US Business

One of the world’s biggest technology get-togethers kicks off in the Portuguese capital on Tuesday, with organisers saying a key aim is to ask tough questions about cryptocurrencies.

Around 100,000 people are expected to gather in Lisbon for the four-day Web Summit and related events, the first full-scale edition since 2019 following the disruption of the pandemic.

The conference attempts to bring together start-ups, investors, business leaders and agenda-broadening speakers –- linguist Noam Chomsky and heavyweight boxing champion Oleksandr Usyk are among this year’s lineup.

Several of the prime slots, though, are taken by cryptocurrency specialists led by Changpeng Zhao, boss of crypto exchange Binance.

And plenty of companies present — from start-ups to billion-dollar behemoths Yuga Labs and OpenSea — are promoting the technology that fans claim will be the future of the web, gaming and ultimately the entire financial system.

But crypto has so far been derided as a tool to generate investment bubbles, hide illicit wealth and enable scams.

Conference organiser Paddy Cosgrave told AFP there were “a lot of questions to be answered” about crypto, describing it as “largely smoke and mirrors”.

“We’ve done our best to persuade many of the leading lights in the space to come, and some of them will get a bit of a kicking on stage, we’ll see how that goes,” he added.

Crypto sceptics including actor Ben McKenzie (Gotham, The O.C.) have also been given slots.

Organisers said the event’s 70,000 tickets had sold out, with Cosgrave reckoning some 30,000 more people would be in Lisbon for side events.

– Whistleblower focus –

Zhao’s company is the dominant player in the crypto sector, but it has been repeatedly accused of trying to dodge regulatory scrutiny — claims the company has denied.

And it became embroiled in one of the biggest stories of the week, with a $500-million investment to back Elon Musk’s takeover of Twitter.

But the wider crypto sector is struggling with plunging values and flatlining interest from the public.

And the tech industry as a whole is also struggling with supply chain problems, trade disputes between the US and China, and economic volatility that has sent investors fleeing.

Cosgrave, though, played down any suggestion that conferences like his had a role in helping to stimulate investment or turn around the fortunes of the sector.

“It’s not really about the establishment or the dominant companies of today,” he said.

“It’s a gathering of companies that in the future may play some significant role.”

As usual, though, the Web Summit will host plenty of figures from the dominant companies — Amazon, Apple, Google and Meta will all be there.

But on a lower level than last year, when the conference played host to Facebook’s Nick Clegg and to whistleblower Frances Haugen, who accused their company of stoking hatred in return for clicks.

Cosgrave highlighted the event’s history of giving a platform to whistleblowers — this year Mark MacGann, who revealed details of Uber’s aggressive lobbying, will be giving a talk.

The organisers say more than 1,000 speakers will take part, giving talks on subjects from cybersecurity to artificial intelligence.

Britain’s foreign minister has insisted during a visit to India that “a lot of progress” has been made in talks on a post-Brexit free-trade deal despite negotiators missing a recent deadline.

“We have made a lot of progress in the negotiations, and we continue to work for an agreement that works for both countries,” James Cleverly said in a Times of India interview published Sunday.

“We have been very, very explicit that our partnership with India is one that matters to us and one we want to enhance and develop,” he was quoted as telling the paper during the two-day visit.

India and its former colonial ruler have been negotiating for around 18 months on a trade deal that would be an important milestone for Britain as it seeks alternative markets following its exit from the European Union.

In exchange for lowering tariffs on British imports like whisky, India wants more work and study visas for its nationals in line with similar recent deals struck between Britain and Australia and New Zealand.

But a target date for a deal of the Indian religious festival of Diwali, which began on October 24, was missed with reports saying the talks had snagged over fears among Britain’s ruling Conservatives of more immigration.

The Indian government was also irked by comments from Suella Braverman, Britain’s recently reinstated right-wing interior minister, that Indians were the largest group of people who overstayed British visas.

However, Cleverly told the Times that he saw it “as a very positive thing that so many Indians want to come and study in the UK, that Indian businessmen want to do business in the UK. It’s a cause for celebration.”

But he added: “Of course, it does mean that we must ensure our processes are right.”

Cleverly refused to be drawn on expectations that the appointment of Rishi Sunak, who is of Indian heritage, as prime minister could help boost ties.

