Today's business and finance round up 24th May 2021

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24th May 2021

Good morning It was another disappointing Eurovision for the UK who finished rock bottom with the dreaded “nil points”…for the second time. Congratulations to the winners Italy who showed us that the Italian rock scene is alive and well.Also well done to Sam G from London who’s the winner of our restaurant vouchers competition!

Today's stories

• Milking it – Oatly goes public

• Trouble down under – Aussie trade deal faces backlash

Friday's market moves

FTSE 100   0.0%   7,018 FTSE 250   0.0%    22,399

Friday was a pretty uneventful day in the markets, the FTSE 100 and 250 held on to earlier gains in the week to close flat. 

DRINKMilking it – Oatly goes public

What’s going onThere was a time not so long ago where the options for milk was limited to cow or soy. Now the world of milk alternatives has exploded (pea milk anyone?) so much so that Oatly, the Swedish oat milk company floated on the Nasdaq stock exchange in New York last week.Why is this importantWith its public listing Oatly is now worth over $10bn. That’s a pretty punchy valuation for a business that had sales of $420m last year and made a loss $60m (blame it on all that eye-catching marketing).This didn’t put off the market, Oatly’s share price rose as much as 30% on the first day of trading. Investors are banking on the popularity of veganism and along with it non-dairy food products to continue.Researchers have predicted that the market for dairy alternatives could almost double over the next five years to $41bn, as consumers become increasingly concerned about the environmental impact of cow milk, pushing shoppers to look for plant-based options.Earlier this year Oatly announced that it's opening its first UK factory in Peterborough in 2023. It’s expected to create 200 jobs and produce 300m litres of oat milk a year.

TakeawayOatly is going to face stiff competition as it grows. Where there’s a large market opportunity you can be sure that established consumer giants will be itching to capitalise on it. Nestle, for example, recently launched a pea-based milk, while Unilever's Ben & Jerry's now offers dairy-free versions of its ice cream range.

TRADETrouble down under – Aussie trade deal faces backlash

The UK government is reportedly close to signing a free trade deal with Australia, this will allow goods between the two countries to move without tariffs aka import taxes.On first glance this appears to be good news. Post Brexit the UK is on the hunt for free trade agreements to try and compensate for the hole left by leaving the EU.It’s estimated that this deal could increase UK exports to Australia by up to £900m. Tariff free trading is also good for consumers as it usually leads to cheaper goods like food and drink.However not everyone is pleased, there’s been backlash from a number of groups:

• The National Farmer Union are worried that opening up trade with Australia will lead to an influx of cheap goods like beef that will put UK farmers out of business.     

• Pro-union groups say that the deal will disproportionately affect Scottish farmers. This could in turn lead to more support for Scottish independence if those farmers feel let down.

• Environmentalists fear that the government’s eagerness to do trade deals will lead to a compromise in food standards and animal welfare. Australian cattle is banned in the EU as their farmers are allowed to use hormones to make cattle grow bigger. 

In the grand schemes of things a deal with Australia would only increase the UK economy by 0.02%.But this agreement could set a benchmark for future negotiations with larger countries like Brazil or the US, so it’s important the government gets it right.

Stat of the day

Telecoms businessman Strive Masiyiwa has been named the first black billionaire in the Sunday Times Rich List with an estimated worth of £1.1bn

Other stories to keep you in the loop

• UK retail sales surged by 9.2% in April as lockdown eased 

• Buy-now-pay-later giant Klarna eyes up London for upcoming public listing

• Restaurants get creative in bid to plug staff shortage

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