I was watching some of the G7 (Group Of Seven) meetings of heads of State in Europe. Christiane Amanpour on Sky UK was interviewing Boris Johnson about Brexit. Doing a reasonably OK job for a left leaning Journo… but did constantly try to interrupt him and push him back to her talking point quesitions. Boris had none of it, so there was a lot of talking over each other.
A couple of key takeaways, though.
1) Boris made it clear that he had made it clear to the EU that “no deal” BREXIT meant the £ 39 Billion “divorce bill” stayed in the pocket of the UK. Boris knows how to let someone know why they care…
2) Boris made it clear that he didn’t see any horrific issues in a No Deal Brexit (as there wouldn’t be any – freedom is not an horrific issue…) Despite Christiane constantly trying to maneuver him around to saying their would be.
3) Project Fear is still the Go-To FUD in play. (Fear Uncertainty & Doubt – the strategy used by IBM for decades to keep customers from buying Amdahl, Hitachi and other “clones” of their mainframe computers – “Nobody ever got fired for buying IBM”. A strategy widely used in many industries now by many major players). In particular “Will there be shortages of food and medicine?” asked several times of Boris.
Just a little note to let you know that the USA, one of THE biggest (if not THE biggest) exporters of food to the world is more than willing, ready and happy to ship to you more food than your entire country could possibly eat. I mean, look at us: We’re a fat rotund lot who eats sandwiches called “Whoppers” and thinks a quart sized milk-shake is a “medium”. We’re drowning in the stuff. Really.
Now, you may also have noticed we’re having this little argument with China at the moment over their tendency to steal anything they can, use merchantilist tactics and policies to raid our economy, and suck out a few hundred $Billion / year via unfair trade practices. Now all sorts of folks have their panties in a bunch because they think this will cause a USA recession. Um, no. When you KEEP a few hundred $Billion more each year and keep your competitive technologies at home, that’s called “winning”.
Who will suffer? Well, the guy NOT getting that few hundred $Billion. China.
Now, in a real “cut off nose to spite face” moment, China is having some big big problems in the farming operations this year. Between some droughts and an Army Worm destroying their corn (maize) crops, they are way short of stuff to harvest. So what did they just do? They decided to cut off all food imports from the USA. Now you might think it incredibly stupid to reduce food imports right when your crops are failing, but that’s the Central Committee for you. Oh and they are slaughtering and burning most of their hogs to try to stop a rampant disease outbreak, so really short of pork.
Why does this matter for the UK?
This is an older article, but it has some useful information in it. This is from the first round of tariffs. Just to give a little bit of the idea of the size of things. While this talks about applying tariffs, remember that they have now said “No imports”. So all that food is looking for a place to land in the global marketplace. Note, too, that the $3 Billion is the “selected products”, i.e. a smaller part of the total food available.
China puts tariffs on $3B worth of selected US food exports
April 2, 2018
In retaliation for tariffs President Trump announced on Chinese steel and aluminum, some U.S. food products exported to China now face 25% or 15% tariffs, according to CBS News. On Monday, the Chinese started imposing the previously determined import taxes on 128 items, many of which are U.S. food and agriculture products.
Exported U.S. pork products will be hit with a 25% duty by China, while U.S. wine, fresh and dried fruit and nuts will be charged a 15% tariff. On China’s list of U.S. commodities to be taxed are apples, pears, oranges, cherries, strawberries, peaches, lemons, mandarins, plums, almonds, cashews, pistachios and walnuts, The Packer reported.
The targeted U.S. fruit and nut exports are worth $977 million, The Packer noted, while exports of U.S. pork and processed items have been valued at almost $2 billion.
So think a nice pork roast, all the vegetables, oranges, pears, cherries, strawberries, peaches nuts and what all you could possibly want would tide you over a ways? All washed down with some great (and low cost) California & Oregon wines…
The article is pushing the “both lose in a trade war” nonsense:
Both countries have plenty to lose in this ongoing dispute. According to an AP story in Time, China calculates that two-thirds, or about $275.8 billion, of its global trade surplus is with the U.S., while the U.S. trade deficit with China has hit a record $375.2 billion.
