Wednesday 30 January 2013

ICELAND (2)

Some two years ago, Iceland's voters decided in a referendum not to compensate British and Dutch depositors in Icesave, an offshore internet bank that offered high deposit rates until it crashed and burned. Icelandic depositors were compensated, foreigners could go hang.

At the time, I didn't think that this was such a good move, not least because the U.K. and Holland would be taking Iceland to the EFTA Court, and the consensus was that they would win. In part because the Icelandic Government's decision to nationalise Icesave's parent, but do nothing for the foreigners, was discriminatory, a key taboo in both EFTA and E.U. law.

Somewhat surprisingly, however, the Court has now decided in favour of Iceland, a judgment which can not be appealed. This has two consequences. The first, a big short-term boost for Iceland, is that it gets out of paying some Euro4 billion, which presumably has raised cheers in Rejkjavik. The second, whose main ramifications are for the longer term, is that it shows just how difficult it is to regulate international financial institutions, particularly those that are in trouble. European politicians wishing to strengthen E.U.-wide bank supervision will use this judgment to bolster their case.

Walter Blotscher

Tuesday 29 January 2013

HOME COURT ADVANTAGE

The Danes think that they are pretty good at handball; and indeed they are. The men's team are the current European champions, probably the hardest tournament to win, and won silver in the World Championships two years ago in Malmø. True, they had a disappointing Olympics, losing to Sweden when they should have won. But expectations were high on Sunday when they again reached the final of the World Championships, this time in Spain, after cruising through the previous rounds. One reason was the fact that their opponents were the host nation, whom Denmark had beaten five times in a row since 2007 in major tournaments. If ever there was a time for Denmark to win the World Championships for the first time, then this was it.

They lost. And not just lost, but got absolutely and comprehensively stuffed. It was 18-10 to Spain at half-time and 29-12 after 45 minutes, by which time the contest was over. The end result of 35-19 was the biggest difference ever in a world final, and only one goal short of Denmark's biggest ever defeat in any competition. Losing by almost two goals to one is the sort of thing Great Britain handball might expect to suffer, but not Denmark.

How did it happen? Watching the match as a fairly neutral observer, I put it down to that often underrated factor, namely playing on home turf. The Spanish were up for it, to put it mildly. As in Serbia, an even lowlier handball nation that made the final of the European Championships in Belgrade last year, the crowd were partisan, and very loud. Denmark were simply blown away.

There is now a lot of navel gazing going on over here. National pride has been dented, something must be done. As it happens, next year's European Championships will take place in Denmark. If the crowd get behind them, then the Danes should win.

Walter Blotscher

Monday 28 January 2013

LEAVING HOME (6)

I put my daughter on the train to Copenhagen this morning. She is going off to India and Nepal for three and a half months. She will be writing a blog, There and Back Again; the link is below.

So all of my children have grown up and left home. One of my sons will be here for a while, but only until he finds a place to live in the city. And that will be that.

Walter Blotscher




Sunday 27 January 2013

PAYING FOR CRIME

As I said in an earlier post, living in a foreign country sometimes throws up surprises. I had always thought Denmark to be a fairly liberal sort of place; so it was a shock to find out about the following.

People convicted of a crime here have to reimburse the authorities for the cost of the prosecution. Not the direct expenses of the police or the public prosecutor, but those of pretty much everything else; defence lawyers (there is no concept of the Public Defender, who advises people who have no money), medical examinations, technical and financial investigations, and so on. Some of these can be very expensive. Apparently, this financial burden is one of the highest in Europe.

The job of collecting these monies has been given to the tax authorities. According to them, some 60,000 people owed some Kr.2 billion at the end of 2012.  

What constitutes a crime varies from country to country and is decided by society as a whole (via its legislative representatives). As such, prosecuting a crime is the ultimate "public good"; society pays for such prosecution, and dictates possible fines and/or imprisonment, in order to show its collective disapproval of the behaviour in question. Against that background, forcing people to pay for the decision to give punishment as well as undergoing the punishment itself, strikes me as morally wrong.

