfer and merchant payments can also be availed. Almost 0.4 million zero balance savings accounts have been opened so far with a 4% interest rate being offered on deposits. Postmen will be bringing the banking experience to one’s doorstep and have been trained to use the biometric devices and mobile phones. As of September 2017, the IPPB had missed its 18 month deadline by failing to open 650 branches nationwide as a system integrator couldn’t be brought on board, which it would now meet.
Flipkart to not be exempted from capital gains tax
Singapore registered Flipkart Ltd has approached the income tax (I-T) department seeking exemption from the capital gains tax after selling most of its shares to US retail giant Walmart in their $16 billion deal. Tax officials are also looking into wary transactions and investment flows of the e-retailer. A mismatch between previous losses and current year losses is also a bone of contention for tax regulators. Officials have conveyed to Flipkart that there is no way they can get away with not paying the capital gains tax after the General Anti Avoidance Rule (GAAR) has come into effect.
Abhiruchi Ranjan is a writing analyst at Qrius