1
00:00:05,320 --> 00:00:06,760
Speaker 1: This is what the flux.

2
00:00:06,920 --> 00:00:09,320
Speaker 2: I'm justin and I'm harsh Deep and it's Friday, the

3
00:00:09,320 --> 00:00:10,560
Speaker 2: fourteenth of June.

4
00:00:10,320 --> 00:00:13,280
Speaker 1: Ag The unemployment rate for May was down ever so

5
00:00:13,440 --> 00:00:17,120
Speaker 1: slightly on April, from four point one percent to four percent.

6
00:00:17,320 --> 00:00:20,400
Speaker 1: The good news is it this minor change is unlikely

7
00:00:20,480 --> 00:00:23,040
Speaker 1: to drive the RBA to lift interest rate.

8
00:00:23,079 --> 00:00:23,760
Speaker 2: Good news indeed.

9
00:00:23,840 --> 00:00:26,119
Speaker 1: But the bad news is it this minor change is

10
00:00:26,200 --> 00:00:29,440
Speaker 1: also unlikely to drive the RBA to drop interest rates.

11
00:00:29,600 --> 00:00:31,680
Speaker 2: Flux fam, we're coming up to the end of the

12
00:00:31,720 --> 00:00:34,760
Speaker 2: financial year and that means starting to think about all

13
00:00:34,760 --> 00:00:37,440
Speaker 2: the last minute ways to reduce your tax. In the

14
00:00:37,479 --> 00:00:39,879
Speaker 2: Flux app, we've listed a whole range of ways to

15
00:00:39,920 --> 00:00:42,560
Speaker 2: reduce your tax before June thirty, so make sure to

16
00:00:42,640 --> 00:00:43,120
Speaker 2: check it out.

17
00:00:43,320 --> 00:00:47,440
Speaker 1: Really nifty ones in their HD absolutely three savvy stories today,

18
00:00:47,560 --> 00:00:50,720
Speaker 1: let's get into it for our first. Chemist Warehouse is

19
00:00:50,760 --> 00:00:53,680
Speaker 1: eight point eight billion dollar IPO listing has hit a

20
00:00:53,760 --> 00:00:56,800
Speaker 1: roadblock after the ahribl C has worned that its merger

21
00:00:56,840 --> 00:00:58,920
Speaker 1: would substantially lessen competition.

22
00:00:59,160 --> 00:01:02,360
Speaker 2: Surely this merger is too big to fail. Tell me everything.

23
00:01:02,440 --> 00:01:04,800
Speaker 1: It's fair to say that pretty much everyone in Australia

24
00:01:04,800 --> 00:01:06,880
Speaker 1: would know the Chemist ware house brand by now.

25
00:01:06,800 --> 00:01:09,560
Speaker 2: Those big yellow stores that give more Bunnings Warehouse than

26
00:01:09,600 --> 00:01:10,720
Speaker 2: local pharmacy vibes.

27
00:01:10,720 --> 00:01:14,080
Speaker 1: They even have their own radio station, Chemists Warehouse Remix.

28
00:01:14,160 --> 00:01:15,640
Speaker 2: You know you've made it when you've got your own

29
00:01:15,720 --> 00:01:17,360
Speaker 2: radio station and a share.

30
00:01:17,400 --> 00:01:19,720
Speaker 1: Over the past twenty years, chemist Warehouse has grown into

31
00:01:19,760 --> 00:01:21,000
Speaker 1: an absolute manine.

32
00:01:21,200 --> 00:01:24,480
Speaker 2: We're talking over five hundred stores and over twenty thousand

33
00:01:24,480 --> 00:01:27,560
Speaker 2: employees across Australia, New Zealand and even China.

34
00:01:27,720 --> 00:01:30,680
Speaker 1: Now, in December last year, Chemist's Warehouse announced it would

35
00:01:30,680 --> 00:01:33,840
Speaker 1: merge with Sigma Healthcare through an eight point eight billion

36
00:01:33,880 --> 00:01:35,080
Speaker 1: dollar reverse takeover.

37
00:01:35,360 --> 00:01:38,400
Speaker 2: Sigma is a wholesaler in the pharmacy space who supplies

38
00:01:38,480 --> 00:01:41,000
Speaker 2: drugs to small and large pharmacies.

39
00:01:40,440 --> 00:01:43,360
Speaker 1: But it's also the owner of Amcal pharmacies and discount

40
00:01:43,400 --> 00:01:44,600
Speaker 1: drug stores so Jazz.

41
00:01:44,640 --> 00:01:48,120
Speaker 2: Obviously, this massive eight point eight billion dollar merger caught

42
00:01:48,160 --> 00:01:49,720
Speaker 2: the eye of the A Triple C and.

