Monday, 27 October 2014

New era for supermarkets

When Tesco reported a 92% fall in profits last week this was not only a massive shock to its shareholders but I think it will herald a new era of in the world of supermarkets which could have serious ramifications for suppliers.

My concern is heightened by the rhetoric coming from retail analyst, Clive Black, following a meeting with Dave Lewis, the CEO of Tesco where Mr Black said, “Tesco will have to invest in price” and “considerable cost reductions will lead to more responsibility for suppliers”.

This seems to be “marketing speak” for Tesco reducing their prices at the cost of their suppliers, many of whom in the world of agriculture, are struggling at present with farm commodity prices at a low ebb. One only has to look at the impact that the supermarket price war on milk has had on the dairy industry in recent months to understand the difficulties this will create for the wider food and farming industry if similar price pressure is brought to bear on all products.

It is appreciated the recent fall in milk price has not been entirely driven by the downward pressure on the milk price in supermarkets but this has surely contributed to the malaise that currently afflicts the diary industry.

So, with Tesco in trouble and most other supermarkets all chasing prices down this is a worry for farmers and the wider food processing industry, which plays a significant role in our local economy.

However, Tesco is certainly going to have to do something radical because it does seem to have lost the trust of its customer base. This must be a big concern and although providing cheaper food is obviously going to be an important aspect of its recovery plan, I do also wonder how impressed customers will be if Tesco’s “investment in price” turns out to be at the cost of its suppliers rather than its shareholders and the senior management team who have done very well for many years.

Farmers and supermarkets often have a fractious relationship and it seems to me this relationship is likely to be more rather than less strained while the supermarkets vie for supremacy in an ever more price sensitive market place.  

James Stephen MRICS FAAV
Rural Practice Chartered Surveyor, Wells

T: 01749 683381

Tuesday, 21 October 2014

Lack of gas safety certification will have major consequences

British Gas has revealed that 14 per cent of landlords among their customers who took part in a survey knew nothing about gas safety regulations.

It would be nice to think they had just sampled the wrong customers but that’s not likely to be the case.

With recent prosecutions seeing several landlords fined heavily for not having gas safety certificates for their properties and the startling results of that survey, perhaps it’s timely to remind all our landlords that gas safety inspections are a vital part of being a responsible landlord.

Sometimes it’s easier to remember essential electrical safety checks just because the signs of the power source are so obvious with sockets and plugs in virtually every room.

Gas, though, especially when powering hidden equipment such as boilers, is less apparent and much easier to ignore. Sadly, when things do go awry it’s also more difficult to detect. True, straightforward leaks are apparent by the smell of the escaping gas but when a gas appliance malfunctions in its combustion or exhaust processes the resulting leak of CO, a highly toxic and invisible gas with no odour, can have disastrous consequences. Victims of CO poisoning can, at worst, drift totally unaware into a deep sleep from which they never awaken.

Every landlord should ensure that all gas supplies and appliances are checked and certificated every year without fail. Where we are instructed to manage your property, we will arrange this on your behalf.

Lisa Simon, 
Partner Head of Residential Lettings
T: 020 7518 3234 

Thursday, 16 October 2014

Garden Cities on their own could only ever be a small part of the solution

Lord Wolfson’s recent Garden Cities Competition has really put the cat among the pigeons. A lavish bash at the RIBA was held to announce the winner of the £250,000 prize for a new Garden City concept which was visionary, financially viable and popular. Gossip at the pre-dinner drinks cited this as a somewhat cynical attempt to show that the Coalition Government was addressing the current housing crisis, but if it was it certainly backfired - with an immediate response from the housing minister vowing never ever to build on the Greenbelt (or at least until after the general election).

The irony of this announcement will not be lost on those who have actually read Ebenezer Howard’s work. Although enormously influential across the world, only two towns of just over 30,000 people were ever built in the UK, and neither followed his ideal model of a hub city surrounded by half a dozen satellite cities. This helps to explain, apart from the cosy-sounding name, why they are so popular and why everyone was so panicked by the winning competition entry’s proposal to build some 40 new cities up and down the country. Heavens, this sounds perilously like a new towns programme which is generally considered to be political suicide. The other irony is that Howard actually invented the concept of the Green Belt as a device to separate and protect the sanctity of his settlements, but once they are all over the place there is a great danger of continuous coalescence. This is pretty much what London and its commuting hinterland is now, and many people find it works quite well – London effectively already spreads from Bedford to Epsom.

