Weekend press round-up, 23-24 February 2019

A giant step: the Patisserie Valerie buyout

A week on since backing a buyout of 96 Patisserie Valerie branches out of administration, Matthew Scaife, a partner at Irish private equity firm Causeway Capital, is keen to crack on with rebuilding the business.

“It is time to roll the sleeves up,” Scaife said. “We are only a week in, but the 96 stores we acquired traded quite well over the Valentine’s period.”

The long-term challenge is to deliver sustainable growth. “We want to back the people who are managing and growing the business day to day [in the bakeries, kitchens and stores],” he said.

Founded in London’s Soho district in 1926, the venerable Patisserie Valerie had been best known for its cakes until it fell into administration in January, three months after it emerged that its accounts had been overstated by more than £40m (€46m). KPMG was appointed administrator and closed 70 cafes, which resulted in 970 redundancies. Alongside members of management, Causeway is paying less than £13m for the lion’s share of the business — 96 branches, 2,000 staff and a well-known brand.

It is the private equity fund’s sixth deal, and its highest-profile one, to date. Causeway has it origins in Helix Health, a healthcare software company founded by David Raethorne that was sold for a reported €40m in 2014. Dubliner Raethorne was also an investor in Smiles Dental, a dentistry chain founded by Emmet O’Neill that was sold to Oasis Healthcare in the same year for €36m. To read the full story click here .

The Sunday Times

UK food imports from EU face ‘£9bn tariff bill’ under no-deal Brexit

The government is expected next week to spell out its plan to mitigate a potential £9bn food-price shock from a no-deal Brexit, as analysts predict the cost of staples such as beef, cheddar cheese and tomatoes could soar.

With just over a month until the Brexit deadline, the Department for International Trade is expected on Monday to publish a list of new import taxes, or tariffs, that will apply to 5,200 products, including food and clothing, should the UK crash out of the EU without a deal.

The relationship with the EU is key to the price of food because nearly one third of the food eaten in the UK comes from the bloc. At this time of year the situation is more acute because, with UK produce out of season, 90% of lettuces, 80% of tomatoes and 70% of soft fruit is sourced from, or via, the EU.

“Food and drink tariff rates will be higher than those in any other supply chain,” says Richard Lim, chief executive of consultancy firm Retail Economics. “All stages within the food supply chain will experience increased costs, with retailers hit disproportionately as processed goods attract higher duties than raw materials and semi-processed goods.”

In 2017 the UK bought about £34bn of groceries from the EU, which arrived on supermarket shelves and at factory gates without being hit by customs duties or other trade costs. But if the UK leaves the EU without a deal, both will fall back on the World Trade Organisation’s “most favoured nation” tariffs, which means they must pay import duties on each other’s trade.

On that basis the UK’s 2017 EU food imports would come with a hefty £9.3bn tariff bill on top, according to Retail Economics’s analysis.

The Guardian

Clifford’s restaurant review: 1970s revival food softens the blow of eating underground

Proprietors are drawn to basement restaurants by the lure of saving money, but, asks Ed Cumming, is this how restaurateurs will survive in 2019 and beyond?

Basements are tricky. Restaurateurs are drawn to them because you get more floorspace for your pound. Natural light is not absolutely essential to a good meal. In this respect they are unlike artist’s studios or greenhouses.

If the food is sufficiently distracting, diners will overlook almost anything.

Le Gavroche has endured for 40 years despite being a subterranean old peoples’ home. Gordon’s Wine Bar on Embankment continues to draw a mixture of naive tourists and alcoholic accountants down to its menacing crypts. At least when the bell finally tolls they’ll only have to change the sign on the door to turn it into a catacomb.

A few restaurants manage to make a virtue of being below ground. At the original branches of Temper and Blacklock, it feels right and proper to eat piles of big-flavoured meats in the gloom of a smoke-filled Soho basement.

Despite being in a huge cavern without natural light, Brasserie Zedel always has a jolly atmosphere, like the dining room of a grand ocean liner whose guests have no sense of the icebergs.

But give a chef the choice and they’ll pick upstairs every time. On split-level ground/basement restaurants, being sent into the bowels always feels like a mild diss. It’s good to be able to see what you eat. Instagram makes natural light even more of a priority, for those who like their lunch with a side of lens-flare.

All of which brings us to Clifford’s, a new-ish basement restaurant off Fleet Street behind an unobtrusive entrance and down a surprisingly welcoming flight of stairs. To read the full article click here.

The Independent

The veganism boom does more for food company profits than the planet

The UK bakery chain Greggs was offering free samples of its vegan sausage roll to early morning punters this week. A friend picking up a coffee declined the offer: “Didn’t seem right.”

He is not with the zeitgeist on this one. The number of people in the UK identifying as vegan or vegetarian is rising; the rolls are a best-seller; and the moral high ground increasingly seems to be held by those with plant-based diets. Join them, we are told, and we can save our health and the planet at the same time.

Will we? The truth is that the jury is still out on this one. Take the environment. It isn’t a certainty that a vast increase in plant-based diets would solve all our environmental problems. The carbon cost of industrial cropping is huge: by some estimates, up to 20 per cent of the world’s CO2 output is a direct result of ploughing. And not all methods of animal rearing are equal.

