Disputed French bill on GM crops to make come-back

Reuters: [2008-05-14 21:00:00]

By Emile Picy

PARIS, May 14 (Reuters) - A French bill on genetically modified crops will be re-submitted to parliament unchanged, a committee said on Wednesday, a day after it was blocked by legislators in an embarrassment for President Nicolas Sarkozy.

The ruling UMP party is divided over the bill, which would regulate the cultivation of GM crops in France. Pro-GM members believe it is too restrictive, while antis say it is too lax.

Under a technical procedure, a legislative committee convened after Tuesday's blockage and said the text would be re-submitted for a vote by each of the chambers, the lower National Assembly and the upper Senate.

Many UMP legislators were absent from the National Assembly on Tuesday during a debate that was supposed to result in a positive vote. In their absence, the chamber passed a technical objection -- by a single vote -- which blocked the text.

The opposition Socialists and environmental campaigners expressed jubilation and called for a complete overhaul of the bill, which they say is too favourable to the interests of biotech companies such as U.S. giant Monsanto.

But the government minimised the setback and said it should not detract from important legislative work on GM crops.

"Yesterday's regrettable incident will not divert the government from its responsibilities," Prime Minister Francois Fillon told parliament on Wednesday, defending the bill and vowing it would pass into law.

SETBACK

The setback in the Assembly was widely interpreted as a humiliation for Sarkozy, a week after he hosted UMP legislators at his Elysee Palace for a meeting aimed at reinforcing unity between the executive and the increasingly restive legislature.

Party morale has been low because of Sarkozy's opinion poll slump and the UMP's heavy defeat in municipal elections in March, and the president's pep talk was supposed to reinvigorate the troops.

Instead, the GM bill left the government red-faced and revealed deep cracks within the ruling majority.

As well as causing trouble for the government, the GM bill has drawn criticism from a wide spectrum of interest groups on both sides of the debate.

Environmentalists say it blurs the line between natural and GM foods to the detriment of farmers and consumers, while advocates of GM crops say it does not go far enough in protecting biotech companies from sabotage.

Opinion polls show a vast majority of French people are opposed to GM crops because they have not seen enough proof that such crops pose no risk to consumers and the environment.

Campaign group France Nature Environnement criticised the decision to re-submit the bill unchanged, saying legislators had lost a golden opportunity to take into account the disquiet about the bill and work on an improved version. (Writing by Estelle Shirbon) ((estelle.shirbon@reuters.com, +33 1 4949 5342, Reuters Messaging: estelle.shirbon.reuters.com@reuters.net))

Keywords: FRANCE GMO/

Unilever says new milkshake helps control appetite

Reuters: [2008-05-14 18:09:00]

By Michael Kahn

GENEVA, May 14 (Reuters) - A new weight loss drink that tastes like a milkshake significantly reduces appetite and could soon join Unilever's <ULVR.L> <UNc.AS> $400 million Slim-Fast weight-loss brand, the company's researchers said on Wednesday.

A study showed that the drink, which works by trapping gas in foods to make people feel full, worked even better than the company's Slim-Fast weight-loss drink, they said.

The researchers, who presented their findings at the 2008 European Congress on Obesity, said the company has patented the technology.

"The technology is now available for the brand to use in future formats," said David Mela, a Unilever nutritionist who worked on the study. "The food maintains the bulk, much of which is air that helps you maintain that full feeling."

Obesity is a big problem and big business. About 400 million people are classified as obese, putting them at higher risk of diseases like type 2 diabetes and heart diseases, according to the World Health Organisation.

This has in part spurred companies like Unilever, Kraft Foods <KFT.N>, General Mills <GIS.N>, Sara Lee <SLE.N> and others to turn to healthier products with a whole range of so-called health and wellness foods.

"If you look at western populations, a (large number) of adults are overweight," said Gert Meijer, an executive at Unilever's research and development division. "In terms of the amount of people who might be interested in this product, it could be huge."

In the Unilever study, the researchers tested their milkshake on 24 volunteers who were given either the new drink or a serving of regular Slim-Fast at breakfast.

People who had the milkshake reported that they were significantly fuller when asked at different intervals over a four-hour time period. The researchers found that a half-sized serving of the milkshake also supressed hunger.

"We are clearly talking about hours," said Sergei Melnikov, a physical chemist who helped develop the technology. "It is an effect that lasts for an hour or two or longer."

