Speaker 1: This is what the Flux. I'm Brett and Justin at Wednesday,
Speaker 1: this seventh of August, Juzzy boy, the Reserve Bank of
Speaker 1: Australia put a pause on the cash rate for the
Speaker 1: sixth consecutive meeting. It's fair to say they're holding onto
Speaker 1: that four point three five percent cash rate tight. And
Speaker 1: I'm talking tighter than an Olympic gymnast on the ropes.
Speaker 1: Those athletes are very very impressive.
Speaker 2: Now, Fox, maam, did you know two million Australians are
Speaker 2: property investors already and one point two million and negatively
Speaker 2: gearing that property. So if you're keen to learn more
Speaker 2: about how to get on the property investing journey, make
Speaker 2: sure to check out the Academy in the Flux app
Speaker 2: this March.
Speaker 1: Three marvelous stories today, Juzzy boy, let's do it for
Speaker 1: our first. Treasury Wine Estates, the owner of Penfolds, will
Speaker 1: sell off some of its cheaper wine brands after budget
Speaker 1: drinkers tighten their purse strings.
Speaker 2: It's Penfolds or Bus for Treasury Wine right now, be man,
Speaker 2: So tell me more about this one. Well.
Speaker 1: Treasury Wine Estates is the wine brand behind Big Dog
Speaker 1: pen Folds, but also the cheaper brands like wolf Blasts,
Speaker 1: Linderman's Yellow Glen. Nothing like a goonsack from wolf Blasts
Speaker 1: now Josey Boy. Over the past few years, Treasury Wine
Speaker 1: Estates has experienced more flips and turns than Simone Biles
Speaker 1: in Paris.
Speaker 2: You've definitely be watching the Olympics bay Man.
Speaker 1: I have. Treasury Wine has faced tariffs in China, excise
Speaker 1: taxes in Australia, and also of course changing market conditions, so.
Speaker 2: It's no surprise that it's had to make some big
Speaker 2: calls on its brands.
Speaker 1: And now Treasury Wine has announced plans to sell off
Speaker 1: some of its cheaper wine brands.
Speaker 2: And the reason wine drinkers who normally buy wines around
Speaker 2: the ten dollars bottle mark just aren't drinking as much.
Speaker 1: And how much will we talk in Jozi Boy.
Speaker 2: Well, analysts reckon they may only be able to sell
Speaker 2: these cheaper brands for around one hundred million bucks collectively.
Speaker 1: And that's because there's limited demand from buyers for these
Speaker 1: lower margin wine and.
Speaker 2: That's exactly why Treasury Wine wants to offload them. A
Speaker 2: little bit of brand portfolio management very interesting, So what
Speaker 2: is the key learning here? Managing a brand portfolio involves
Speaker 2: making decisions about which brands to grow, maintain, and prune.
Speaker 1: And Jesiboy, Treasury Wine has made the decision to sell
Speaker 1: off its lower priced brands.
Speaker 2: In other words, they're pruning for profitability.
Speaker 1: Huh, and that means they can concentrate on their premium
Speaker 1: brands like pen Folds and dal Vineyards.
Speaker 2: Get this, Nearly seventy five percent of Treasury Wine's profits
Speaker 2: come from its premium wine portfolio.
Speaker 1: So rather than invest time and effort into a declining market,
Speaker 1: and Treasury Wine is aiming to focus on quality wines
Speaker 1: over quantity of wine.
Speaker 2: You're telling me Linderman's isn't equality drop b.
Speaker 1: Man, Treasury Wine isn't the only alcohol brand to dust
Speaker 1: off the low quality cobwebs.
Speaker 2: No Perna ricard. They also announced last month that they're
Speaker 2: going to sell Jacob's Creek to Accolade Wines.
Speaker 1: So now Juzy Boy Treasury Wine will focus on higher priced,
Speaker 1: higher quality, and higher margin bottles of vino. For our
Speaker 1: second story, a US court has found that Google spent
Speaker 1: billions of dollars to illegally monopolize the online search market.
Speaker 2: Geez, that sounds horribly damning. D man, so tell me
Speaker 2: what is happening here.
Speaker 1: Well, we know Google first started back in nineteen ninety
Speaker 1: eight under the name BackRub. That's right, back Rub.
Speaker 2: And even though Google has launched a squillion products like
Speaker 2: Google Maps, Gmail, Google Drive, its search division is still
Speaker 2: its most lucrative.
Speaker 1: But does the way Back in twenty twenty, the US
Speaker 1: Justice Department started to pursue an anti trust case against
Speaker 1: Google in court.
Speaker 2: That's the US version of anti competitive monopolies.
Speaker 1: The Justice Department claimed that Google suppressed competition in the
Speaker 1: search space and had they do this been man, have
Speaker 1: you ever heard of twenty six billion US dollary doudar days?