More prosaically, it also strikes me as short-sighted in the extreme. Because one of the consequences is that people leaving prison after serving their sentence are often crippled by having to service a large debt; indeed, the greater the crime and the longer the sentence, the bigger the likely bill. A prisoner, having paid his or her debt to society and wishing to make a fresh start, is merely allowed the opportunity to start paying to the state. And at a time of their lives when they are least likely to have either assets or job prospects. Seen in that light, is it surprising that so many of them take up a life of crime again?

This was a disappointing discovery.

Walter Blotscher

Saturday 26 January 2013

DANISH BANKS (4)

In an earlier post, I criticised the new strategic plan of Danske Bank, Denmark's largest. The essence of this seemed - to me, at least - to be to replace people with machines and the internet, which I didn't think would be good for customer relations. My son disagreed with me on this, but the Danish general public apparently agree; Danske Bank's popularity is in freefall at the moment.

Their latest move is not going to change that. Since 9 January, 131 of the bank's 186 branches in Denmark have stopped providing teller services. On Fünen, where I and roughly 500,000 other people live, there will only be four such branches that do; two in Odense, one in Svendborg and one in Nyborg. So, if I were a Danske Bank customer, I would have to travel at least 33km and then park before I could get (my own) cash out of a branch as opposed to an ATM. In other parts of the country - West Jutland, for instance - it would be twice as far. And when I got there, it would cost me kr.40 to do so, unless I had kr.750.000 in the bank (which most people don't).

A necessary change in order to return the bank to profitability, say its leaders. I have no problem with that idea in principle; the problem is that Danske Bank's catastrophic lack of profitability during the financial crisis - one estimate has put the cost of the past five years at more than kr.90 billion - had nothing to do with teller services in branches and everything with terrible investment decisions (in Ireland and elsewhere). Secondly, although my son is surely right in saying that internet banking is the way of the future, there are still many people, particularly older people, who don't like machines, don't know how to use computers, or wouldn't trust the internet to do financial transactions. What is particularly relevant is that these people tend to be savers, whose mortgages have been fully paid off, and who therefore tend to provide a cheap and stable mass of deposits, the bread and butter funding source of any bank. Alienating them, which Danske Bank has done in spades, doesn't strike me as very sensible.

It is undoubtedly the case that Denmark has too many banks, and that further consolidation is both necessary and likely (Sparekassen Lolland was taken over by Jyske Bank only yesterday, for instance). But the sector should be wary of emulating the British experience, where there are only a few, monster-size, institutions in which customers can't talk to a human, unless it is from a call centre in Bangalore. After all, every business needs customers, even a bank.

Walter Blotscher

Friday 25 January 2013

JAGTEN

Jagten ("the Hunt") is the film currently being shown at the local cinema. It's been a great critical success, with Mads Mikkelsen winning the best actor award at last year's Cannes festival. It's a very good film.

Mikkelsen plays Lukas, a divorced teacher in a small rural community, who gets assigned to help out in the kindergarten when the local secondary school closes. All the children love Lukas, who is the only male amongst the staff, and who engages in a lot of physical rough and tumble with them. One of the children, Clara, is the daughter of Lukas' best friend, and has a crush on him. When he gently rebuffs the heart she has made for him as a Christmas present, she tells the kindergarten leader that Lukas has exposed himself to her. The leader's repressed fantasies run wild, and soon Lukas is being accused of all sorts of indecencies against children, despite his having recently embarked on an affair with the kindergarten's Eastern European cleaner. In succession, he loses his job, is arrested by the police, and is shunned by the community.

Jagten refers to the deer hunts, which Lukas has done with his friends from the village since he was a boy. But it also refers to the witchhunt against him that becomes increasingly irrational and violent. With one exception, his hunting friends all disown him, he gets beaten up in the supermarket, his dog is killed. Even when the police case against him collapses - the children have all sworn to terrible things taking place in the cellar of his house, which doesn't have one - people are unwilling to believe his innocence. Only when Clara finally admits that she has made the whole thing up does it stop. Though the ending leaves that statement somewhat in doubt; do such things ever stop?

