Speaker 1: Hello, and welcome to The Credit Edge, a weekly markets podcast.
Speaker 1: My name is James Crumbie. I'm a senior editor at Bloomberg.
Speaker 1: This week, we're very pleased to welcome to the show
Speaker 1: Scott Carpenter, who covers structured finance for Bloomberg News in
Speaker 1: New York. How are you doing, Scott, doing very well?
Speaker 1: Thanks for having me. We're also delighted to see Louise Parker,
Speaker 1: who covers consumer companies for Bloomberg Intelligence based in London.
Speaker 1: Hello Louise, Hi.
Speaker 2: James, thanks for having a long story.
Speaker 1: We'll be coming back to Louise later in the show
Speaker 1: to talk about two of my favorite things, beer and
Speaker 1: the US culture wars. So do stay with us. But first,
Speaker 1: Scott Carpenter with Bloomberg News office buildings. Why are they
Speaker 1: under such pressure now? Why is everything blowing up?
Speaker 3: Well? The short answer is from home. Now. You might
Speaker 3: remember back in February everything kind of this story exploded
Speaker 3: onto the scene when Brookfield defaulted on to La office towers.
Speaker 3: Brookfield is a very big company. It's not as though
Speaker 3: that company is facing serious distress. What it was doing
Speaker 3: was realizing whoa A lot of people are working from home?
Speaker 2: Now?
Speaker 3: These buildings aren't worth as much as they used to
Speaker 3: be their office buildings, so they chose to default, which
Speaker 3: meant that they're effectively not choosing to refinance. And then
Speaker 3: not too much long after that, another big company, Pimco,
Speaker 3: also defaulted on some office towers and for similar reasons.
Speaker 3: You've been seeing more and more of this over time,
Speaker 3: and it's become almost a staple of headlines. You see,
Speaker 3: this office building is falling behind, or this one is defaulted,
Speaker 3: and so on. And one thing that happened recently is
Speaker 3: that these defaults are piling up and they're starting to
Speaker 3: rise at a faster radar, not only defaults, but also
Speaker 3: the rate at which office loans are falling behind on
Speaker 3: their payments.
Speaker 1: So sorry, let me just tell you that. So, people
Speaker 1: aren't going back to the office because of you know,
Speaker 1: obviously we're working from home for much of the pandemic.
Speaker 1: But now people are going back to the office. Everyone's
Speaker 1: coming into work, the subway's a pact. What's going on
Speaker 1: and why I think coming to a head right now?
Speaker 3: Two reasons. First, even though people are going back to
Speaker 3: the office, there's a new regime of the three day
Speaker 3: work week. This has changed everything it means that yes,
Speaker 3: you're going back to the office, but you're not going
Speaker 3: as much. And companies know this and they're looking to
Speaker 3: downsize into smaller offices. So they're they're looking to shift
Speaker 3: from one building to a smaller building, maybe a more modern,
Speaker 3: nicer building as well. It's a good opportunity. The other
Speaker 3: thing is higher interest rates.
Speaker 1: So people use those desks and they share them, so
Speaker 1: they go in. People come in different days. I mean,
Speaker 1: it seems like there's big peaks and troughs in that
Speaker 1: whole return to work thing. Everyone's coming in on Tuesdays
Speaker 1: to Thursday and off one Monday to Friday. Don't you
Speaker 1: still need the same kind of office to do that.
Speaker 3: Yeah, you do. There's always going to be office. The
Speaker 3: offices are always going to be around. I think people,
Speaker 3: I think companies are looking at this thinking this is
Speaker 3: this is our moment to switch to a nicer office.
Speaker 3: They're they're changing things up and they're just they're just
Speaker 3: realizing that far fewer people are coming into the office.
Speaker 3: I think that I think the standard work week is
Speaker 3: now three days a week in the office, two at
Speaker 3: home or the or the or the similar two days
Speaker 3: a week in the office three days at home. Overall,
Speaker 3: that result in all lot less demand for offices office space.