The milkshake is designed to trap gas in the food after consumption, preventing it from dissolving in the mouth as happens with foods like whipped cream, and cutting appetite.

To do this the team engineered the fats, proteins and fibres in the food until reaching the right mix to trap the gas -- a technology that might appear in other Unilever foods, the researchers said.

"I would say this is not limited to liquids," Melnikov said. "It could be used in other food forms."

(Editing by Elizabeth Fullerton) ((michael.kahn@reuters.com; +44 20 7542 0823; Reuters Messaging; michael.kahn.reuters.com@reuters.net))

Keywords: UNILEVER OBESITY/

UPDATE 2-DuPont, Danisco link up on new ethanol technology

Reuters: [2008-05-14 17:30:00]

(Recasts, adds details on JV, new DuPont CEO comment)

By Euan Rocha

NEW YORK, May 14 (Reuters) - DuPont Co <DD.N> and Genencor, a unit of Denmark's Danisco <DCO.CO>, said on Wednesday they will form a joint venture to develop a process to produce ethanol that does not rely on food crops.

The 50-50 partnership, which aims to produce commercial-scale volumes of cellulosic ethanol by 2012, represents a bid by two of the sector leaders to wean ethanol off its dependence on corn amid growing criticism of using foodstocks for fuel.

Corn prices in the United States have been hovering at record levels, boosted by forecasts that as much as one-third of this year's crop will go toward production of ethanol.

The cost of producing cellulosic ethanol is still much higher than making corn-based ethanol, and several U.S. companies are in a race to drive down the costs making the fuel.

The 50-50 joint venture, to be called DuPont Danisco Cellulosic Ethanol LLC, will link DuPont's cellulosic pre-treatment and fermentation technologies with Genencor's enzymes to develop the ethanol production process.

"The collective pulling of our two companies together I think makes us the clear leader," Charles Holliday, DuPont's chairman and chief executive officer, told a conference call. "That's why we're so confident we're going to be the winner with the lowest costs."

Cellulosic ethanol has the same properties as corn-based ethanol but can be derived from the nonedible parts of a corn plant, rather than the corn kernels that are the traditional source of domestic ethanol production.

Moreover, sugar cane bagasse, wood shavings, switch grass and other such materials can also be harnessed to produce ethanol.

The partners plan an initial three-year investment of $140 million, which will initially target corn stover and sugar cane bagasse as raw materials. The companies plans to use other forms of cellulosic raw materials further down the line.

Both DuPont and Danisco will license their combined existing intellectual property and patents related to cellulosic ethanol.

The global joint venture expects its first pilot plant to be operational in the United States in 2009, and its first commercial-scale demonstration facility to be operational within the next three years.

The joint venture would be headquartered in the United States and would be formed after receipt of required regulatory approvals. (Additional reporting by Matt Daily, editing by Gerald E. McCormick and Dave Zimmerman) ((euan.rocha@thomsonreuters.com; +1 646 223 6026; Reuters Messaging: euan.rocha.reuters.com@reuters.net)) Keywords: DUPONT/ETHANOL

ANALYSIS-Costly living could kill Europe's consumer revival

Reuters: [2008-05-14 15:19:00]

By Brian Love, European Economics Correspondent

PARIS, May 14 (Reuters) - After a few years of brisk growth and job creation, Europeans were supposed to feel more secure and start to spend more, reviving consumer demand in the region and reducing its economic dependence on exports.

Nice theory -- shame about the surge in the cost of fuel, food and other things people buy before they see what is left to save or spend on life's luxuries, their discretionary budget.

A vendor at Paris's Bastille market provided a striking example of one luxury moving further out of reach of shoppers a few weeks ago when he raised the price for specialty Bresse chickens by 25 percent, to 20 euros or roughly $30 each.

But apart from the scale of the rise, what the vendor did is no different from what companies are doing across Europe with necessities and luxuries alike -- making consumers pay the bill for soaring raw materials costs, in turn caused by the rising price of industrial and agricultural commodities worldwide.

Companies such as Nestle and Unilever, whose branded produce goes into the kitchens, bathrooms and cleaning-cupboards of most homes in Europe, raised prices last year to offset surges in raw material costs, and the same tactics apply for the rest of this year, according to recent declarations from the firms.

How long they can avoid taking some of the hit themselves at the profit-line is anybody's guess, although Nestle <NESN.VX> hopes the pressure will start to ease later this year. So do politicians although some fear wage demands might spiral out of control and further fuel inflation, as happened in the 1970s.

