Connect with us

Published

on

Suppliers of branded goods including baked beans and pet food have “pushed up prices by more than their costs”, according to the competition watchdog.

The Competition and Markets Authority (CMA) has been examining 10 product categories in a bid to see if shoppers, already struggling amid the continuing cost of living crisis, are being ripped off.

It said that while some increases were justified, to cover rising costs from elements such as energy and ingredients, there was clearly some profiteering.

“The evidence collected by the CMA indicates that, over the last two years, around three-quarters of branded suppliers in products such as infant formula, baked beans, mayonnaise, and pet food – have increased their unit profitability and, in doing so, have contributed to higher food price inflation“, the statement said.

It went to explain, however, that the shifts were likely to have backfired somewhat as shoppers had clearly switched to cheaper, supermarket own brand, alternatives in a bid to save cash.

The regulator will hope that the competition will help prices of branded goods come down.

But brands told the inquiry that when their costs started to fall they would offer promotions to customers, rather than cut the standard costs of their products.

More from Business

The CMA said that more study was needed, including in the baby formula sphere that has been the subject of work by Sky News and seen the World Health Organisation declare that families were being “exploited”.

Please use Chrome browser for a more accessible video player

‘This cannot carry on’

However, it did find evidence of unjustified price increases and cited concern that two companies control 85% of the market.

The CMA also declared that it was going to review supermarket loyalty schemes in the next phase of its investigation.

Front and centre of that is the offering of promotions only to customers who sign up to their loyalty cards.

The regulator issued its update after previously finding that higher prices in stores were not the result of weak competition between supermarket chains.

The watchdog did, however, demand tighter rules over so-called unit pricing – costs per item covering versions of the same product – to bolster price transparency.

It also previously found that supermarket fuel operators had charged motorists an extra £900m in 2022 by raising their margins on both petrol and diesel sales.

Continue Reading

Business

AA owners line up banks to steer path towards £4.5bn exit

Published

on

By

AA owners line up banks to steer path towards £4.5bn exit

The owners of the AA, Britain’s biggest breakdown recovery service, are lining up bankers to steer a path towards a sale or stock market listing next year which could value the company at well over £4bn.

Sky News has learnt that JP Morgan and Rothschild are in pole position to be appointed to conduct a review of the AA’s strategic options following a recovery in its financial and operating performance.

The AA, which has more than 16 million customers, including 3.3 million individual members, is jointly owned by three private equity firms: Towerbrook Capital Partners, Warburg Pincus and Stonepeak.

Insiders said this weekend that any form of corporate transaction involving the AA was not imminent or likely to take place for at least 12 months.

They added that there was no fixed timetable and that a deal might not take place until after 2026.

Nevertheless, the impending appointment of advisers underlines the renewed confidence its shareholders now have in its prospects, with the business having recorded four consecutive years of customer, revenue and earnings growth.

A strategic review of the AA’s options is likely to encompass an outright sale, listing on the public markets or the disposal of a further minority stake.

More from Money

Stonepeak invested £450m into the company in a combination of common and preferred equity, in a transaction which completed in July last year.

That deal was undertaken at an enterprise valuation – comprising the AA’s equity and debt – of approximately £4bn, the shareholders said at the time.

Given the company’s growth and the valuation at which Stonepeak invested, any future transaction would be unlikely to take place with a price of less than £4.5bn, according to bankers.

The AA, which has a large insurance division as well as its roadside recovery operations, remains weighed down by a substantial – albeit declining – debt burden.

Its most recent set of financial results disclosed that it had £1.9bn of net debt, which it is gradually paying down as profitability improves.

AA owners over the years

The company has been through a succession of owners during the last 25 years.

In 1999, it was bought by Centrica, the owner of British Gas, for £1.1bn.

It was then sold five years later to CVC Capital Partners and Permira, two buyout firms, for £1.75bn, and sat under the corporate umbrella Acromas alongside Saga for a decade.