Speaker 1: So let's talk about the other point. You raise higher
Speaker 1: interest rates. Obviously rates have shot up much faster and
Speaker 1: much more than most people expected. Why does that become
Speaker 1: such a problem for office buildings.
Speaker 3: Well, if you're an office landlord and you need to
Speaker 3: rent out some space at a nice, fancy building, you
Speaker 3: used to be able to do that at pretty low rates,
Speaker 3: but then the Fed raised rates. Now either you want
Speaker 3: to maybe you need to refinance your existing loan. Suddenly
Speaker 3: it's a lot higher, you know, several percentage points higher,
Speaker 3: which can really start to add up. So you combine
Speaker 3: that with the fact that you don't need that office
Speaker 3: quite as much as you used to, and suddenly you're
Speaker 3: looking at alternatives. You want a smaller office, you want
Speaker 3: to move to somewhere else. It just overall makes it
Speaker 3: much less, much more expensive and therefore lesser active.
Speaker 1: So you've written, you mentioned to philps, but you've written
Speaker 1: a lot about delinquencies. What does that mean? Why delinquent
Speaker 1: office loans out a five year high.
Speaker 3: A delinquency is a word that means you've fallen behind
Speaker 3: on your payments, usually an interest payment and delinquency rates
Speaker 3: on office loans right a five year high, so they're
Speaker 3: about there are four percent, and this is according to Trepp,
Speaker 3: which keeps which attracts a lot of data on offices
Speaker 3: and commercial real estate property. Four percent doesn't sound like
Speaker 3: a whole lot, but it's the highest since twenty eighteen.
Speaker 3: And remember back in twenty eighteen, there were still a
Speaker 3: lot of office loans out there from the pre two
Speaker 3: thousand and eight era when it were very easy loan terms,
Speaker 3: and probably some office company borrowers were getting loans that
Speaker 3: they shouldn't have been. So now now it's different. Now
Speaker 3: what we're seeing is related to the pandemic, and it's
Speaker 3: by all accounts, it's going higher. This is probably going
Speaker 3: to be just the beginning of the sharp uptick in
Speaker 3: the rate at which these office loans are falling behind.
Speaker 3: There was a there was another there was a podcast
Speaker 3: co host of Trapp who said it could get to
Speaker 3: ten percent by the end of this year. So ten
Speaker 3: percent of all office loans at least tied to a
Speaker 3: certain part of the finance sector CMBs that will fall
Speaker 3: behind at least thirty days behind on one of their payments.
Speaker 1: So you mentioned CMBs, which immediately sets off jogging alarms
Speaker 1: in my head. Explain what that is? I mean, you know,
Speaker 1: anytime there's an acronym in finance often ends in TIS.
Speaker 1: What's the CMBs.
Speaker 3: CNBS stands for commercial mortgage backed securities, And you can
Speaker 3: think of it as a pool. It's a pool of
Speaker 3: commercial loans, a big part of which's office. So for example,
Speaker 3: you could take an office loan and remember these are
Speaker 3: that's going to be a big loans, that's going to
Speaker 3: be millions, you know, tens of millions of dollars. And
Speaker 3: then you take twenty or so other loans. Some of
Speaker 3: those are office loans, some of their some of those
Speaker 3: are loans on industrial properties, some of those are loans
Speaker 3: on retail properties. And you and each of those is
Speaker 3: is producing regular interest payments every month, maybe millions of dollars.
Speaker 3: So all together, if you combine all of these loans,
Speaker 3: you've got it income streams Suddenly that's you know, that's
Speaker 3: worth a lot of money, and investors will pay for
Speaker 3: that income stream. That is a CMBs when you combine
Speaker 3: the income streams from these different properties into a steady
Speaker 3: overall stream of payments, and the problem recently is that
Speaker 3: offices used to be a super safe part of this
Speaker 3: income stream that's going into these cnbs, and that's starting
Speaker 3: to change now they're no longer safe. There's there's big problems.
