From Durex to diamonds, companies count cost of global crises
The Impact of Global Crises on Major Companies
By Alexander Marrow, Clara Denina and Helen Reid
LONDON, June 16 (Reuters) - Global firms from consumer goods giant Reckitt to diamond maker De Beers and brewer Carlsberg said on Tuesday that the Iran war and U.S. tariffs had created one of the most uncertain periods for business in recent history, with the impact on prices and supply chains likely to drag.
In comments at the Reuters NEXT Europe conference, business leaders counted the cost of tariffs and the conflict, which have left scars on industries worldwide even as the U.S. and Iran zero in on a framework for a peace deal this week and Europe ratified a trade deal with the United States.
Permanent Damage and Industry Turbulence
"I think there's been permanent damage," De Beers CEO Al Cook told Reuters in an interview, citing tariffs, though he said that the impact should ease for the diamond unit of Anglo American which is closing in on a likely sale.
"I think the turbulence that we're all going through in every industry has been challenging. I think probably every person in this room would like a little bit going forward, a little bit less of that."
Inflation Wave and Delayed Effects
INFLATION WAVE LIKELY TO HIT WITH A DELAY
A peace deal in Iran, which could be signed on Friday, could help stabilize a conflict that has pushed up energy prices, hit airlines and snarled supply chains, even if the talks remain fragile and many companies say the impact won't fade overnight.
"We're really just at the beginning of seeing all that come through and affect the consumer," Durex-to-Dettol maker Reckitt's CEO Kris Licht said, adding input prices were likely to be affected over the next year.
"There's actually a bit of a delay on some of that."
European Central Bank chief economist Philip Lane said that inflation was likely to be sticky given the war had become more than a "blip" some had expected even if peace was near.
"What we have now is we think already in the pipeline of inflation is basically a year of inflation above 3% with the long variable lag," he said.
Uncertainty for Consumer Goods Firms
'AS UNCERTAIN AS IT HAS BEEN'
Consumer goods firms are navigating a tough global environment with weak consumer sentiment, higher costs and supply disruptions.
"This is as uncertain as it has been," Carlsberg's Chief Financial Officer Ulrica Fearn told Reuters, adding it was "just another level of uncertainty on top of what was uncertain already before". A peace deal, however, could help, she said.
"Hopefully the consumer will get back on track and feel a little bit more certain about the future," she added.
Sector-Specific Responses
Reckitt's Licht said demand for self-care products was holding up well despite pockets of "pressure" hurting U.S. consumers being exacerbated by high prices including at the gas pump.
De Beers' Cook said the firm was less worried now about tariffs, despite whipsaw moves by U.S. President Donald Trump, but added the firm was seeing an unequal rebound in demand.
K-Shaped Recovery in the Diamond Market
"What we're seeing is what we call a K-shaped recovery," he said, referring to a trend of rising pressure on low-end products while top-end diamonds were going up in price.
"What we want to be seeing over the next few months and years is that top part of the K grow and the bottom part of the K get pulled up. That's our challenge at the moment," he said.
Further Information and Coverage
View the Reuters Next live broadcast of the World Stage here, and read full coverage here.
(Reporting by Alexander Marrow, Clara Denina, Helen Reid, Marc Jones, Yoruk Bahceli, Emma Rumney, Tom Daly and Balazs Koranyi in London, Alessandro Parodi and Izabela Niemiec in Gdansk; Writing by Adam Jourdan; Editing by Hugh Lawson)