“That said, it’s lovely to see how much excitement and enthusiasm there is about the British PM here in India,” he told the paper.

One of the world’s biggest technology get-togethers kicks off in the Portuguese capital on Tuesday, with organisers saying a key aim is to ask tough questions about cryptocurrencies.

More than 100,000 people are expected to gather in Lisbon for the four-day Web Summit, the first full-scale edition since 2019 following the disruption of the pandemic.

The conference attempts to bring together start-ups, investors, business leaders and agenda-broadening speakers –- linguist Noam Chomsky and heavyweight boxing champion Oleksandr Usyk are among this year’s intake.

Several of the prime slots, though, are taken by cryptocurrency specialists led by Changpeng Zhao, boss of crypto exchange Binance.

And plenty of companies present — from start-ups to billion-dollar behemoths Yuga Labs and OpenSea — are promoting the technology that fans claim will be the future of the web, gaming and ultimately the entire financial system.

But crypto has so far been used largely as a tool to generate investment bubbles, hide illicit wealth and enable scams.

Conference organiser Paddy Cosgrave told AFP there were “a lot of questions to be answered” about crypto, describing it as “largely smoke and mirrors”.

“We’ve done our best to persuade many of the leading lights in the space to come, and some of them will get a bit of a kicking on stage, we’ll see how that goes,” he added.

Crypto sceptics including actor Ben McKenzie (Gotham, The O.C.) have also been given slots.

– Whistleblower focus –

Zhao’s company is the dominant player in the crypto sector, but it has been repeatedly accused of trying to dodge regulatory scrutiny — claims the company has denied.

And it became embroiled in one of the biggest stories of the week, with a $500-million investment to back Elon Musk’s takeover of Twitter.

But the wider crypto sector is struggling with plunging values and flatlining interest from the public.

And the tech industry as a whole is also struggling with supply chain problems, trade disputes between the US and China, and economic volatility that has sent investors fleeing.

Cosgrave, though, played down any suggestion that conferences like his had a role in helping to stimulate investment or turn around the fortunes of the sector.

“It’s not really about the establishment or the dominant companies of today,” he said.

“It’s a gathering of companies that in the future may play some significant role.”

As usual, though, the Web Summit will host plenty of figures from the dominant companies — officials from Amazon, Apple, Google and Meta will all be there.

But on a lower level than last year, when the conference played host to Facebook’s Nick Clegg and to whistleblower Frances Haughen, who accused his company of stoking hatred in return for clicks.

Cosgrave highlighted the event’s history of giving a platform to whistleblowers — this year Mark MacGann, who revealed details of Uber’s aggressive lobbying, will be giving a talk.

The organisers say more than 1,000 speakers will take part, giving talks on subjects from cybersecurity to artificial intelligence.

A Scottish farmer is giving away his entire crop of blueberries, worth £2 million, to charity, saying cheap imports and high labour costs have made harvesting the fruit economically unviable.

Peter Thomson has been growing blueberries at his farm in Blairgowrie, northeast Scotland, for more than four decades, producing 300 tonnes of fruit per year.

But now, he said, growers in Peru and South Africa can sell their berries in the UK at a far lower price, while a shortage of pickers caused by Brexit has made the harvest unviable.

“They’ve started planting huge areas of blueberries in the subtropics like Peru and South Africa,” said Thomson, who started growing blueberries in 1976.

“Their costs of production are so low that we can’t compete.”

Normally, said Thomson, 200 workers would have picked around 300 tonnes of blueberries this year with 50 more working in the packhouse.

In 2014, the price paid to Scottish farmers for blueberries was £17.50 per kilo, he said. Today however, supermarkets pay less than £7.

Labour costs meanwhile have risen from £7 an hour five years ago to £10.10 today, even before state pension contributions and holiday pay are taken into account.

This meant that the value of crop of berries, which would once have been worth £3 million or more, fell to £2 million this year.

Retailers are unwilling to pay a premium for Scottish produce as shoppers target bargains during the cost-of-living squeeze, Thomson said.

– The Brexit factor –

The cheaper imports started last year after countries including Peru and South Africa, where pickers are paid substantially less, started using a new cultivar of the blueberry plant. 

The sweet juicy berries grow densely on bushes with scarlet leaves that are planted in rows.