43
00:01:49,680 --> 00:01:52,000
Speaker 1: The A Triple C the big dog has now warned

44
00:01:52,000 --> 00:01:55,040
Speaker 1: that this merger would substantially lessen the competition in the

45
00:01:55,040 --> 00:01:56,520
Speaker 1: pharmacy retailing space.

46
00:01:56,680 --> 00:01:59,880
Speaker 2: With both the wholesale and retail arms, the merged group

47
00:02:00,000 --> 00:02:02,200
Speaker 2: would extend its vertical integration.

48
00:02:01,960 --> 00:02:03,880
Speaker 1: And its influence across the country.

49
00:02:04,000 --> 00:02:06,240
Speaker 2: So tell me Judz, what's the key learning here.

50
00:02:06,360 --> 00:02:09,200
Speaker 1: The greater the vertical integration, the greater the chance of

51
00:02:09,240 --> 00:02:10,400
Speaker 1: being anti competitive.

52
00:02:10,560 --> 00:02:14,320
Speaker 2: As well. Vertical integration can help streamline operations, it can

53
00:02:14,360 --> 00:02:16,639
Speaker 2: also help increase market control.

54
00:02:16,440 --> 00:02:19,320
Speaker 1: And this can raise big red flags with regulators.

55
00:02:19,400 --> 00:02:23,040
Speaker 2: Vertical integration is when a company expands its operations into

56
00:02:23,080 --> 00:02:25,360
Speaker 2: other areas that serve its main business.

57
00:02:25,400 --> 00:02:27,440
Speaker 1: It's kind of like a bakery deciding to grow its

58
00:02:27,440 --> 00:02:30,040
Speaker 1: own wheat as well as selling its delicious cheese mites,

59
00:02:30,040 --> 00:02:32,000
Speaker 1: scrolls and cinnamon buns and jazz.

60
00:02:32,080 --> 00:02:35,280
Speaker 2: Sigma's move to merge with Chemist Warehouse is a textbook

61
00:02:35,400 --> 00:02:36,840
Speaker 2: example of vertical integration.

62
00:02:37,040 --> 00:02:39,920
Speaker 1: So actually, given more than seventy percent of chemist warehouses

63
00:02:40,000 --> 00:02:42,760
Speaker 1: revenue comes from front of house items like sunscreen and

64
00:02:42,800 --> 00:02:46,360
Speaker 1: toothbrushes and perfumes, Chemist Warehouse is actually arguing that it

65
00:02:46,400 --> 00:02:50,000
Speaker 1: competes more with coals and woolies, okay, rather than small pharmacies.

66
00:02:50,160 --> 00:02:52,840
Speaker 2: We'll see what the competition watchdog thinks about that.

67
00:02:53,160 --> 00:02:56,960
Speaker 1: For our second story, Apple is introducing buy now, pay

68
00:02:57,040 --> 00:03:00,399
Speaker 1: later style loans to Australian customers through a new partnership

69
00:03:00,440 --> 00:03:00,920
Speaker 1: with an Z.

70
00:03:01,440 --> 00:03:03,360
Speaker 2: Just as we got the buying our pay later chat

71
00:03:03,400 --> 00:03:05,639
Speaker 2: out of the media. It's back tell me more.

72
00:03:05,680 --> 00:03:08,600
Speaker 1: Okay. So Apple launches Apple Pay feature in iPhones back

73
00:03:08,639 --> 00:03:10,040
Speaker 1: in October twenty fourteen.

74
00:03:10,200 --> 00:03:12,280
Speaker 2: That's where you can connect your card and then tap

75
00:03:12,320 --> 00:03:14,080
Speaker 2: your phone to make a purchase.

76
00:03:13,639 --> 00:03:15,280
Speaker 1: And the whole tap your phone leave you a lot

77
00:03:15,280 --> 00:03:17,160
Speaker 1: at home movement has really taken off.

78
00:03:17,160 --> 00:03:19,800
Speaker 2: Oh yeah, and A and Z was the first Australian

79
00:03:19,840 --> 00:03:22,680
Speaker 2: bank to let its customers make card payments from iPhones

80
00:03:22,720 --> 00:03:23,480
Speaker 2: in twenty sixteen.

81
00:03:23,600 --> 00:03:25,959
Speaker 1: But now they're going one step further because A and

82
00:03:26,040 --> 00:03:28,640
Speaker 1: Z has partnered with Apple to allow iPhone users to

83
00:03:28,680 --> 00:03:31,760
Speaker 1: access buy now, pay later style loans via Apple Pay.