The AA listed on the London Stock Exchange in 2014, but its shares endured a miserable run, being taken private nearly seven years later at little more than 15% of its value on flotation.

Under the ownership of Towerbrook and Warburg Pincus, the company embarked on a long-term transformation plan, recruiting a new leadership team in the form of chairman Rick Haythornthwaite – who also chairs NatWest Group – and chief executive Jakob Pfaudler.

For many years, the AA styled itself as “Britain’s fourth emergency service”, competing with fierce rival the RAC for market share in the breakdown recovery sector.

Founded in 1905 by a quartet of driving enthusiasts, the AA passed 100,000 members in 1934, before reaching the one million mark in 1950.

Last year, it attended 3.5 million breakdowns on Britain’s roads, with 2,700 patrols wearing its uniform.

The company also operates the largest driving school business in the UK under the AA and BSM brands.

In the past, it has explored a sale of its insurance arm, which also has millions of customers, at various points but is not actively doing so now.

By recruiting a third major shareholder last, the AA mirrored a deal struck in 2021 by the RAC.

The RAC’s then owners – CVC Capital Partners and the Singaporean state fund GIC – brought the technology-focused private equity firm, Silver Lake, in as another major investor.

A spokesman for the AA declined to comment on Saturday.

Continue Reading

Business

US-EU trade war fears reignite as Europe strikes back at Trump’s threat

Published

on

By

US-EU trade war fears reignite as Europe strikes back at Trump's threat

Fears of a US-EU trade war have been reignited after Europe refused to back down in the face of fresh threats from Donald Trump.

The word tariff has dominated much of the US president’s second term, and he has repeatedly and freely threatened countries with them.

Money blog: Trump sends message to UK on energy bills

This included the so-called “liberation day” last month, where he unleashed tariffs on many of his trade partners.

On Friday, after a period of relative calm which has included striking a deal with the UK, he threatened to impose a 50% tariff on the EU after claiming trade talks with Brussels were “going nowhere”.

The US president has repeatedly taken issue with the EU, going as far as to claim it was created to rip the US off.

However, in the face of the latest hostile rhetoric from Mr Trump’s social media account, the European Commission – which oversees trade for the 27-country bloc – has refused to back down.

EU trade chief Maros Sefcovic said: “EU-US trade is unmatched and must be guided by mutual respect, not threats.

“We stand ready to defend our interests.”

President Donald Trump speaks to reporters after signing executive orders regarding nuclear energy in the Oval Office of the White House, Friday, May 23, 2025, in Washington, as Commerce Secretary Howard Lutnick and Defense Secretary Pete Hegseth listen. (AP Photo/Evan Vucci)
Image:
Donald Trump speaks to reporters in the Oval Office on Friday

Fellow EU leaders and ministers have also held the line after Mr Trump’s comments.

Polish deputy economy minister Michal Baranowski said the tariffs appeared to be a negotiating ploy, with Dutch deputy prime minister Dick Schoof said tariffs “can go up and down”.

French trade minister Laurent Saint-Martin said the latest threats did nothing to help trade talks.

He stressed “de-escalation” was one of the EU’s main aims but warned: “We are ready to respond.”

Mr Sefcovic spoke with US trade representative Jamieson Greer and commerce secretary Howard Lutnick after Mr Trump’s comments.

Mr Trump has previously backed down on a tit-for-tat trade war with China, which saw tariffs soar above 100%.

Read more:
Trump accepts $400m plane from Qatar
Judge blocks Trump’s Harvard foreign student ban

Please use Chrome browser for a more accessible video player

US and China end trade war

Sticking points

Talks between the US and EU have stumbled.

In the past week, Washington sent a list of demands to Brussels – including adopting US food safety standards and removing national digital services taxes, people familiar with the talks told Reuters news agency.

In response, the EU reportedly offered a mutually beneficial deal that could include the bloc potentially buying more liquefied natural gas and soybeans from the US, as well as cooperation on issues such as steel overcapacity, which both sides blame on China.