The one fundamental point remains – we are massively short of housing, and Garden Cities on their own could only ever be a small part of the solution. We probably need new cities, new towns, urban extensions, urban intensification and urban regeneration, and a whole lot more besides. And we almost certainly need it on both green fields and brownfield land. Change is inevitable in both popular and less desirable areas alike, and people need to stop being such short-sighted Nimbys.

Laws passed in the time of Elizabeth I to limit the spread of London proved unsuccessful, and there is no certainty that they will be more successful today. What a delicious irony that St Martin in the Fields is sited in Trafalgar Square which most people feel is now the centre of a world-class metropolis.

John Phillipps, 
Consultant, Masterplanning
T: 020 7016 0726 

Tuesday, 14 October 2014

Somerset Cheese: The Great Taste Awards

With all the doom and gloom surrounding the dairy industry at present it is nice to be able to report on a success story in the form of the Somerset Cheese Company which has recently won a Great Taste Award.

The Great Taste Awards which are organised by the Guild of Fine Food, is the acknowledged benchmark for speciality food and drink. It has been described as the ‘Oscars’ of the food world and the ‘epicurean equivalent of the Booker prize’. Quite simply the Great Taste logo is the sign you can trust when buying food and drink in your local, quality retailer.

Therefore it was a great honour, when Anita Robinson and business partner and fellow cheesemaker, Philip Rainbow attended the The Royal Garden Hotel, Kensington and won the “Woman and Home Great Taste VIP Award” for one of their cheeses, Pennard Ridge.

Jane Curren, Food Director for Woman & Home and Woman & Home Feel Good Food explained, “Somerset Cheese appeared in the May/June issue of Feel Good Food this year. We feature producers who have won stars at the Great Taste Awards. We are a media partner of Great Taste and every year we give an award. We select a shortlist of producers which we call VIPs, Very Important Producers. The shortlist then goes up on our website and our readers vote for their favourite. Somerset Cheese must have a lot of fans as they were the outright winners! It is very much part of our DNA at Woman & Home and Feel Good Food to promote smaller producers who are doing great things.”

The Somerset Cheese Company, based in Ditcheat, is a young company founded by long-term friends Philip Rainbow, and Nicholas and Anita Robinson. Philip has over 40 years experience in the craft of cheese making and his expertise is well renowned and respected. He has won awards in both national and international shows on a regular basis.

Philip and Anita worked together for many years before the Somerset Cheese Co. was formed, Philip was the head cheese maker for a renowned local dairy and Anita was his assistant.

Now they have combined their individual talents along with Anita’s husband Nick who brings a wealth of day to day business knowledge.

Using high quality milk that is sourced directly from the farm, and as local as possible, the Somerset Cheese Company specialises in adapting traditional style recipes to produce characterful, naturally rinded cheese from sheep, goat, buffalo and cows milk.

So why not try some of their excellent cheeses; I have and they are delicious. We even got the thumbs up from some hungry dairy farmers when we featured one of their cheeses on Carter Jonas’ stand at the Dairy Show which was held recently at the Bath and West Showground.

James Stephen MRICS FAAV
Rural Practice Chartered Surveyor, Wells

T: 01749 683381

Monday, 13 October 2014

New code will help tenants and landlords

The Private Rented Sector Code of Practice endorsed, and commissioned, by the Government and drawn up by the Royal Institution of Chartered Surveyors (RICS) has launched.

Another 16 industry bodies, including ARLA and The Property Ombudsman to which, with RICS, we are affiliated, joined RICS in its creation. Some key points of the code affecting landlords are:

- Landlords should choose agents who are members of an accredited body; belong to an independent redress scheme; have client money protection; and have insurances such as professional indemnity.

- Agents should keep client money separate, in a dedicated client account which should be in credit at all times and kept in an FCA-authorised bank or building society. Any interest earned on client money should be credited to the client or tenant.

-Agents should declare any commission received from the repair and maintenance contractors at the time that estimates for work are provided to the landlord.

-Carbon monoxide detectors should be provided in all properties with a gas or solid fuel appliance.

Electrical certificates should be provided to the tenant. Full wiring tests should be carried out every ten years (five years in HMOs). There should also be regular portable appliance tests (PATs).

-If the tenant refuses access, neither landlord nor agent can enter without a court order.

It’s all fairly straightforward but the difficulty has always been that many tenants, and quite a number of landlords, don’t know what to look for when they are seeking a property to live in or, in the case of a landlord, someone to manage a letting on their behalf.

Hopefully, this new guidance will make life easier for those who need to buy rather than rent and we are looking to put all parts of it into practice.