Not only is Jagten a very good film, but it is bringing in the punters. There were 75 paying customers in the cinema on a very cold Thursday evening. It bodes well for our refurbishment project later in the year.

Walter Blotscher

Thursday 24 January 2013

DISAPPOINTED EXPECTATIONS

Apple's share price has fallen by 30% since last September, and is still wobbly. Apparently, the revenue figures it has just released were "dismal".

Dismal? Hang on a minute. Revenues in the three months to the end of December 2012 were US$54.5 billion, up 18% from a year previously; net profit was US$13.1 billion. In these tough economic times, nearly all companies would die for revenue growth greater than zero; and die even more for a net margin of close to 25%. Let alone a cash pile of some US$137 billion.

But this is Apple. Although it sold 47.8 million iPhones in the quarter, up from 37 million in the same quarter the previous year, and 22.9 million iPads, up from 15.4 million, analysts were expecting even higher numbers.

Some people are never satisfied.

Update: the fall in Apple's share price over the past couple of days means that it has lost its ranking (to Exxon Mobil) as the world's most valuable traded company. At Friday's close Exxon Mobil was worth US$418 billion, Apple US$413 billion.

Walter Blotscher

Wednesday 23 January 2013

THIS BLESSED PLOT (2)

This week's edition of the Economist newspaper reviewed a memoir by David Hannay, a career diplomat who was at various times the U.K.'s Ambassador to both the European Union and the United Nations. As such, he saw at first hand both how Britain is viewed by the rest of the world, and how so much of that view stems from the fact that it is an integral part of  an economic and political grouping that is bigger than itself, rather than a smallish island nation on the edge of a continent.

His view, with which I agree (see my earlier post), is that the U.K.'s two biggest foreign policy mistakes of the second half of the twentieth century were Suez and the failure to be involved in the E.U. from the start. Judging from David Cameron's long-awaited speech on Europe today, it seems clear that the Prime Minister has not read Lord Hannay's book. Everything points to Britain's making a foreign policy mistake of similar proportions in the first part of the twenty first century.

On the surface, the offer in Mr. Cameron's speech was beguiling. Britain will renegotiate a new relationship with the E.U. based on five principles; an emphasis on the single market, flexibility (which means letting more countries have more opt-outs from common projects, and removing the call for an "ever closer union" from the E.U.'s treaties), subsidiarity, democratic accountability, and fairness (meaning that if the U.K. stays out of common projects, such as the Euro, then it won't be disadvantaged by those common projects). That new relationship will then be put to a referendum in the next Parliament, and at the latest by 2018. The British electorate will then vote either to stay in on the new terms, or to leave. Mr. Cameron will campaign actively for a yes.

Some of the speech was positive, notably his trashing of the so-called Norway and Switzerland options. Yet there are huge problems involved. The biggest is a complete lack of recognition that the E.U. as it has evolved is a complex set of compromises involving 27 countries (and more in the future, starting with Croatia), all of whom have domestic electorates and all of whom seek to promote their national interests. No country is completely happy with the end result, but all accept it, since they recognise that no other country is completely happy either. But as soon as one country tries to unpick that fundamental compromise, it opens up a Pandora's Box where other countries try exactly the same tactics. Denmark is a Eurosceptic member of the E.U., with more opt-outs (four) than the U.K. has. Yet the Danish Prime Minister's initial reaction to the speech was that it was not a good idea; what matters at the moment is working together, not working one against the rest.