So let’s see, The USA is losing by $375 BILLION / year? So we GAIN by $375 BILLION / year if we just stop playing? OK…
See, that’s the lie hidden in the nonsense about trade wars and tariffs. It assumes you have equal and balanced free trade. When a Merchantilist and Currency Manipulator is predating on your industry and hollowing out your country and sucking dry your banks; well, it’s a big win to just say “No.” And Trump has. (You can get the same with the EU to about € 50 Billion if I recall your trade deficit with the rest of the EU (mostly Germany and mostly cars). That’s why the UK has all the cards in a “Brexit Deal”. You have an immediate £39 Billion kept in pocket and then another huge billions / year of money leaving the UK in abeyance while Germany decides how much it really wants to keep selling cars. All you need to do is buy some other cars while they decide to play ball.
According to Bloomberg, China is the No. 1 global pork consumer, one of the main buyers of U.S. agricultural products and the second-biggest market for pork by volume.
So think you can use some pork?
No worries, we have lots of it.
Talk about “bringing home the bacon”…
The article then goes on about dropping pork prices in China and all. That was before the hog disease outbreak there…
In the tree nut and fresh produce categories, China purchased $100 million in pistachios and $41 million in almonds last year, according to The Packer. while U.S. cherry exports were valued at more than $122 million, oranges at $48 million and apples at $18 million in 2017.
Like Pistachios? Almonds? Cherries? Oranges? Apples? We got ’em all. In abundance. Those numbers were just the exports to China. Total production is way way more than that.
Oh, and we also produce a lot of beef and lamb. Though honestly, I think you will find the Canadian grass fed beef is really good too. Oh, and remember back before you joined the EU? All that Australian Lamb and New Zealand lamb that came in at great prices? Guess what, they still grow it. It’s what I buy in our grocery store. They can grow better lamb, and ship it here, cheaper than our local folks. (California being crazy expensive and Australia / New Zealand being just one boat ride away).
So we’ll understand if you order up a few million New Zealand Leg-o-Lamb and Australian lamb chops.
It’s just sitting there. Waiting for you to get out from under the EU Thumb and place an order. Good tucker that.
“Food Shortages”? No way. Only if bureaucratically created from spite or stupidity.
About Those Medicines
So I know the NHS is not fond of the latest drugs and prefers generics. So lets look at those generic drug makers:
Based on financial numbers provided by Evaluate through 2016, these drug companies are leading the way in the generics marketplace.
Teva Pharmaceutical Industries
Reported revenues in 2016 were $9.8 billion. Teva regularly records more than $9 billion in sales and purchased the rights to Allergan’s generics division in 2015.
Where is Teva, you ask?
Teva Pharmaceutical Industries Ltd. (Hebrew: טבע תעשיות פרמצבטיות בע”מ) is an Israeli multinational pharmaceutical company headquartered in Petah Tikva, Israel. It specializes primarily in generic drugs, but other business interests include active pharmaceutical ingredients and, to a lesser extent, proprietary pharmaceuticals. It is the largest generic drug manufacturer in the world and one of the 15 largest pharmaceutical companies worldwide
Teva’s facilities are located in Israel, North America, Europe, Australia, and South America.
Um, gee, THE largest by far is not in the EU… Maybe you ought to just call them up and ask that they send a sales guy over…
You are likely getting a lot of your stuff from #2, Mylan. They are in the Netherlands. But they are not ONLY in the Netherlandsl
Reported $9.4 billion in revenue for 2016. In 2014, it took on a large part of Abbott Pharmaceutical’s business, purchasing the rights to more than 100 specialty and branded generic pharmaceuticals. Headquartered in the United States, it has more than 20,000 employees worldwide.