Speaker 3: People don't really know how bad it's going to get,
Speaker 3: and it's making the lenders in the CMBs, the ones
Speaker 3: who are buying the income stream, it's making them very nervous.
Speaker 1: Sounds a lot to me like two thousand and eight subprime.
Speaker 1: Should we worry about all that all over again?
Speaker 3: I don't think we should worry about that. This is
Speaker 3: a fundamentally different space. I think if you go all
Speaker 3: the way back to subprime mortgages, that was some seriously
Speaker 3: risky loans for it, just to put it in perspective
Speaker 3: that I think the default right, So the share of
Speaker 3: those loans of prime mortgages, remember those are also much
Speaker 3: much smaller because they were individual borrowers that defaulted was
Speaker 3: you know, at the peak twenty thirty maybe forty percent
Speaker 3: or so. These are not going to have nearly the
Speaker 3: same default, right. It's going to be below I don't want,
Speaker 3: you know, below ten, maybe five, I don't know, but
Speaker 3: not in the same universe. These are corporate borrowers, they're
Speaker 3: generally a little bit safer. Nevertheless, though you are seeing
Speaker 3: a little bit of an increase, and that's at a minimum.
Speaker 3: It's going to make people nervous.
Speaker 1: I mean, it does sound particularly worrying when you've got
Speaker 1: all these big office buildings just sitting out there unoccupied.
Speaker 1: I mean, I travel around the United States and also Candada.
Speaker 1: Look at Toronto. I mean, it's just full of high
Speaker 1: rise buildings, a lot of them unoccupied. They're commercial and
Speaker 1: they can't be retrofitted, they can't suddenly be changed into condos.
Speaker 1: So what's the endgame here.
Speaker 3: Nobody really knows. But I think one thing that everybody's
Speaker 3: talking about is how bad is this going to get
Speaker 3: for the banks. Banks buy a lot of commercial real estate,
Speaker 3: especially regional banks, that they're pretty exposed to commercial real estate.
Speaker 3: I'm not sure how exposed they are to this particular slice,
Speaker 3: which is CMBs, but there's definitely going to be some
Speaker 3: pain that. I think the top sort of national banks
Speaker 3: tend to be some of the biggest lenders of cnbs.
Speaker 3: They're fine, They're obviously going to be fine, but they're
Speaker 3: still gonna you know, they're still going to be experiencing
Speaker 3: some pain over this. Then, so there's that the investors,
Speaker 3: the banks that are buying the cnbs or the lending
Speaker 3: into them, that are going to take a hit. And
Speaker 3: then it's going to be a lot harder for anybody
Speaker 3: who wants to refinance to refinance because rates are so
Speaker 3: much higher. Let's say you need to refinance an office loan,
Speaker 3: Suddenly you might not be able to afford it, and
Speaker 3: that could be that could lead to some problems as well. Ultimately,
Speaker 3: I'm not really sure what's going to happen. I don't
Speaker 3: think anybody is really sure, aside from the fact that
Speaker 3: we do have this one big seismic trend rippling through
Speaker 3: the whole sector, which is people are not working in
Speaker 3: the office as often as they used to.
Speaker 1: Are there any particular parts of the United States that
Speaker 1: are particularly exposed.
Speaker 3: Yeah, you hear about some markets that are worse than others.
Speaker 3: Los Angeles is downtown LA. We had a great story
Speaker 3: by John Gidtelson a week or a couple of weeks
Speaker 3: ago about how Los Angeles office towers are really struggling.
Speaker 3: It's not viewed as a very attractive space, and that's
Speaker 3: where there's been a lot of defaults on office buildings.
Speaker 3: That was where that was where Brookfield defaulted on those
Speaker 3: two LA office towers. That that catapulted this trend into
Speaker 3: the into the headlines, and then I think there have
Speaker 3: been a couple since then. Yeah, so I'd say LA
Speaker 3: is a is an area to watch and that that,
Speaker 3: in my mind stands out. There are a couple of others.