Mr. Cameron said that the E.U. would be willing to negotiate, and accept changes, since it would be the only way of addressing the E.U.'s fundamental current and future lack of competitiveness. This is (yet) another example of the Brits telling the pesky continentals what is best for them; I am not sure that Germany (for instance) thinks that it is uncompetitive relative to the U.K., despite having the Euro as a currency. Mr. Cameron pointed to areas where he has negotiated before as evidence that it is possible to get changes that suit the U.K. Yet those changes took place at a time when the E.U. collectively wanted to move forward, and the U.K. could get its way by threatening to use its veto to derail the next step (though on the fiscal compact, his "veto" merely meant that it went ahead outside the E.U.'s legal structures, not that it didn't go ahead at all). By contrast, any future negotiations would need to satisfy both Mr. Cameron's mouth-frothing backbenchers, and 26 other countries heartily sick of British demands to be treated as a special case (plus, of course, the European Parliament and other vested interests). Some tinkering around the edges might be accepted, but I can't see them signing up to the sort of major reforms envisaged by the Prime Minister.

Not that he spelt out in detail exactly what those reforms would entail. Which strengthened the impression that the point of this speech was domestic rather than foreign. A poll taken in November 2012 by Eurobarometer shows that the U.K. is the only country in the E.U. in which a majority (53%) of those asked agreed with the statement "my country would be better off outside the E.U."; in austerity-plagued Spain, it was only 27%, in Denmark it was 21%. Mr. Cameron's Conservative Party has been under intense pressure from the single-issue U.K. Independence Party, which is actively campaigning for an exit; something had to be said to shore up his own party's base.

The problem is that there is a difference between domestic politics and statesmanship. Opinion polls during the past 50 years have consistently shown that the British people are willing to be led on European issues, if only their national leaders would lead them. They never do. Mr. Cameron today repeated the same old canards said before; that laws are "imposed" by Brussels (all E.U. legislation is approved by national leaders in Councils); that the E.U. is just a matter of trade (it hasn't been for 40 years); that European legal judgments give the U.K. difficulties (a common club based on rules needs a common adjudicator of those rules, how else could it function?); that there is a democratic deficit (ever seen the House of Commons at work?); that a single market does not require common legislation.

Underlying it all, sadly, is a more fundamental problem, in my view. I say sadly, since I myself am a Brit. That problem is that we Brits have still not accepted that we are not top dog in the world anymore, and so cannot accept the basic idea that it is better to be a smaller part of something bigger, than stand alone. Since 1945, we have thrashed around in the net of the perception of our special status, trying to find a post-imperial role. Sir Henry Tizard's memo is as relevant today as it was in 1949. And just as ignored.

David Cameron is leading us into another Suez moment. My prediction is that the U.K. is going to fluff it in exactly the same way. That's the saddest thing of all.

Walter Blotscher

Tuesday 22 January 2013

BARACK OBAMA AT HALFWAY (3)

As Barack Obama was inaugurated today for his second, and final, term of office, it is hard not to feel somewhat apprehensive about what that term might bring. Back in November, when he was re-elected, averting the fiscal cliff was the absolute priority. Yet although disaster was averted (just), the President's role in the negotiations with Congress was not impressive. Given that a new, and hopefully longer-term, deal needs to be struck within the next few months, that does not bode well, particularly since Mr. Obama also intends to change his Treasury Secretary at the same time. Cabinet appointments have to be approved by the Senate, thereby giving a fractious Congress yet another opportunity to make mischief.

Putting America's finances onto some sort of proper footing must be the absolute number one domestic priority; kicking the can further down the road, as the Americans would say and have been doing for the past decade, is not an option. Yet the President has always seemed rather uninterested in economic policy. It is true that American Presidents, like Governments most places, have less leverage over the economy than they like to make out. Nevertheless, an economic agent that owes roughly US$16 trillion remains a pretty big agent, and it is important for everyone else that - at the least - that agent knows what it is doing. That has not always been apparent during Mr. Obama's first term.

Abroad, there remain serious problems. The U.S. is out of Iraq, but the latter doesn't seem to be functioning very well. Afghanistan is a mess, whatever the politicians say, and Pakistan is fast getting there, as is Syria. Iran and Russia remain prickly. Mr. Obama has yet to meet China's new leadership, and has yet to visit Israel. Other, low-level, conflicts are bubbling away in Africa.