The Code can be downloaded here.

Lisa Simon, 
Partner Head of Residential Lettings
T: 020 7518 3234 

Monday, 6 October 2014

Single Payment Scheme payments: the lowest in 7 years

The value of this year’s Single Payment Scheme (SPS) payments was set last week at 77.7 pence per Euro which is the lowest rate for 7 years. The Single Payments, which are defined in Euros, are converted to Sterling in order to be paid to British farmers, based on the Euro/Sterling exchange rate on 30th September.

This will come as unwelcome news to farmers who are already facing difficult trading conditions as wheat prices have plummeted to around £100 per tonne while milk prices continue to fall with most dairy farmers now being paid below 30 pence per litre for their milk and some as little as 25 pence per litre. At these prices farmers will be losing money and with European support payments also falling farmers are facing a tough year ahead.

It is estimated the Single Payment received by farmers this year will be approximately 12% less than last year which is in part due to the exchange rate referred to above but also due to other deductions.

These other deductions include 10% compulsory modulation and a 12% transfer from direct payments (Pillar 1) to rural development (Pillar 2). Together these total 22% which is 3% higher than the deductions imposed in 2013. In addition there is also a 1.6% cut in the UK CAP budget and the European Commission’s Financial Discipline Mechanism (FDM) will also be imposed on those farmers receiving more than 2000 Euros. The FDM rate is currently proposed to be 1.3% although this could vary up or down.

NFU vice-president Guy Smith commented, “For many farmers, looking at increasingly tight cashflow projections in the face of plummeting commodity prices, news that SPS payments are also going to be down will feel like another unwelcome turn of the financial screw.

“Farmers should always be wary of crying ‘wolf’ too early but many of us are getting nervous that there might be some serious financial difficulties on the horizon at the moment,” he said.

So, farmers are definitely feeling the pinch and this was evident at the Dairy Show held at the Bath and West showground on 1st October. Although the show itself appeared to be a great success there were definitely a lot of worried dairy farmers around although opinion appeared to be divided as to how to deal with the falling milk prices. Some favoured direct action while others seemed resigned to the fact that world commodity prices have fallen sharply and this was the primary driver as to why prices have fallen sharply.

However I think all were agreed that they need to be treated fairly by the various milk purchasers so as to ensure farmers are not taking an unfair proportion of the burden imposed on the whole industry by the fall in world commodity prices. It is clarity on this particular point which I think needs to be sorted urgently.

James Stephen MRICS FAAV
Rural Practice Chartered Surveyor, Wells

T: 01749 683381

Friday, 3 October 2014

Breaking up is hard to do

While it’s not Scots away, Will Mooney, Carter Jonas partner and head of its commercial agency and professional services in the eastern region, wonders what the genie might get up to if it refuses to go back in its bottle.

Being Northern Irish, I’m no stranger to the damaging effects of political division and and the negative economic impact schism can have on successive generations. I’d suggest that those of us with Celtic origins followed Scotland’s Independence Referendum with a keener eye than our Anglo-Saxon peers – at least until that September weekend when that poll mobilised Westminster’s biggest guns.

The financial markets reacted in the way they always do to uncertainty. Yet, at the same time, how could a ‘little local difficulty’ in the United Kingdom influence global capital and currency markets when there is so much else going on on the international stage?

Cue a number of high profile businesses and corporate interests who expressed their concern or hinted what the consequences might be if expected to do business with, or in, a post-independent Caledonia.

Pro-independence business commentators countered by making the distinction between uncertainty and risk. Do people become entrepreneurs because they take risks or do you have to be a risk taker, first, in order to become an entreprenuer? What has to be certain before a risk becomes designated as a calculated risk and, thereby, worth taking?

In these weeks following the referendum result, there is the sense that many of the old certainties of The Union have gone or are going or are changing or are being challenged.

Not being sophisticated in the ways of psephology, I can’t say whether a 10 per cent differential in favour of remaining part of the United Kingdom is a close run thing or not. But there’s no denying that the referendum debate, has opened-up another layer of debate about a more federated British Isles.

It’s to be hoped that this opening will not become a fissure because, apart from anything else, that’s not our style of doing things in any part of Britain.

The turbo-charged timescale suggested for further devolutionary powers for Scotland - more Devo-medium than Devo-max, as it turns out - promised by the three mainstream party leaders pre-referendum has raised some eyebrows, not least of all those of the Whitehall mandarins who will be charged in getting legislation through in time for Burn’s Night on 25 January, or not.

Will Mooney MRICS

Commercial, Cambridge