Belgian supermarket group Delhaize <DELB.BR> says it is beefing up its offer of own-label goods to cater to budget-conscious customers as competition intensifies with no-frills hard-discounters.

Carrefour <CARR.PA>, the world's second-biggest hypermarket group by stock market value after Wal-Mart, says many of the price rises it sees are for things other than the foodstuffs that tend to dominate the headlines.

HARD TIMES

In any case, rising everyday costs are squeezing households and compromising the consumer spending revival economists have been predicting for some time now.

Disposable incomes will shrink this year for the first time in a decade in the euro zone, economists at UBS bank predict.

Germany, Italy and Spain could be the worst-hit, according to UBS chief European economist Stephane Deo and colleagues.

Indeed, monthly retail sale surveys, although not considered the final word, reveal tentative signs of damage already.

Retail sales dropped for a second month running in March in the euro zone, according to the EU statistics office, Eurostat. They also slumped in Britain in April, according to the Confederation of British Industry.

Marco Annunziata, economist at UniCredit bank, said what is more troubling is the price rises go hand-in-hand with slowdowns in housing markets in some countries and the crisis in financial markets that is making banks idreluctant to extend credit.

"In Europe, we had just reached the stage where we expected consumers to take up the baton and replace exports as the engine of growth," he said.

"Instead, consumers have been hit first by a depressing daily flow of news about the (markets) crisis, then by lower equity and house prices, and finally by the incessant rise in food and fuel price."

European economic growth, or gross domestic product, staged a significant acceleration in 2006, when GDP in the euro zone rose 2.8 percent, followed by 2.6 percent in 2007, way more than the average of the preceding five years.

But much of the pickup was driven by company investment and exports, while consumption grew at a softer pace of 1.9 percent in each of the two years.

PASSING THE BUCK

Whatever the more official indicators show, companies seem to be counting for the moment on the belief that price inflation in oil, food and industrial commodities will ease, and with it the conflict between profit protection and consumer demand.

The European Commission last month predicted that euro zone inflation would jump more than forecast to 3.2 percent this year but ease to 2.2 percent in 2009.

Germany's position as the world's top exporter has for years helped its economy to cope while demand from its own consumers remained depressed.

Consumption, according to national accounts, has barely been positive in the last five years with the exception of 2006, when a 0.9 percent rise -- half the average rise in the euro zone as a whole that year -- raised hopes of a renaissance.

Unilever <ULVR.L>, the consumer goods giant that produces Lipton tea, Domestos bleach and Flora margarine, said last week that sales volumes in Western Europe more or less stagnated in the first three months of 2008, and shrank in Germany.

The year had not got off to a good start in Germany, company executives told investment analysts in a conference call after the publication of the group's first-quarter results.

While the German central bank measure of retail sales showed a fourth monthly increase in March, of 0.2 percent, that measure showed sales actually shrank marginally once cars and sales at car-fuelling stations were stripped out.

In Germany, and much of the rest of Europe, drivers have to spend 40 to 50 percent more now to fill their fuel tanks than at the start of 2002, according to the latest survey data published by Britain's Automobile Association.

Unleaded petrol cost an average 0.94 euros per litre back in January 2002 in Germany, and 1.43 euros in April 2008, AA data show. The picture is much the same across the continent.

That is a price that has been steadily rising for years and is not just of the temporary kind that many forecasters hope will be the case for other items of everyday life.

If Annunziata at UniCredit is right, the chances of revival in consumer demand are even further compromised by slowdowns in housing markets, primarily in places such as Spain, Ireland and Britain, but France too to an extent.

The blow so far is nothing as bad as the U.S. housing slump and subprime mortgage market meltdown which have reduced growth to a trickle in the world's biggest economy.

Pending more definitive evidence on the trend and above all the scale of housing market downturns in Europe, there are some tentative signs that banks are becoming less willing to provide credit, as they themselves feel the pinch from a squeeze in the financial markets where they get short-term funding.

According to the latest survey by the European Central Bank, commercial banks which were falling over each other to grant home purchase loans in several European countries not so long ago are getting more stringent.

Jennifer McKeown at London-based Capital Economics says it's too early though to rule out consumer spending as a source of economic dynamism, noting that retail sales have in fact risen in total value, if not in volume, in recent months, and that inflation should soon start to recede.

However, she conceded that a rise in total value of retail sales probably means consumers are paying more to obtain less.