Speaker 1: To be clear, when you're talking about investors like Brookfield,
Speaker 1: you know, these are big, deep pocketed investors. They're not
Speaker 1: struggling for cash, but they are effectually be walking away
Speaker 1: from some of these real estate assets that they own.
Speaker 3: Yep, that's right there. It's it's you could call it
Speaker 3: a strategic default. It's not. It's not a default driven
Speaker 3: by they would really like to refinance. They just they can't.
Speaker 3: They don't have any money, so they have to. It's
Speaker 3: a default where they're saying it's just not worth it
Speaker 3: to keep paying into this thing. So yeah, back in February,
Speaker 3: Brookfield was coming up against this big maturity date and
Speaker 3: it thought and it's and it decided, you know what,
Speaker 3: rather than refinance this thing and pay higher rates, we're
Speaker 3: just going to walk away. That made the most sense
Speaker 3: for them.
Speaker 1: So before we talk to Louise Parker at Boomberg Contlligence,
Speaker 1: what's the next big story to watch here? Do you think, Scott?
Speaker 3: Does it have to be related to to office US
Speaker 3: anything instructured finance, which tends to scare a lot of
Speaker 3: people generally, Well, everybody's looking at subprime auto loans. I'm
Speaker 3: working on subprime auto loans these days, for subprime model loans.
Speaker 3: The reason it's interesting to me is because they get
Speaker 3: packaged into bonds, just like these office loans do. And
Speaker 3: what is going to the big question is what will
Speaker 3: happen with interest rates now being a lot higher and
Speaker 3: more and more subprime borrowers are falling behind on their payments.
Speaker 3: There's gonna be some pain for some bondholders who are
Speaker 3: exposed to people falling behind. It's going to be pretty limited,
Speaker 3: though there's a couple of deep subprime companies that are
Speaker 3: that are more exposed than others. Overall, well, I think
Speaker 3: people are not fundamentally too worried, but yeah, there could be.
Speaker 3: There could be a little bit of pain for some
Speaker 3: of the more deep some prime borrowers. And if those
Speaker 3: loans get packaged into bonds, those bonds could be facing
Speaker 3: a bit of stress.
Speaker 1: Very excited to see what you come up with on
Speaker 1: that great stuff. Scott the Carpenter from Bloomberg News, thanks
Speaker 1: so much for joining us.
Speaker 3: Thanks very much. I read all of.
Speaker 1: Scott's scoops on the Bloomberg terminal and of course at
Speaker 1: Bloomberg dot com. So, as I mentioned earlier, we're very
Speaker 1: pleased to have with us Louise Parker, who looks at
Speaker 1: consumer companies for Bloomberg Intelligence, and we're here to talk
Speaker 1: about the King of beers. What's the situation, Louise.
Speaker 2: Well, h James or is it the king of beers?
Speaker 2: Certainly in the US in recent weeks, bud Light has
Speaker 2: lost its crown. It has been the number one beer
Speaker 2: in the US market for over twenty years and going
Speaker 2: back to early April in so a Twitter or not,
Speaker 2: Actually I think it was Instagram and Twitter post by
Speaker 2: a transgender I guess someone who had a marketing alliance
Speaker 2: with the company. She was celebrating her one year since
Speaker 2: transition and had one can of bud Light with her
Speaker 2: image on it, and the market for bud Light just
Speaker 2: fell through the floor. In the world of social media,
Speaker 2: there was a boycott for bud Lights, and anytime customers
Speaker 2: are alienated by your advertising and the company says to
Speaker 2: their customers, this was not a marketing campaign. Okay, anytime
Speaker 2: you are in social media and you're paying someone to
Speaker 2: push your brand, that is marketing. That is a campaign.