84
00:03:31,880 --> 00:03:34,600
Speaker 2: Basically, when a customer taps their phone, it gives them

85
00:03:34,600 --> 00:03:37,480
Speaker 2: the option to split the payment into three, six or

86
00:03:37,520 --> 00:03:38,840
Speaker 2: twelve month installments, and.

87
00:03:38,800 --> 00:03:41,400
Speaker 1: Then they pay a fee on that rather than interest.

88
00:03:41,200 --> 00:03:43,800
Speaker 2: And Apple ane stopping with just A and Z. They're

89
00:03:43,840 --> 00:03:46,200
Speaker 2: willing to open it up to after pay, Zip and

90
00:03:46,320 --> 00:03:48,520
Speaker 2: others to grow its buy now pay later, but.

91
00:03:48,520 --> 00:03:51,160
Speaker 1: ATCHI many of the other big banks like CommBank a

92
00:03:51,280 --> 00:03:53,320
Speaker 1: pretty reluctant to be out with Apple for this.

93
00:03:53,560 --> 00:03:55,880
Speaker 2: Yep. It allows Apple to grow its power in the

94
00:03:55,920 --> 00:03:57,640
Speaker 2: financial services space.

95
00:03:57,440 --> 00:04:00,840
Speaker 1: Even more so, tell me what is the keyler Keep.

96
00:04:00,720 --> 00:04:03,800
Speaker 2: Your friends closed, but keep your enemies closer HG.

97
00:04:03,960 --> 00:04:06,760
Speaker 1: Well hand Z is partnering with Apple today. It's also

98
00:04:06,760 --> 00:04:09,800
Speaker 1: a direct competitor Apple if it decides to step deeper

99
00:04:09,880 --> 00:04:11,320
Speaker 1: into the banking arena does.

100
00:04:11,160 --> 00:04:14,000
Speaker 2: Apple often seems to buddy up with other companies when

101
00:04:14,040 --> 00:04:16,400
Speaker 2: they lack specific capabilities.

102
00:04:15,760 --> 00:04:18,760
Speaker 1: In this case, it's a banking license in Australia.

103
00:04:18,279 --> 00:04:20,479
Speaker 2: Or back in twenty twelve, it was using Google Maps

104
00:04:20,520 --> 00:04:23,320
Speaker 2: as a default map on iPhones before building their own maps.

105
00:04:23,480 --> 00:04:26,200
Speaker 1: But AHG, once they develop their own solutions or have

106
00:04:26,320 --> 00:04:29,000
Speaker 1: enough market chair, Apple starts to tighten their grip on

107
00:04:29,000 --> 00:04:30,080
Speaker 1: that speciet market.

108
00:04:30,120 --> 00:04:32,520
Speaker 2: Apple first partnered with banks on tap to Pay in

109
00:04:32,600 --> 00:04:35,960
Speaker 2: twenty sixteen, and by twenty twenty two, transactions through smartphones

110
00:04:35,960 --> 00:04:38,720
Speaker 2: in Australia hit ninety three billion dollars.

111
00:04:38,360 --> 00:04:41,160
Speaker 1: And Apple's Tap to Pay represents an eighty percent share

112
00:04:41,240 --> 00:04:42,920
Speaker 1: of Wow Digital Wall at payments.

113
00:04:43,000 --> 00:04:45,279
Speaker 2: Now, Apple makes more than one hundred and thirty million

114
00:04:45,320 --> 00:04:47,960
Speaker 2: dollars in annual fees in Australia from the banks using

115
00:04:47,960 --> 00:04:49,039
Speaker 2: its software and AHG.

116
00:04:49,240 --> 00:04:51,599
Speaker 1: This is part of the reason why CommBank has been

117
00:04:51,640 --> 00:04:55,440
Speaker 1: so critical about Apple's growing power in payments and financial

118
00:04:55,480 --> 00:04:56,640
Speaker 1: services in Australia.

119
00:04:56,720 --> 00:05:00,200
Speaker 2: For our third and final story, Quantas has whole only

120
00:05:00,240 --> 00:05:03,160
Speaker 2: acquired online travel business trip a Deal in a two

121
00:05:03,279 --> 00:05:06,240
Speaker 2: hundred and eleven million dollar acquisition with the hopes to

122
00:05:06,360 --> 00:05:07,960
Speaker 2: ramp up its loyalty points offering.

123
00:05:08,080 --> 00:05:10,479
Speaker 1: Quanta's really been showing its loyalty program a lot of

124
00:05:10,520 --> 00:05:12,280
Speaker 1: love this year, so tell me more. Well.

