Afternoon Coffee: Nestlé, Starbucks Sign $7.15B Licensing Deal, Suppliers to Lose in Sainsbury’s-Asda Merger


China announced it will increase its imports of Indonesian palm oil by 500,000 tons, the Wall Street Journal reported. This marks a sharp increase for a country that is already the world’s third largest buyer of Indonesian palm oil.

Indonesia is the world’s largest producer of palm oil, having exported around 30 million tons in 2017. Palm oil production is not without significant controversy, however. A leading cause of deforestation, palm oil production has been linked to climate change.

Supplier Worries Amidst Sainsbury’s-Asda Merger

Suppliers and manufacturers are expected to bear the bulk of Sainsbury’s and Asda’s planned merger, FarmingUK reported. The deal, which would create Britain’s largest grocery company, will lower prices by up to 10%, potentially at the expense of farmers and suppliers, particularly small businesses.

Nestlé, Starbucks Ink $7.15B Coffee Deal

Nestlé will pay Starbucks $7.15 billion for the exclusive right to sell the latter’s coffee and tea worldwide, Reuters reported. Starbucks stands to benefit from the stronger international reach of what is the largest food and beverage company in the world, while Nestlé expects the licensing deal to boost its earnings.

More Merger Woes

The planned acquisition of Sprint by T-Mobile is facing scrutiny and opposition in Washington, Reuters reported. If the acquisition goes through, it would decrease the number of major wireless carriers in the U.S. from four to three.

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