"Indeed, if inflation remains at or close to recent high rates, it might not be long before households are forced to cut back on discretionary spending in order to pay bills or buy food," she said. (Editing by Stephen Nisbet) ((brian.love@reuters.com; +33 1 49495339; Reuters Messaging brian.love@reuters.com@reuters.net))

Keywords: ECONOMY EUROPE/CONSUMERS

Italian Stocks - Factors to watch on May 14

Reuters: [2008-05-14 08:07:00]

    MILAN, May 14 (Reuters) - The following factors could affect 
Italian markets on Wednesday. 
    Reuters has not verified the newspaper reports, and cannot 
vouch for their accuracy. New items are marked with (*). 
     
    * ENEL <ENEI.MI> 
    Italian power company Enel SpA posted first-quarter core 
profit of 3.445 billion euros on Wednesday, up 47.7 percent from 
the year before. 
    For a story click on [MAT008190] 
     
    * MARAZZI <MRZ.MI> 
    The key shareholder in the ceramic producer launched on 
Tuesday a buyout offer at 7.15 euros per share with the aim of 
delisting the company, Corriere della Sera reports. 
     
    ALITALIA <AZPIa.MI> 
    The near-bankrupt carrier posted a wider quarterly loss on 
Tuesday and warned it could not sustain the damage from higher 
oil prices and uncertainty over its fate much longer. 
    For a story click on [nL13766589] 
     
    MEDIASET <MS.MI> 
    The broadcaster owned by Prime Minister Silvio Berlusconi 
reported a 2.8 percent drop in first-quarter net profit to 121 
million euros on Tuesday, in line with expectations, as 
amortisations weighed down results. 
    For a story click on [nL13641249] 
     
    BANCA POPOLARE DI MILANO <PMII.MI> 
    The cooperative lender turned in a 45 percent fall in 
first-quarter net profit to 62.1 million euros on lower 
investment banking revenue on Tuesday. 
    For a story click on [nL12870481] 
     
    UBI BANCA <UBI.MI> 
    The bank turned in a 13.4 percent rise in first quarter net 
profit.  
    For a story click on [nL1460733] 
     
    COMPANY RESULTS 
    Among companies reporting first-quarter results on Wednesday 
are: Benetton <BNG.MI>, Parmalat <PLT.MI>, Tod's <TOD.MI> and 
Banca Italease <BIL.MI>. 
     
 ((Milan newsroom, +39 02 6612 9507, fax +39 02 801149, 
milan.newsroom@news.reuters.com)) 
     
    For Italian market data and news, click on codes in 
brackets: 
    20 biggest gainers (in percentage)............<.PG.MI> 
    20 biggest losers (in percentage).............<.PL.MI> 
    Mibtel index.......... <.MIBTEL> 
    S&P/Mib index......... <.SPMIB> 
    Indice Mib-30......... <.MIB30> 
    Midex index........... <.MIDEX> 
    Allstars index........ <.ALLST> 
    Block trades.......... <.BLK.MI> 
    Stories on Italy...... <IT-LEN> 
     
    For pan-European market data and news, click on codes in 
 brackets: 
    European Equities speed guide...................<EUR/EQUITY> 
    FTSEurofirst 300 index..............................<.FTEU3> 
    DJ STOXX index......................................<.STOXX> 
    Top 10 STOXX sectors...........................<.PGL.STOXXS> 
    Top 10 EUROSTOXX sectors......................<.PGL.STOXXES> 
    Top 10 Eurofirst 300 sectors...................<.PGL.FTEU3S> 
    Top 25 European pct gainers.......................<.PG.PEUR> 
    Top 25 European pct losers........................<.PL.PEUR> 
     
    Main stock markets: 
    Dow Jones...............<.DJI>  Wall Street report .....[.N] 
    Nikkei 225.............<.N225>  Tokyo report............[.T] 
    FTSE 100...............<.FTSE>  London report...........[.L] 
    Xetra DAX.............<.GDAXI>  Frankfurt market stories[.F] 
    CAC-40.................<.FCHI>  Paris market stories...[.PA] 
    World Indices.....................................<0#.INDEX> 
    Reuters survey of world bourse outlook.........<EQUITYPOLL1> 
    Western European IPO diary..........................<WEUIPO> 
    European Asset Allocation........................[EUR/ASSET] 
    Reuters News at a Glance: Equities...............[TOP/EQE] 
    Main currency report:...............................[FRX/] 
      Keywords: ITALY MARKETS/FACTORS =3 MILAN