Speaker 2: The senior management behind the marketing alliance have been pushed aside,
Speaker 2: let's say, not necessarily sacked, but no longer in their positions,
Speaker 2: and senior management at AB InBev, who owns brand bud Light,
Speaker 2: having come out to say, we messed up. We made
Speaker 2: a mistake of just carrying on like nothing's changed. But
Speaker 2: now we're seeing in the numbers coming through from May
Speaker 2: that bud Light has actually lost its crown to be
Speaker 2: the number one beer in the US market to modelo
Speaker 2: especial and interesting thing there is. But the ABI used
Speaker 2: to own that brand in America, but they had to
Speaker 2: sell it for concentration reasons when they bought sab Miller
Speaker 2: about six years ago, so they owned the brand Modello
Speaker 2: outside of America. But now it has the number one
Speaker 2: position in America. And as you and I were chudding recently, James,
Speaker 2: this is a cultural war. Now I don't reside in
Speaker 2: the US so maybe you can tell me what you're
Speaker 2: seeing on the airwaves about what's happening to bud Light.
Speaker 1: Well, I live in the bubble of New York City
Speaker 1: and in particular Brooklyn, so everyone's drinking bud Light all
Speaker 1: the time. I prefer other types of alcoholic beverage, but
Speaker 1: other beers are available too. But why, I mean, this
Speaker 1: is fascinating exactly these say culture wars. But why are
Speaker 1: we talking about this on a credit show? Why does
Speaker 1: it affect the company so badly in terms of its revenue?
Speaker 2: Well, it does because bud Light is such an important beer.
Speaker 2: Only they only generate seventeen percent of their total beer
Speaker 2: volume in the North American market, so that's US, Canada,
Speaker 2: and Mexico. But they generate that's volume, sales volume seventeen percent,
Speaker 2: but it's almost thirty percent, twenty eight point seven percent
Speaker 2: of sales revenue. And when you get to Ibida, that's
Speaker 2: where they're not some Bolts earnings, it's over thirty percent,
Speaker 2: thirty point five percent. I'm not going to try and
Speaker 2: do a presentation here, but those numbers are coming down.
Speaker 2: So this is consensus are saying that volumes across North America,
Speaker 2: across all of their brands. Now they have a lot
Speaker 2: of brands which have also lost here. So they have
Speaker 2: not just bud Light, they have Michelo Vulture. They own Budweiser,
Speaker 2: bush Light, and Natural Light, and they had to also
Speaker 2: sell Corona, And so the brands that are gaining share
Speaker 2: are the ones that they used to own. So any
Speaker 2: any brand that is not owned by ABI is actually
Speaker 2: gaining share. Add to the detriment of Bidlight and all
Speaker 2: of its sister brands under ABI umbrella. And what the
Speaker 2: analyst is saying this year is that North American volumes
Speaker 2: will be down five percent. That's in revenue, that's only
Speaker 2: one percent, But they're seeing North America ebit yards down
Speaker 2: eight percent. Now that's why I care as a credit analyst.
Speaker 2: It's had a pretty dramatic impact on the share price
Speaker 2: for ABI bod in the US as the ticker is,
Speaker 2: but it's off its lows. It was down about seventeen percent.
Speaker 2: It's off the lows now, but the bonds spreads haven't
Speaker 2: really moved. So I care as a credit analyst. What's
Speaker 2: happening on the cash bonds The company has. ABI has
Speaker 2: bonds in sterling, euros dollars and I've looked at it
Speaker 2: this week against some of its peers in the beverage world,
Speaker 2: and they really haven't moved, they haven't widened, They've just
Speaker 2: tracked the peer group for beverages. It is interesting for
Speaker 2: this company because they levered up five six years ago.
Speaker 2: As I said, when they bought sab Miller, they took
Speaker 2: on over one hundred billion dollars of debt. They've managed
Speaker 2: to reduce that down to about seventy billion and reduced
Speaker 2: leverage from upwards five times down to three and a
Speaker 2: half time. So they've just retained or just regained a
Speaker 2: single A credit rating. And it's great for the company
Speaker 2: because they're in the market buying back bonds. The way
Speaker 2: they reduce their debt is tendering their their bonds. But
Speaker 2: now the sort of advanced situation where with declining earnings,
Speaker 2: they very well have to look at what the knock
Speaker 2: on effect to cash flow is. Will the bid for
Speaker 2: the bonds be supported by buybacks if their cash flow
Speaker 2: is indeed reducing? So that's why could and Less care.