In short, there is a lot to be done. The problem is that in Mr. Obama's first term, he combined lofty rhetoric with a disturbing coolness that suggested more of a desire to get re-elected than to make an impact. Because of the U.S. electoral system, all Presidents do this to some extent. But Mr. Obama seemed to do it more; which means in turn that he has more to do.

Walter Blotscher

Monday 21 January 2013

LUKKELOVEN (2)

The first statistics are out on the economic effect of the liberalisation of the Lukkeloven ("Closing Law"), which took place on 1 October.

Although the changes have only been going for three months, it is clear that the losers are small shops and big supermarkets, and for the same reason; it is simply too expensive to have the necessary extra staff available in the evenings and on Sundays. Labour is ferociously expensive in Denmark; labour at time and a half or double time is simply prohibitive.

It is also clear that the big winners are discount supermarkets, where goods are piled up in cardboard boxes and labour is thin on the ground. Coop has already decided to rebrand 15 of its full-service Super Brugsen stores as Fakta (the discount version). Meanwhile, German-owned Aldi and Lidl, and Norwegian-owned Rema 1000 are all making inroads.

Indeed, discount supermarkets are predicted to represent 45% of the total market by 2020, up from 25% in 2002 and 35% today. Not everybody will like that result, but it does seem inevitable. Once liberalised, retail markets seem to remain that way.

Walter Blotscher

Saturday 19 January 2013

TELEVISION IN DENMARK

When I was young, not everybody had a television; and those that did were often only black and white. Now, however, everybody in the rich world expects to have a television.

Until today, though, I did not realise just how many televisions there were in circulation. In Denmark, 85% of households have not just a television, but a flat-screen television; fully 50% of households have two or more of them. The first figure has doubled in the past five years, the second has quadrupled. At this rate, every single Dane will have their own flat-screen TV by 2020.

Whether that is a good thing is, of course, a moot point. But it does make for good sports watching. The combination of the world handball championships from Spain, tennis from the Australian Open, and football from the Premier League was my diet today. And a good one it was too.

Walter Blotscher  

Friday 18 January 2013

LANCE ARMSTRONG (3)

I never expected it to happen, but Lance Armstrong has just confessed to systematic doping throughout his career. I am not surprised that it turns out to be true - everyone was doing it and I always thought he was too - but I am surprised that he has confessed. Not least because his admission may well result in some very nasty legal consequences for him. If he had ridden for any team, then it might not matter. But he spent most of his career riding with sponsorship from the U.S. Postal Service, which is part of the U.S. Federal Government. Ripping off the Government - riding while doped was specifically against the sponsorship contract - goes down very badly in America, and their memories are long.

Oprah Winfrey, whose television channel carried the exclusive interview, treated Armstrong rather gently, and I am convinced that he was prepped in advance by his team of lawyers. But at least the core of the story is now out in the open; Lance Armstrong did not win the Tour de France seven times in a row through his own merits alone.

Walter Blotscher

Thursday 17 January 2013

MALI

The former French colony of Mali is big (twice the size of France itself), sparsely populated, and poor. It is most well-known for the city of Timbuktu, which for centuries was a regional stronghold and Islamic centre of learning, but which is now just a provincial town. Since the country's Government was reasonably democratic and not too despotic, the rest of the world was inclined to leave it alone.

Until now. The world's powers have woken up in recent months to the possibility that the vast desert region of northern Mali, southern Algeria and Mauritania could become a breeding ground for terrorist training in the same way that Afghanistan has been. There have always been Tuareg rebels in the north of Mali; but they tended to be left alone to do their own thing. Now, however, the region has been infiltrated by Islamists with links to Al Quaeda, who have taken over about half of the country.