125
00:05:12,440 --> 00:05:15,880
Speaker 2: Just Quantus, which is Australia's national airline carrier, is also

126
00:05:15,920 --> 00:05:17,760
Speaker 2: the third oldest airline in the world.

127
00:05:17,800 --> 00:05:19,640
Speaker 1: But it's fair to say it has been on a

128
00:05:19,760 --> 00:05:21,400
Speaker 1: roller coast to geny lately yep.

129
00:05:21,480 --> 00:05:25,600
Speaker 2: Since twenty twenty, Quantus has had mass layoffs, gigantic profit announcements,

130
00:05:25,640 --> 00:05:28,200
Speaker 2: a concerning a triple C inquiry I ME, and a

131
00:05:28,240 --> 00:05:29,920
Speaker 2: CEO change just to name a few.

132
00:05:30,080 --> 00:05:32,560
Speaker 1: But after bringing in a new CEO, Quantus has been

133
00:05:32,560 --> 00:05:34,560
Speaker 1: on a mission to rebuild its reputation.

134
00:05:34,800 --> 00:05:37,200
Speaker 2: And now Quantus has announced that it will acquire the

135
00:05:37,240 --> 00:05:40,600
Speaker 2: remaining forty nine percent stake in online travel business trip

136
00:05:40,640 --> 00:05:42,640
Speaker 2: a Deal in a deal worth two hundred and eleven

137
00:05:42,760 --> 00:05:43,560
Speaker 2: million dollars.

138
00:05:43,640 --> 00:05:46,200
Speaker 1: And this is after Quantus had acquired a major stake

139
00:05:46,240 --> 00:05:48,400
Speaker 1: in tripa Deal back in twenty twenty two. They've now

140
00:05:48,400 --> 00:05:50,159
Speaker 1: come back for the whole business. Yep.

141
00:05:50,240 --> 00:05:53,240
Speaker 2: Quantus expects this investment to bring in at least fifty

142
00:05:53,440 --> 00:05:54,600
Speaker 2: million dollars annually.

143
00:05:54,760 --> 00:05:57,720
Speaker 1: What Quantus is most excited about is leveraging Triper Deal

144
00:05:57,760 --> 00:06:00,159
Speaker 1: to offer its customers more ways to cash in on

145
00:06:00,200 --> 00:06:01,479
Speaker 1: their frequent fly points.

146
00:06:01,520 --> 00:06:03,640
Speaker 2: So tell me, Jars, what's the key learning here.

147
00:06:03,720 --> 00:06:06,440
Speaker 1: When a business officer loyalty program, it needs to manage

148
00:06:06,480 --> 00:06:09,560
Speaker 1: the risk of its growing liability very carefully.

149
00:06:09,680 --> 00:06:12,520
Speaker 2: You see, Quantitus customers have been earning their points at

150
00:06:12,520 --> 00:06:13,440
Speaker 2: an increasing rate.

151
00:06:13,520 --> 00:06:17,040
Speaker 1: We're talking about two hundred billion points accumulating annually.

152
00:06:17,360 --> 00:06:19,880
Speaker 2: In fact, points issuance shot up by forty eight percent

153
00:06:19,960 --> 00:06:20,960
Speaker 2: last financial year.

154
00:06:21,040 --> 00:06:24,120
Speaker 1: But actually, these unused points aren't just an issue for customers.

155
00:06:24,160 --> 00:06:26,760
Speaker 1: They're a liability on Quantus's balance sheet too.

156
00:06:27,000 --> 00:06:30,320
Speaker 2: Yeah, unused frequent flyer points are a liability worth about

157
00:06:30,360 --> 00:06:33,479
Speaker 2: thirteen point eight percent of Quantus' overall revenue.

158
00:06:33,520 --> 00:06:35,479
Speaker 1: And that's why Quantus has been putting in efforts to

159
00:06:35,480 --> 00:06:38,560
Speaker 1: find better ways for customers to use their frequent fly points.

160
00:06:38,600 --> 00:06:41,320
Speaker 1: Flux Family. We are sixteen days away from the end

161
00:06:41,360 --> 00:06:44,200
Speaker 1: of this financial year, and that means sixteen days to

162
00:06:44,240 --> 00:06:47,720
Speaker 1: reduce your caxible income in financial year twenty twenty four.

163
00:06:47,839 --> 00:06:49,400
Speaker 1: We've got to cover it in the Flux app with

164
00:06:49,440 --> 00:06:52,320
Speaker 1: a whole range of ways to reduce attacks before June thirty,

165
00:06:52,400 --> 00:06:53,880
Speaker 1: so make sure to check it all out.

166
00:06:53,920 --> 00:06:55,720
Speaker 2: Thanks for listening, and we'll see you on Monday.