Mylan N.V. is a global generic and specialty pharmaceuticals company registered in the Netherlands, with principal executive offices in Hatfield, Hertfordshire, UK and a “Global Center” in Canonsburg, Pennsylvania, US. In 2007, Mylan acquired a controlling interest in India-based Matrix Laboratories Limited, a top producer of active pharmaceutical ingredients (APIs) for generic drugs, and the generics business of Germany-based Merck KGaA. Through these acquisitions, Mylan grew from the third-largest generic and pharmaceuticals company in the United States to the second-largest generic and specialty pharmaceuticals company in the world.
So maybe they will ship from the USA, or India, or maybe even in your own UK locations. Do you really care?
Sandoz, the generics division of Novartis
Reported $9 billion in revenue in 2016. Sandoz employs more than 25,000 employees worldwide and runs 30 manufacturing sites.
Before the 1996 merger with Ciba-Geigy to form Novartis, Sandoz Pharmaceuticals (Sandoz AG) was a pharmaceutical company headquartered in Basel, Switzerland (as was Ciba-Geigy),
Note that Sandoz is now merged into Novartis:
Novartis International AG is a Swiss multinational pharmaceutical company based in Basel, Switzerland. It is one of the largest pharmaceutical companies by both market capitalization and sales.
Now I’m no expert on the EU, but last time I looked Switzerland was not a member of the EU. They are a member of the European trade association but not a Member State of the EU and do trade with lots of other countries.
The European Union is Switzerland’s largest trading partner, and Switzerland is the EU’s third largest trading partner, after the U.S. and China. Switzerland accounts for 5.2% of the EU’s imports; mainly chemicals, medicinal products, machinery, instruments and time pieces. In terms of services, the EU’s exports to Switzerland amounted to €67.0 billion in 2008 while imports from Switzerland stood at €47.2 billion.
Switzerland signed a free-trade agreement with the then European Economic Community in 1972, which entered into force in 1973.
Switzerland is a member of the European Free Trade Association (EFTA), and took part in negotiating the European Economic Area (EEA) agreement with the European Union. It signed the agreement on 2 May 1992, and submitted an application for accession to the EU on 20 May 1992. However, after a Swiss referendum held on 6 December 1992 rejected EEA membership by 50.3% to 49.7%, the Swiss government decided to suspend negotiations for EU membership until further notice. These did not resume and in 2016, Switzerland formally withdrew its application for EU membership.
In 1994, Switzerland and the EU started negotiations about a special relationship outside the EEA. Switzerland wanted to safeguard the economic integration with the EU that the EEA treaty would have permitted, while purging the relationship of the points of contention that had led to the people rejecting the referendum. Swiss politicians stressed the bilateral nature of these negotiations, where negotiations were conducted between two equal partners and not between 16, 26, 28 or 29, as is the case for EU treaty negotiations.
So it looks to me like the Swiss are free to trade with a free and independent UK Just Fine. Not seeing any reason their drugs would be in short supply.
So who’s next on the list?
Reported $4.5 billion in revenue in 2016. Best known for developing Viagra, Pfizer even began selling its own generic version of the drug when its patent expired in 2017.
That would be “Us”, collectively. USA / UK. A US company that was bought by a UK company.
Pfizer Inc. (/ˈfaɪzər/) is an American multinational pharmaceutical corporation headquartered in New York City, with its research headquarters in Groton, Connecticut. It is one of the world’s largest pharmaceutical companies. It is listed on the New York Stock Exchange, and its shares have been a component of the Dow Jones Industrial Average since 2004. Pfizer ranked No. 57 on the 2018 Fortune 500 list of the largest United States corporations by total revenue.
On December 19, 2018, Pfizer announced a joint merger of their consumer healthcare division with UK pharma giant GlaxoSmithKline; the British company will maintain a controlling share (listed at 68%).
Somehow I can’t help but think that you will sell drugs to you…
But who knows. Maybe you want a lower cost supplier.
Sun Pharmaceutical Industries
Reported $3.6 billion in revenue in 2016 and saw a 68 percent increase in drug revenue, due in large part to its $4 billion buyout of rival Ranbaxy Laboratories. The purchase added $2 billion in revenue and solidified Sun as a leader in the generic marketplace. Sun has more than 30,000 employees.