This was too much for France, who have now stepped in with troops and equipment. Officially, the French were responding to a request for help from the Malian Government to retake control of their territory; and they were careful to get both Security Council backing and the inclusion of troops from other West African countries. Yet it is hard not to draw the conclusion that France wanted to lance a boil in what it considers to be one of its prime spheres of influence, before that boil burst into something much nastier.

A decision which seems wise. In the last day or so, some of those Islamists have hopped over the (porous) border into Algeria, hijacked an oil installation in the desert, and taken a large number of people, including Western technicians, hostage. The Algerian authorities, ignoring Western advice, have now retaken the facility, though quite a lot of people have been killed in the process. The ramifications and fallout from these events will take time to emerge, but one thing is already certain: the world knows much more about the geography of northern Mali than it did a year ago.    

Walter Blotscher

Wednesday 16 January 2013

ELECTRONIC LOCKS

We have just had new doors fitted at the local cinema. The old ones were rotten at the bottom, and the back door was built for dwarves. Banging your head against a door frame is a powerful incentive for change, I have learned.

Under the old system, all of the volunteers had a key. This had a number of problems, including keeping a record of who had keys, and the gradual erosion of accuracy as copies were made of copies. As part of the review of our insurance arrangements, we were encouraged to order a new door with an electronic locking system.

Fine in theory, but not so fine in practice. The local firm who made the door didn't know how to work out the coding; not did the firm who installed it, despite their talking to the factory. So it was left to muggins me to sort it out. Fortunately, I succeeded; though it took me two hours of running around in temperatures of minus nine celsius before I could work out the various codes and programmes, making sure that it really did lock when I thought it did, and that the alarm didn't go off unexpectedly.

I think we are there now, so I am feeling pretty pleased with myself. All I need to do now is get 40 volunteers to learn how to use it.

Walter Blotscher

Monday 14 January 2013

FISCAL CLIFFS (2)

Both the American and Danish fiscal cliffs were due to arrive on 1 January. So what happened?

In the U.S., disaster has been averted. The deal cobbled together just after the New Year between Congress and the White House raises taxes on the top 1% of earners, while delaying for two months the automatic spending cuts that would otherwise have kicked in on the first day of the year. As such, it was a political victory for President Obama. Republicans have not voted for higher taxes in more than two decades, and had vowed not to do so this time around. But in the war of words and political blame, it is they who blinked.

Nevertheless, that does not mean that the fiscal cliff has been averted. In most countries, legislatures approve tax and spending measures; any resulting surplus or deficit is then left to itself as a residual. However, America has an unusual system, whereby Congress not only approves tax and spending measures, but also votes on the results by approving increases (since the budget is nearly always in deficit) in the federal debt ceiling. You would think that if legislators have taken decisions, then they would gladly accept the consequences of those decisions. But hey, this is Congress.

Which is why the two months delay is important. Around that time, the Treasury will bump up against the current federal debt ceiling, and will have to ask Congress to increase it. At which point all the Republicans who were dead against the latest deal will have the opportunity to reopen it, and be intransigent again. In other words, the latest deal merely buys time, it doesn't really solve anything.

In my earlier post, I said that Danish politicians, in contrast to their feckless equivalents across the Atlantic, were far too sensible not to tackle the fiscal cliff caused by people losing their right to unemployment benefit from 1 January. Unfortunately I was far too sanguine. The Government's big idea was the so-called "acute job plan", whereby 12,500 jobs would be created by the public and private sectors by 1 July 2013; priority for these jobs would then be given to people who would otherwise fall out of the unemployment benefit regime during the first half of this year. But the plan has not worked. First, only half of the jobs have been advertised; and in the private sector, it is only 1,500 out of their proposed 7,500 share. Secondly, many of the public sector jobs advertised are completely inappropriate for the long-term unemployed. Saying that a consultant surgeon job is an "acute job" is almost idiotic; no consultant surgeon is currently unemployed, and nobody currently unemployed could do a consultant surgeon's job.Thirdly, although acute jobs are supposed to go to people about to lose their right to unemployment benefit (i.e. the long-term unemployed) no rational employer, not even a public sector one, will take such a person if another candidate is better qualified.