Speaker 2: That's the amount Google page to companies like Apple to
Speaker 2: be their default search engine.
Speaker 1: It also paid Mozilla, Samsung, Motorola, even Sony, and the
Speaker 1: US Justice Department claimed that these payments effectively blocked any
Speaker 1: competitor from succeeding in the search market. And now four
Speaker 1: years later, the judge has agreed that Google is a monopolist.
Speaker 1: You like that word.
Speaker 2: Yeah. The judge reckons that these payments meant Google could
Speaker 2: increase their ad prices without any meaningful competitive limitation.
Speaker 1: And the next thing that happens Google's owner, Alphabet saw
Speaker 1: its shares drop four and a half percent.
Speaker 2: And be man. This sends a very strong signal to
Speaker 2: tech companies of what is to come.
Speaker 1: Oh well, like where you're going here, Josey boy, what's
Speaker 1: the gay learning here?
Speaker 2: One small step for the Department of Justice, one giant
Speaker 2: ly for antitrust cases.
Speaker 1: Many analysts believe that although Google may have been a monopoly,
Speaker 1: it was almost too big to prosecute against.
Speaker 2: Get this, be Man. Google generated one hundred and seventy
Speaker 2: five billion US dollars in revenue from its search based
Speaker 2: advertising last year alone.
Speaker 1: And it does ninety percent of the world's Internet searches.
Speaker 2: Be Man. This win in court for the Department of
Speaker 2: Justice puts other big tech companies on notice.
Speaker 1: Yep, Amazon, Apple, Meta, They're all facing their own monopoly
Speaker 1: lawsuits from the US government as well.
Speaker 2: And to make matters worse, Google, they'll be going back
Speaker 2: to trial against the US government for a second time.
Speaker 1: And given the decision made in this court, the other
Speaker 1: big tech companies may be shaking in their trillion dollar
Speaker 1: booties for their own cases. For our third and final story,
Speaker 1: Mars Incorporated is considering a takeover of Kellnova. The makers
Speaker 1: of Pringles and Coco Pops. Quite huge news to snack on. No, no, no, no, no, normal,
Speaker 1: What is the story, Juzzy boy.
Speaker 2: Well me man. Mars is the global snack food company
Speaker 2: started in the US in nineteen eleven, over one hundred
Speaker 2: years ago. Yep.
Speaker 1: They're the owner of brands like Mars, Bars, Milky Way,
Speaker 1: m and MS, Skittle, Snickers, and of course, just to
Speaker 1: name about six.
Speaker 2: Everything you'd expect to find in a birthday party, olibai Ah.
Speaker 1: And now Mars is understood to be exploring an acquisition
Speaker 1: of kelen Over, which used to be named care Logs
Speaker 1: horrible rebrand, I must say, deplorable rebrand.
Speaker 2: And that's the company behind Pringles, Special k, Coco Pope,
Speaker 2: Sultana Brand and.
Speaker 1: Many many more and Jazzy Boy. If this deal goes through,
Speaker 1: it would be the biggest deal in history for both companies.
Speaker 2: Which is why the news of this potential deal sent
Speaker 2: Kelenover shares up a massive twenty percent.
Speaker 1: And this merger is coming at a time when the
Speaker 1: snack food industry is battling seriously low consumer demand, firstly
Speaker 1: due to the cost of living squeeze. And here's the twist,
Speaker 1: also thanks to the rise of weight loss drugs.
Speaker 2: So what is the key learning here.
Speaker 1: Competitors can be found in the unlikeliest of places.
Speaker 2: You see me man. Generally, companies compete against other companies
Speaker 2: in the same industry for market share.
Speaker 1: So snack food companies like mars Kelenova craft times competing
Speaker 1: against each other. That all makes sense.
Speaker 2: But with the rise of weight loss drugs like a Zempi,
Speaker 2: some customers are actually substituting snack food appetite suppressing weight
Speaker 2: loss drugs.
Speaker 1: Get this dozzed. Weight Grocery spending in household that use
Speaker 1: weight loss drugs decreased by between six and nine percent,
Speaker 1: with snacks taking the biggest hit.
Speaker 2: That's according to Morgan Stanley.
Speaker 1: So with the new unexpected challenger rivaling snack food companies,
Speaker 1: it's new wonder they're finding ways to join forces.
Speaker 2: Am Twenty percent of tax paying Australians are actually property investors,
Speaker 2: and if that's something you're keen to do now or
Speaker 2: in the future, the Property Investing Academy that we have
Speaker 2: this month is the perfect way to get started. To
Speaker 2: make sure you download the Flux app and check out
Speaker 2: the academy.
Speaker 1: Thanks for listening and we'll see you on Friday,