Sun Pharmaceutical Industries Limited (NSE: SUNPHARMA, BSE: 524715) is an Indian multinational pharmaceutical company headquartered in Mumbai, Maharashtra that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily in India and the United States. The company offers formulations in various therapeutic areas, such as cardiology, psychiatry, neurology, gastroenterology and diabetology. It also provides APIs such as warfarin, carbamazepine, etodolac, and clorazepate, as well as anti-cancers, steroids, peptides, sex hormones, and controlled substances.
So, you do remember The Commonwealth, don’t you? Still here. Waiting. Patiently.
Reported $2.8 billion in revenue in 2016. The Canadian company focuses on technologies for infusions, transfusions, and parenteral (intravenous) nutrition.
Reported $2.5 billion in revenue in 2016. Its generics division is Par Pharmaceuticals, with PAR standing for “People Achieving Results.” The company began in 1997 after acquiring rights and assets from the DuPont Merck Pharmaceutical Company.
Endo is an interesting one. Inside the EU but…
Endo International plc is an Irish–tax registered generics and specialty branded pharmaceutical company that generated over 93% of 2017 sales from the U.S. healthcare system. While Endo’s management, operations, and customers are almost exclusively U.S.–based, in 2013 Endo executed a corporate tax inversion to Ireland to avoid U.S. corporate taxes on their U.S. drug sales, and to avail of Ireland’s corporate tax system.
I know, you don’t likely get anything from them at present. But if needed, they seem quite happy to sell to the USA outside of the EU umbrella…
I’m not going through all the rest. Just bolding a few bits. You can look them up if needed. Just realize the rest of the world makes, and buys, and sells drugs, too. It isn’t all just EU sourced. In fact, so far, the EU has been remarkably scarce on this list. The next one, Lupin, is in Mumbai, India while Dr. Reddy’s is in Hyderabad. Sanofi is French, but where are we on the list? Less than Lupin?
Reported $2.5 billion in revenue in 2016. Lupin entered the generics market in 2003 with the antibacterial drug Cefuroxime Axetil. As of 2018, Lupin produces more than 75 generic drugs.
Reported $2 billion in revenue in 2016. Operates worldwide generic brands Zentiva, Medley, Genfar, Winthrop, and Globalpharma.
Reported $2 billion in revenue in 2016. As one of the few pharmaceutical companies based in South Africa, it has seen growth by focusing on emerging markets in Asia. It continues to look for companies to acquire to add to its portfolio of medications.
Reported $1.8 billion in revenue in 2016. Aurobindo has seen considerable growth in recent years and opened a 565,000-square-foot, fully automated state-of-the-art distribution center in East Windsor, New Jersey, in 2017.
Dr. Reddy’s Laboratories
Reported $1.8 billion in revenue in 2016. Dr. Reddy’s was founded by Dr. Anji Reddy in 1984 when he acquired Cheminor Drugs.
Reported $1.6 billion in revenue in 2016. Based in India, Cipla also has a strong presence in the U.S. and South Africa.
Reported $1.6 billion in revenue in 2016. Apotex is the single largest investor in research and development of any pharmaceutical company in Canada—brand or generic, according to its website. It has more than 1,100 active research and development projects in 50 countries. Since 2008, Apotex has invested $1 billion in research and development, with an additional $2 billion planned through 2028. It exports to more than 115 countries and territories and operates in more than 45 countries, primarily in the U.S., Mexico, and India.
Apotex Inc. is a Canadian pharmaceutical corporation. Founded in 1974 by Barry Sherman, the company is the largest producer of generic drugs in Canada, with sales exceeding CAD$1 billion per year.
How many on that list are English Speaking Countries with a long history of doing business with the UK? How many are just waiting for you to be free to place orders? How many are in Commonwealth Countries?
Drug shortages? No way. Only if the NHS is too slow and stupid to ring up the sales staff from the above suppliers and ask for a quote…
“Food & Medicine Shortages” is just FUD, all the way down.