Underlying everything is a serious dose of overoptimism. When it was decided to reduce the dole period from 4 years to 2, starting from 1 July 2010, the Employment Ministry estimated that some 2,000 - 4,000 people a year would fall out of the net. Last year, when the 1 July 2012 deadline was extended by 6 months to 1 January 2013, that estimate had risen to 7,000 - 12,000. Now, however, the estimate has risen again; between 17,000 and 23,000 are expected to drop out of the system during the coming six months.

The truth of the matter is that the Government is floundering on this issue. What seemed a sensible idea when unemployment was modest and falling now seems a disaster when it is high and still rising. Meanwhile, the drip drip of horror stories about families who fall out of the system has started to appear in the press. As in America, the fiscal cliff has not gone away.          

Walter Blotscher

Sunday 13 January 2013

DANISH AGRICULTURE (3)

Politicians are fond of saying that the end of the financial crisis is just around the corner; Danish farmers beg to differ.

New statistics show that land prices continue to fall, and have now dropped 42% since their peak in the summer of 2008. This has wiped kr.286 billion off the sector's value, and made many farmers insolvent. Given farming's contribution to Denmark's export sector, this is a major concern. Economists are saying that the bottom has been reached; but they were saying that a year ago, and it turned out not to be true.

Low land prices should in principle help young people wishing to start out as farmers (a necessary development, given the fact that the average age of farmers in rich countries is quite high). However, the losses incurred in agriculture during the past 4 years have caused the banks to shun the sector, and they are not lending at all. I suspect that land prices have further to fall before there is equilibrium.

Walter Blotscher

Thursday 10 January 2013

LURPAK

Lurpak was the butter of choice at home when I was growing up in the U.K. Little did I know at the time that it was (and is) Danish.

Lurpak was started in 1888 as an export trademark for the 1,500 Danish dairies then in existence. Most of these were extremely local, and owned by the farmers in the area, who supplied the milk. Over the past 125 years, nearly all of these small units have either closed, consolidated or merged. Today, some 98% of Lurpak's Dkr.3 billion of sales is accounted for by Arla Foods, the giant of the industry. Arla has now applied to take over the trademark so that it owns it 100%; other dairies wishing to sell Lurpak can do so under a licence agreement. Arla's motive is the huge potential it sees for dairy products in emerging countries such as Russia and China.

The only problem with proper butter is that it tends to come out of the fridge hard, which makes it difficult to spread. Arla are tackling that particular problem by adding a small amount of rapeseed oil. If they succeed, then I may well become a Lurpak customer some 40 years after I stopped.

Walter Blotscher

Wednesday 9 January 2013

SUPERMARKET DELIVERIES

Scotland at New Year was great. Turn off at Blair Atholl and drive for 45 minutes along a track up though the Tilt valley until you get to Forest Lodge. Nothing else for miles around except deer, birds and the occasional arctic hare.

We were self-catering, which was fine. But it's difficult to take enough milk for a week when there are 23 of you. And not easy to go and get it when you run out, particularly when it's the holiday season. Fortunately, Asda came to the rescue. All supermarkets in the U.K. have for some time operated a system, whereby you can order groceries online, and they deliver. What is surprising is how cheap it is, just £5 per order. That wouldn't cover the operating cost of 90 minutes up and down the track, let alone the driving to and from the nearest town, either Pitlochry or (more probably) Perth.

Uneconomic, perhaps. But as a customer marketing ploy, fantastic. I don't often shop for groceries in the U.K. But if I did, I know which supermarket chain I would opt for.

Walter Blotscher

Tuesday 8 January 2013

GETTING GOING

The eagle-eyed will have read in my last post of 2012 that I would be back here and blogging as from Sunday. Yet here I am, late on Tuesday, and nothing has happened. Why not?

The answer is that it has been hard to get going in 2013. So I have decided to write a short post as a gentle way in. Which I have just done, and will now go to bed.

Walter Blotscher