Blueberries usually require a frost before they flower, which meant farmers in Scotland had the market to themselves in September and October and could command a higher price.

The new cultivar, however, does not need a frost to thrive.

The new blueberry variety is also popular with supermarkets as the fruit are larger and firmer and can be shipped — rather than airfreighted — to UK supermarkets over a number of weeks without spoiling.

Another economic impact has come from Brexit, which has pushed up the price of labour and made it difficult to find skilled pickers.

Before Brexit, said Thomson, the farm’s village of caravans was filled with skilled European pickers, who were experienced and harvested the berries at a faster pace. 

Today the caravans stand empty.

“Brexit has had the consequence of making our labour more expensive,” Thomson said.

“We have to get labour now from places like Turkmenistan and Kyrgyzstan, Nepal, and it comes from so far that it is expensive.”

– ‘It is devastating’ –

Thomson said he had invited the public to fill up buckets of blueberries in exchange for a donation to a cancer charity. A portion of the berries is also being given to food banks.

Hundreds of local residents have responded to Thomson’s invitation to pick for charity, many of them arriving at the farm with buckets and boxes.

Local resident Amanda Taylor, who was one of those picking berries at the farm, said it was devastating to see the crops rotting in a field when so many cannot afford food.

“It’s quite an emotional thing actually, that we’re having to fly produce from Peru when I have this on my doorstep,” she said.

Pauline Cropper, who is volunteering to organise pickers at the farm, said people were finding it difficult to afford their shopping bills and were picking the cheapest options available. 

“Meanwhile, the berries here are sitting on the bushes and going to waste — they’re falling off the bushes, there’s so many of them, because it’s not viable for the local farmer to pay a decent wage,” she said.

Thomson said his plants could have kept producing berries for another 50 years, but continuing to prune and maintain them was too costly. 

“It is devastating for us, but it doesn’t make economic sense to take the fruit to the shops,” he said.

“We have no realistic prospect of making money unless the supermarkets are prepared to pay (more) for Scottish blueberries.”

He plans to continue farming his other crop, cherries, but may build houses on some of his land.

US retailers are hustling to sell their stockpiles of Christmas decorations as the festive season approaches, after tangled supply chains caused many shipments to arrive only after the holidays last year.

As major economies bounced back from the pandemic, companies had struggled to keep up with soaring demand, with manufacturing hit by factory shutdowns during virus outbreaks.

The situation was worsened by a shortage of shipping containers, along with delays at ports from a lack of workers to unload products and transport them to retailers.

It was “very difficult with supply” last year, especially to procure enough Christmas trees and products for customers, said Chris Butler, CEO of decorations seller National Tree.

“This year is a little bit of the opposite,” he told AFP.

“Every retailer, every manufacturer has a lot of trees, has a lot of garlands because everything came late,” he added.

Due to supply chain problems, retailers said part of their festive decorations arrived only in January or February.

“We went from ‘we don’t have enough’ to now ‘we have too much,'” said James Zahn, editor-in-chief at trade publication The Toy Book.

– Reduced spending –

But with soaring consumer prices weighing on household budgets, business executives have expressed concern that customers may tighten their purse strings.

“Consumers might not spend as much,” Butler said.

Inflation rose 8.2 percent from a year ago in September, and the elevated figure triggered concerns that price pressures have become more ingrained.

The Federal Reserve is now walking a tightrope trying to wrestle cost increases down without triggering a recession in the world’s biggest economy.

For toy makers such as Hasbro, which distributes Monopoly, Nerf guns and Transformers action figures, all this means adapting to parents’ reduced purchasing power.

Customers have “become increasingly price-sensitive as the year has progressed,” Hasbro CEO Chris Cocks told an earnings call this month, adding that promotions “will be key in the quarters ahead.”

Similarly, Mattel, the seller of Barbie dolls and Fisher-Price toys, said this week that it would have more discounts as the holidays approach.

“Instead of shippers ramping up activity to prepare for the holiday season, September brought a change of fortune as shipping volumes slowed and shipping prices declined,” said Oren Klachkin, lead US economist at Oxford Economics, in a recent note.

He cited weaker consumer demand and overstocked sellers, factors which experts say could result in steep discounting that cuts profit margins.

– Higher costs –

Some toys have become about 15 percent more expensive due to inflation, said Zahn of The Toy Book.

