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Business

Business Briefs

German tire manufacturer Continental looks eastwards; Wella appears optimistic about Procter and Gamble takeover; Cheap brand food makes its mark with Germans; book fair to remain in Frankfurt and more.

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On an eastward roll: German tyre manufacturer Continental.

Continental heads for new pastures

German tire manufacturer Continental has revealed plans to expand operations in eastern Europe and Asia following the news of record profits in 2002. Continental Managing Director, Manfred Wennemer said on Tuesday that the Hanover-based company was ready to take on new markets and to launch a range of new products such as tyre pressure gauge systems and improved electronic braking systems. Continental’s 2002 profit of €694.3 million ($742.1 million), described by Wennemer as the largest in the history of the company, is in stark contrast to €33 million of the previous year. The turnaround came after Continental closed five manufacturing plants, and moved its production and some of its products to eastern European countries. Speaking in Hanover on Tuesday, Wennemer said the plan now was to tap into new markets, particularly in Asia, in order to keep up the current momentum of growth.

Wella softens its stance

Following its initial rejection of the planned takeover by U.S. consumer goods company, Procter & Gamble, German hair care company Wella appears to have accepted its fate under a new leadership. Speaking on Tuesday, Wella Chief Executive, Heiner Gürtler, said it was now a matter of looking forward and making the best of the situation. “It is highly likely that the transaction will go through, and that sometime later this year Wella will become a part of Procter”, said Gürtler. He stressed that in locking hands with Procter & Gamble, Wella was securing the chance of continued expansion in hairdressing products, perfumes, cosmetics and consumer products, and was also creating new opportunities for Wella employees. It is widely expected that in combining forces, Procter & Gamble and Wella will become No. 3 in the international perfume and cosmetics market.

Germans Love Cheap Imitations

Germany’s sluggish economy has given rise to increased popularity in cheap brand food products, and the trend is showing no sign of slowing down. Managing Director of Unilever Deutschland, Johann Lindenberg announced in Hamburg on Tuesday that so-called ‘trade brands’ have increased their market share from 23 to 26 percent over the past 18 months. He warned that the figure could rise to over 30 percent, and stressed that consumer trends in Germany are at their worst in 20 years. Discount stores such as Aldi and Lidl currently hold some 40 percent of the food retail market, and with their share increasing by one percent per month, they have led to Germany being cheaper for food than almost anywhere else in Europe. Lindenberg warned that this trend did not speak in favour of food quality.

Haffa Brothers ordered to pay up

A district court in the Southern German city of Munich has ordered the founders of media organisation EM.TV, the Haffa brothers, to fork out a stiff fine for fraud. The district attorney had called for an eight month suspended sentence, but the brothers, Florian and Thomas have been ordered to pay fines of €1.2 million and €240,000 respectively. The Haffa brothers, who purchased the rights to productions such as “The Muppet Show” and “Sesame Street”, fell from grace in the German media world when they were charged with defrauding shareholders by making false statements to buoy up their flagging share prices. The accused have denied the allegations throughout the six-month trial, and they are now expected to launch an appeal.

Book Fair to Remain in Frankfurt


Frankfurt authorities began to relax on Tuesday after a German publishing group decided at a special meeting to keep the world's biggest book fair in the central German city at least through 2010. The leaders began to worry earlier this year when word leaked out that the organizer, the Börsenverein des Deutschen Buchhandels, was considering moving the fair from its traditional home in Frankfurt to cities such as Munich. The organizer promised that the costs for publishers at the Frankfurt fair would drop when the next fair is held next autumn.