Speaker 1: But the equity is down and the bonds aren't. Do
Speaker 1: we expect the bonds to start falling in to catch
Speaker 1: catch up?
Speaker 2: With the equity Eventually, yeah, really good question. Possibly we
Speaker 2: won't see the full extent of this, even though we
Speaker 2: get volume data on a week to week basis. The
Speaker 2: information industry informations out there and it's on the terminal
Speaker 2: for people that want to look at it. The company
Speaker 2: won't report their second quarter results until the first week
Speaker 2: of August, and that's when we might see them have
Speaker 2: to reduce their guidance. We haven't seen anything to date.
Speaker 2: We saw when their first quarter came out, which was
Speaker 2: three weeks after this transgender influencer posted on Instagram, and
Speaker 2: they were like, well, North America's only once then have
Speaker 2: had volume with bud Light, it's not important. Well, I
Speaker 2: think they missed the point and they missed the opportunity
Speaker 2: to actually say, mere Copple, we got this wrong. We're
Speaker 2: going to talk to our core customers. And they have
Speaker 2: rolled out new advertising, but the damage has been done,
Speaker 2: and some equity analysts out there are saying, will they
Speaker 2: ever get back the market share that they've lost. Certainly
Speaker 2: with bud Light, they've alienated customers and that's a real
Speaker 2: problem for a consumer company.
Speaker 1: So one tweet loses them billions of dollars. The equity
Speaker 1: tanks the bonds could follow. Is it really as simple
Speaker 1: as that or was there anything else going on that
Speaker 1: you could attribute this move to.
Speaker 2: I think it's a polarization of society in America. I mean,
Speaker 2: I'm sitting in London and or we just see what
Speaker 2: we see and we're obviously not on the ground there.
Speaker 2: This has not affected their global sales. This has not
Speaker 2: had a knock on effect to the London, Paris Frankfort.
Speaker 2: You know, they're beers, which we don't drink a little
Speaker 2: budde over here. I must say sorry about that. But
Speaker 2: they own cellar Atoa, they owned bets, they own left
Speaker 2: they you know, this is a global portfolio of beers.
Speaker 2: It hasn't had a huge effect in South America, in Asia, Pacific,
Speaker 2: across Europe. This is a North America problem for the
Speaker 2: company and they have to address it. They literally have
Speaker 2: to come out and say this is what happened, this
Speaker 2: is how I fixing it. Sorry for the upset because
Speaker 2: people have boycotted this through social media and it's happening
Speaker 2: at the bars. They're having to repurchase beer that is
Speaker 2: expired because from their distributives, because the bars aren't taking it.
Speaker 2: They can't sell it. So people are walking into a
Speaker 2: bar where they would have ordered a bid light, they're
Speaker 2: going for anything but an abi beer, and that is
Speaker 2: a problem.
Speaker 1: It sounds like they're also a warning for other companies.
Speaker 1: I mean, there's lots of other consumer companies that you know,
Speaker 1: every time there's a special event or a commemoration or
Speaker 1: you know, it's Pride month this month. I mean, companies
Speaker 1: feel the need to make a statement on these things,
Speaker 1: on these issues. But then you're seeing this sort of
Speaker 1: backlash for for various reasons in the States. What's the strategy.
Speaker 1: What do other consumer companies do they just keep quiet
Speaker 1: or they you know, how do others learn from this?
Speaker 2: It's really hard joined because damned if you do, damned
Speaker 2: if you don't. I mean, my personal news feed is
Speaker 2: full of pride celebration, as you would expect for any
Speaker 2: whether you know, you get Mother's Day, you get fatherestay
Speaker 2: and the consumer companies roll out their advertising around that.