“That is going to make a difference for families that are already feeling a pinch when groceries and fuel are more expensive,” he said.

Even including storage costs and interest, goods that arrived too late for last year’s holiday season were “still a little cheaper” than those added to inventory this year, Costco chief financial officer Richard Galanti told a recent earnings call.

Merchants like clothing chain Express are opting to sell their products this year in factory outlets instead of clearing them out at lower margins, said chief financial officer Jason Judd at a September conference.

“Santa, snowmen and Christmas trees haven’t changed a lot,” said Jill Timm, chief financial officer at department store chain Kohl’s in a recent conference.

“They’re still going to sell,” he said.

With inflation mounting and precarious geopolitical headwinds rattling Europe, Croatia hopes that its upcoming switch to the euro will bring some semblance of protection to the Balkan country in an uncertain world.

On January 1, Croatia will bid farewell to its currency — the kuna — to become the 20th member of the eurozone.

The former Yugoslav Republic, which joined the European Union nearly a decade ago, posted an annual inflation rate of almost 13 percent in September, compared to 10 percent in the eurozone.

In the build-up to the changeover, authorities have been constantly hammering home the advantages of adopting the euro for the country’s 3.9 million inhabitants.

“The euro brings resilience,” Ana Sabic of the Croatian National Bank told AFP, arguing that Zagreb will, if needed, have access to more favourable borrowing conditions amid economic hard times.

Since July, the European Central Bank has embarked on a policy of monetary tightening as it attempts to rein in galloping inflation caused by soaring energy and food prices triggered by the Russian war in Ukraine.

Analysts continue to argue that eastern European countries in the EU with currencies outside of the eurozone, such as Poland or Hungary, have been even more vulnerable to surging inflation. 

“It is actually an ideal moment for the euro switch,” said Goran Saravanja, the chief economist with the Croatian Chamber of Commerce.

“When major uncertainty dominates the global economy, for a small and open economy like Croatia it’s always better to be a part of a larger association like the eurozone,” he added.

Croatia’s main trading partners are in the eurozone, while the tourism sector — which accounts for 20 percent of its GDP — caters to large numbers of European visitors.

And Croatians have already adopted the euro to a large extent, with about 80 percent of bank deposits denominated in euros.

They have long valued their most prized possessions such as cars and apartments in euros, displaying lack of confidence in local currency dating back to the former Yugoslavia which was gripped by high inflation before its breakup.

During the Yugoslav era and after Croatia’s independence in 1991, properties were mostly valued in the German mark until the introduction of the euro two decades ago.

– Hopes and fears –

“Life will be easier, we calculate everything in euros anyway,” said Roman, an economist from Zagreb who refused to give his surname.

Milan Batur, a retired pharmacist, dismissed concerns from those who fear some traders are taking advantage of the coming transition to the currency to round up prices.

“It’s other things, wars, shortages that cause prices to rise. We can’t blame everything on the euro,” said Batur.

However some still worry they will take a financial hit by the move. 

“The calendar may not be ideal, we could perhaps have postponed it a little because of the situation in the world,” Zdravka Antonic, a florist at a market in Zagreb, told AFP. 

“People are already worried about how this is all going to end and the euro just adds to the uncertainty.”

Since early September, the price of bouquets, like those of other goods and services, bears a double label — with a conversion rate set by Brussels at 7.53 kuna to one euro. 

The system will remain in effect throughout 2023.

“A country that has its own currency is more independent. But when we joined the EU, we also accepted the euro,” said Ana Brkic, a vegetable seller.

Conservative and right-wing opposition groups protested the adoption of the new currency, saying the kuna represented an important symbol of national identity and argued that the euro only benefited larger countries like Germany and France.  

But an attempt last year at triggering a nation-wide referendum to challenge the adoption of the euro failed to gain any traction in the end.

Some Croatians fear that once they have adopted the euro the stark reality of how much poorer they are than many of their EU neighbours will only sink in further.  

According to the latest Eurostat survey published in 2018, the average monthly salary in Croatia was just 1,179 euros compared to more than 2,300 euros in the EU.

An estimated 300,000 Croatian retirees receive a pension of barely 260 euros a month.

“It will spark the feeling of poverty and misery,” said Ana Knezevic, director of  the national Consumer Protection Association.