Stocks tumble as Trump grumbles

Major stock indices tumbled after Mr Trump’s comments, which came as he also threatened to slap US tech giant Apple with a 25% tariff.

The president is adamant that he wants the company’s iPhones to be built in America.

The vast majority of its phones are made in China, and the company has also shifted some production to India.

Shares of Apple ended 3% lower and the dollar sank 1% versus the Japanese yen and the euro rose 0.8% against the dollar.

Continue Reading

Business

British taxpayers’ £10.2bn loss on bailout of RBS

Published

on

By

British taxpayers' £10.2bn loss on bailout of RBS

British taxpayers are set to swallow a loss of just over £10bn on the 2008 rescue of Royal Bank of Scotland (RBS) as the government prepares to confirm that it has offloaded its last-remaining shares in the lender as soon as next week.

Sky News can reveal the ultimate cost to the UK of saving RBS – now NatWest Group – from insolvency is expected to come in at about £10.2bn once the proceeds of share sales, dividends and fees associated with the stake are aggregated.

The final bill will draw a line under one of the most notorious bank bailouts ever orchestrated, and comes nearly 17 years after the then chancellor, Lord Darling, conducted what RBS’s boss at the time, Fred Goodwin, labelled “a drive-by shooting”.

Money latest: Brits urged to leave energy price cap

Insiders believe a statement confirming the final shares have been sold could come in the latter part of next week, although there is a chance that timetable could be extended by a number of days.

The chancellor, Rachel Reeves, is likely to make a statement about the milestone, although insiders say the Treasury and the bank are keen to simply mark the occasion by thanking British taxpayers for their protracted support.

A stock exchange filing disclosing that taxpayers’ stake had fallen below 1% was made last week, down from over 80% in the years after the £45.5bn bailout.

More from Money

The stake now stands at 0.26%, meaning the final shares could be offloaded as early as the middle of next week, depending upon demand.

Total proceeds from a government trading plan launched in 2021 to drip-feed NatWest stock into the market have so far reached £12.8bn.

Based on the bank’s current share price, the remaining shares should fetch in the region of £400m, taking the figure to £13.2bn.

In addition, institutional share sales and direct buybacks by NatWest of government-held stock have yielded a further £11.5bn.

Dividend payments to the Treasury during its ownership have totalled £4.9bn, while fees and other payments have generated another £5.6bn.

In aggregate, that means total proceeds from NatWest since 2008 are expected to hit £35.3bn.

Under Rick Haythornthwaite and Paul Thwaite, now the bank’s chairman and chief executive respectively, NatWest is now focused on driving growth across its business.

It recently tabled an £11bn bid to buy Santander UK, according to the Financial Times, although no talks are ongoing.

Mr Thwaite replaced Dame Alison Rose, who left amid the crisis sparked by the debanking scandal involving Nigel Farage, the Reform UK leader.

Sky News recently revealed that the bank and Mr Farage had reached an undisclosed settlement.

During the first five years of NatWest’s period in majority state ownership, the bank was run by Sir Stephen Hester, now the chairman of easyJet.

Sir Stephen stepped down amid tensions with the then chancellor, George Osborne, about how RBS – as it then was – should be run.

Read more from Sky News:
Energy price cap to fall by 7%
Telegraph £500m sale agreed ‘in principle’

Lloyds Banking Group was also in partial state ownership for years, although taxpayers reaped a net gain of about £900m from that period.

Other lenders nationalised during the crisis included Bradford & Bingley, the bulk of which was sold to Santander UK, and Northern Rock, part of which was sold to Virgin Money – which in turn has been acquired by Nationwide.

NatWest declined to comment on Friday.

A Treasury spokesperson said: “We now own less than 1% of shares in NatWest which is a significant step towards returning the bank to private ownership and delivering value for money for taxpayers.

“We are on track to exit the shareholding soon, subject to sales achieving value for money and market conditions.”

Continue Reading

Trending