Grain-fed animals, raised in desertified feed lots, are environmentally harmful. But any farmer will tell you (I am married to one) that pasture-raised ruminants can help to store carbon in, and preserve the quality of, our vital top soil. It also isn’t clear that a vegan diet is the most healthy one for most people.

There is a growing body of research pointing out that mixed diets could well be better than plant-based diets, particularly if those plant-based diets are high in both carbohydrates and heavily processed food. Note the success some researchers have had in reversing type 2 diabetes using high protein and high-fat, animal-based diets, for example.

Finally, the idea that veganism is de facto “kind to animals” needs a little challenge. Factory farming is horrible — and there is little excuse for the often-exposed cruelty of slaughter houses. But just how kind it is to eat only plants rather depends on which animals you care most about. If it is just cows, sheep and chickens, fine. If it is all living creatures, things get a little complicated. To read the full article click here (subscription required).

FT Weekend

Gin’s journey in Britain, from ‘mother’s ruin’ to a hipster drink

Ever since European apothecaries began distilling gin and selling it as a cure-all in the 16th century, the juniper-flavoured liquor has been revered as a medicine, vilified for fuelling public disorder and consumed in a multitude of every-season cocktails.

Now, it is stirring up a specialised tourist trade in London, thanks in part to entrepreneurial bottling and branding.

After surging for a decade, gin sales in Britain reached nearly £2bn last autumn, compared with £1.26bn for the same period in 2017, according to the Wine and Spirit Trade Association. Drinkers of pink and flavoured versions have helped make it the country’s second-most-popular spirit, ahead of whisky and behind only vodka, the group says.

Gin has become so popular in Britain that the Office for National Statistics (ONS) added it back to the basket of goods it uses to measure inflation after a 13-year absence.

Many of the newer products share the flavour of juniper, but others vary widely from traditional dry gin, which, by European law, must be distilled from natural plant materials and have a minimum of 37.5 per cent alcohol by volume.

The revival has spawned gin-flavoured marmalade and gin-scented candles, prompting fears of overkill among some British producers. As a result, they are seeking new growth overseas. To read the full story click here.

The Independent

Hammerson revs up sell-offs under pressure from Elliott Advisors

Hammerson is set to unveil a more aggressive asset sell-off plan this week after activist investor Elliott Advisors increased its stake in the shopping centre owner.

Last year, chief executive David Atkins pledged to sell Hammerson’s retail parks and raise £1.1bn to cut debt. It is understood that Atkins will put more assets on the block at tomorrow’s full-year results.

Elliott is breathing down Atkins’s neck. The US hedge fund is said to be pushing the board to reshape its portfolio fundamentally. Late last year, the activist is understood to have used the steep decline in Hammerson’s share price to add to its position, which was 5.3% in July. Elliott’s stake is held through derivatives, meaning it has to make a further disclosure only when the holding hits 10%.

Hammerson wants to refocus its portfolio on prime shopping centres and discount outlets such as Bicester Village. Atkins could sell its French shopping centres or some of its lower-quality UK assets.

Property industry sources said the toxic sentiment towards retail property has meant that Hammerson has been unable to attract acceptable offers for several of its retail parks, which remain unsold months after being put on the market.

Atkins and the board are under pressure after pursuing a merger with Intu last year, rebuffing two approaches from French rival Klépierre during the process. The second of those, in April, was at 635p a share — a 71% premium to the current price. “Clearly they’ve made fools of themselves,” said a top 20 shareholder. “The market has proven that and they’ve got a lot to make up for.”

The Sunday Times

Can food affect your mood?

Having accrued enough self-awareness to stop setting genuinely ambitious resolutions, I have sworn instead to keep my kitchen cupboards in order during 2019. Tidy condiments, tidy mind . . . right? Thus it was that I recently discovered 13 different kinds of herbal tea in a drawer, each promising magically to elevate my mental state in different ways. Shoved behind the once-opened quinoa and the overspilling penne, I own “Relax” tea, “Love” tea, “Revitalise” tea, “Happy” tea, “Calm” tea, “Up Beet” tea, “Wind Down” tea and more.

So how is it that I remain stressed out, sluggish and snappy? Am I a fool to fall for their claims? If so, am I alone in my idiocy? The answer to the last question, at least, appears to be a reassuringly resounding “no”. At the end of last year, the launch of Tesco’s “Wind Down Infusion” tea attracted the attention of The Grocer. “It doesn’t exactly look groundbreaking,” the industry magazine’s article admitted, but “while functionality linked to physical benefits, such as improved digestion, has long been a trend in UK grocery, linking food and drink consumption with mood is a relatively new frontier.”

We are, in other words, entering a new phase in the obsession with clean eating. Having devoured food and drink products promising to provide us with balanced and healthy bodies, we are now thirsty for ones that claim to create balanced and healthy minds. According to a 2018 “Mood to Order” report published by the market researchers Mintel, three quarters of women and 58 per cent of men now agree that what you eat has a direct impact on your emotional wellbeing. To read the full article click here (subscription required).

FT Weekend