Speaker 2: And pride is huge because people celebrate, they get together
Speaker 2: with their friendship groups and they'll have a drink and
Speaker 2: that might be in a bud light, you know, you
Speaker 2: never know, but they have to read the room. They
Speaker 2: have to see when they do misstep that they've made
Speaker 2: a mistake and they have to address it. Like they
Speaker 2: were trying to target a very small part of the
Speaker 2: population and alienated a large part of the population who
Speaker 2: actually uses their product, who drinks their beer. It's a
Speaker 2: really tricky question and.
Speaker 1: They should have said sorry.
Speaker 2: They should have said sorry.
Speaker 1: Are there any other companies in this boat as far
Speaker 1: as you can see, Louise in terms of consumer stuff
Speaker 1: that you cover, well, I.
Speaker 2: Don't cover target, but they were in a similar situation
Speaker 2: in recent weeks with again with Pride, they had special
Speaker 2: filmsuits for people who are transitioning, and mums yelled foul
Speaker 2: and said, you're targeting to In fact, they were not
Speaker 2: targeting children. Sorry to use upon the company they aimed target.
Speaker 2: They were not aimed at children. They were adult sized,
Speaker 2: and they moved all their stock to the back of
Speaker 2: the store and some stores just pulled the merchandise altogether.
Speaker 2: So it's really hard when people are on a bandwagon.
Speaker 2: Do you swerve to your curve do you just avoid
Speaker 2: it all together? It's a really difficult one. But when
Speaker 2: you're in the business of selling a product, you are
Speaker 2: producing it. You have to sell you have to have
Speaker 2: the flow through of volumes or else you're having the
Speaker 2: shot shot down production. This is that's how serious it
Speaker 2: can get. If people don't take your product the end
Speaker 2: of the day, you have to consider what to do
Speaker 2: with that product. Do we continue to ship the manufacture
Speaker 2: volumes and ship the volumes that we have been It's
Speaker 2: not you don't move beer from North America to South America,
Speaker 2: you know, you just don't. You have local brands, and
Speaker 2: you make those brands where where the consumer will consume them,
Speaker 2: where they'll drink them. And if they're not actually you know,
Speaker 2: asking for ad a bud light, that's that's troublesome.
Speaker 1: And the Budweiser maker and Heiser Bush, that's they're still
Speaker 1: in trouble here. They're not out of the woods.
Speaker 2: Not yeah, I mean this has been going on, as
Speaker 2: I said, since the beginning of April, and where what's
Speaker 2: troublesome for me is that this is the peak summer
Speaker 2: season that we're invented, and so families get together, you
Speaker 2: get together with your friends that we can you have
Speaker 2: a barbecue, you go for a picnique, you have you know,
Speaker 2: a callerbox. What if you call it ESQ on Australian
Speaker 2: of beer, wine, whatever other things you like to consume.
Speaker 2: And if you're avoiding one brand, that's an issue. You know,
Speaker 2: people people might change their mind. But the social media
Speaker 2: over this is massive. I mean, I don't look at
Speaker 2: all this toff typically, but I did some research for
Speaker 2: this chat and it's it's just one way. It's there's
Speaker 2: a real.
Speaker 1: Polarization total mindfield. Amazing, Yeah, very very interesting.
Speaker 3: Thank you very much.
Speaker 1: Louise Parker of Bloomberg Intelligence. Read all your great analysis
Speaker 1: Louise on the Bloomberg Terminal. Do check it out and
Speaker 1: we hope to see you back on the show soon.
Speaker 1: And thanks again to Scott Carpenter from Bloomberg News. Read
Speaker 1: all of his great distress debt scoops and strut to
Speaker 1: finance scoops on the Terminal and at Bloomberg dot Com.
Speaker 1: I'm James Crombie. It's been a pleasure having you join
Speaker 1: us again next week on the Credit Edge.