Plastic problems persist 

From May 29th-June 1st over 175 countries will gather in Paris (France) for a second rebound of negotiations aimed at solving the world’s plastic pollution problem. The latest meeting will take place more than a year after member countries of the United Nations Environment Assembly agreed to set global standards by 2024. 

The biggest impact of such a treaty will be on consumer goods and packaging companies, which account for over 50% of global plastic consumption, according to the OECD. The current regulations on plastic waste control are fragmented, leading to an uneven progress on waste control. For example, several countries govern the use of single-use plastics through national regulations. In January 2023 Spain enforced a ban on plastic packaging of fruits and vegetables while Italy introduced taxes on non-reusable packaging. From July 2023 Dutch consumers will have to pay extra for single-use plastic cups and food packaging, while Canada will ban the sale of single-use plastic from December 2023. 

This makes the UNEA treaty an essential platform for countries and stakeholders to reach a common ground on developing a framework on plastics pollution. Nevertheless, differences remain between the members on whether to make the standards binding or voluntary and how best to harmonise global rules, and it remains to be seen how much progress is made on those fronts. 

More countries ban e-cigarettes, but there will be little impact

On May 2nd the Australian government announced a strict ban on recreational e-cigarettes, which means that consumers will now need a prescription to buy vapes that will be exclusively available at pharmacies. The government will also ban imports of non-prescription vapes and restrict the quantity of nicotine in e-cigarettes. Additionally, starting September 2023, Australia will hike taxes on tobacco sales by 5% each year over the next three years, making cigarette prices in the country among the highest in the world.

Australia’s crackdown against e-cigarettes echoes the global concerns raised over the popularity of vapes and other electronic nicotine devices (ENDS) among adolescents and the ensuing health risks it poses, including an early addiction to nicotine products. In January 2023 the US FDA banned sales of two e-cigarette products of RJ Reynolds (US), due to the risks they posed for young adults. As of 2021, regulations against advertising or promotion of ENDS offerings were present in 79 countries around the world, although only 32 countries banned sales. The rest of the world does not have any safeguards to oversee unregulated proliferation of these products. 

Australia is not new to cracking the whip on the tobacco industry. In 2012, it enforced ‘plain’ packaging for cigarette packets–packs without logos, brand imaging or promotional text–to make smoking less attractive–a policy that has also been put in place elsewhere (e.g. in the UK, France, Singapore and Thailand). Even as Australia and some other governments push through these regulations, we do not yet expect a big impact on revenues of Big Tobacco companies as most outright bans apply only on e-cigarettes (which account for a fraction of the market share of traditional cigarettes) and there are still many countries with lax regulations.

Consolidation in Europe’s grocery delivery market

Getir (Turkey), a grocery delivery business that has been rapidly expanding across Europe and the US, is in talks to buy Flink (Germany), according to an FT report from end-April. The news comes at a time when high inflation and interest rates are weighing on the European consumer market.

Getir’s plans to acquire Flink comes at a time when investor funding has become parched. A funding winter, re-opening of grocery stores and high prices amid a slowing economy have impacted the future of grocery delivery applications in Europe which took off during the pandemic lockdowns. According to research firm PitchBook, venture capital investment in rapid e-grocers fell to US$3.6bn (as of October 2022) from US$7.6bn in 2021. 

This has paved the way for consolidation. Between May 2021 and December 2022, there have been a series of such deals–Getir acquired Blok (Spain), Weezy (UK), Frichti (France) and Gorilla (Germany); GoPuff(US) acquired Dija (UK) and Fancy (UK); and  Flink acquired Cajoo (France). Of these, Flink and Gorilla had already acquired unicorn status in 2021 but the latter struggled in 2022 until being bought out by Getir while Flink is hopeful of posting a profit by the end of 2024. 

If the Getir-Flink deal goes through, Getir will become one of the largest grocery delivery players in Europe. While the future of the deal remains unclear, what is certain is that the e-grocery market will continue to be under pressure in the near term and Getir is likely to emerge as one of its main players.

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