What legal rights (if any) does Milesofpaper Ltd have in respect of payment for the stationery and office equipment??

Introduction As Mr Frank and Mr Stamp entered into the contract with Milesofpaper Ltd before the incorporation of Wearboaters Ltd, it would appear that the contract was entered into under the partnership of Pleasure Boats & Co and thereby governed by the Partnership Act (PA) 1890. In order for a partnership to be created, there must be two or more persons that conduct business with a view to profit. Partnerships are defined under s. 1(1) PA 1890 as a â€Å"relation subsisting between persons carrying on business in common with a view of profit†. Mr Frank and Mr Stamp had clearly entered into a partnership as they carried on business (pleasure boat building and repairing) with a view to profit; Khan v Miah, Ahad and Miah[1]. Unlike companies, partnerships do not have a separate corporate personality and are instead regarded as a collection of individuals or persons.[2] This means that each partner is jointly liable, without limit, for the debts and obligations of the partnership incurred wh ile he or she is a partner (s. 9 PA 1890). Mr Frank and Mr Stamp will therefore both be personally liable for any debts the partnership incurred; M Young Legal Associates Ltd v Zahid[3]. In considering whether Milesofpaper has any rights in respect of payment for the stationary and office equipment, it will need to be considered whether Mr Frank and Mr Stamp are personally liable the contact is capable of binding the partnership. Given that both partners entered into the contract with Milesofpaper, they will be deemed to have had actual authority to bind the firm. S. 5 PA 1890 states that every partner is an agent of the firm whose acts bind the firm and his partners, unless the partner acting had no authority to do so. Given that both Mr Frank and Mr Stamp would have the authority to enter into the contract with Milesofpaper, it is clear that their actions would have bound the firm. However, because the contract was entered into under the company’s name; Wearboaters Ltd, it is doubtful that this particular transaction will be binding against the partners. It is noted under s. 6 PA 1890 that an act relating to the business of the firm must be done in the firm name or any other manner to be binding on the firm and all its partners. Since the act relating to the business of the firm was done in the name of the new unincorporated company, it is unlikely that the partnership will be liable for the debt. Ye t, the individual who entered into the contract may be liable for the debt as their own private act[4]; Sangster v Biddulph[5]. Furthermore, even though Wearboaters Ltd has now been incorporated, Milesofpaper Ltd will not be able to enforce the pre-incorporated contract. The reason for this is that; â€Å"before incorporation, the company is not competent to enter into contract in its own name as it has no legal entity†[6]. As such, Wearboaters Ltd will not be capable of being sued for the pre-incorporation contract that was entered into between Mr Frank, Mr Stamp and Milesofpaper. In Re English & Colonial Product Co[7] it was held that a company was not liable to pay for services and expenses incurred by a solicitor pre-incorporation as the company was not in existence at the time when the expenses were incurred. In addition, it was also held in CIT v City Mills Distilleries (P) Ltd[8] that a company has no status prior to its incorporation and can have no income or liability. As the company had not been incorporated, Mr Frank and Mr Stamp will be classed as ‘promoters’ who will have purported to enter into a contract by or on behalf of Wearboaters Ltd[9]. As promoters, Mr Frank and Mr Stamp will be personally liable unless the contract states otherwise (s. 51 Companies Act (CA) 2006). In Phonogram Ltd v Lane[10] it was held that a promoter of a company was personally liable to repay a deb t that was made on the company’s behalf under s. 51 CA 2006 (previously 2. 36 CA 1985) even though the claimant was unaware that the company was not in existence at the time the contract was entered into. Overall, it is likely that Milesofpaper will have a claim against Mr Frank and Mr Stamp in respect of payment for the stationery and office equipment. What legal rights (if any) do Mr Frank and Mr Stamp have in respect to payment for compensation for the destroyed boats and equipment? Once a company has been incorporated, it is separate and distinct from its members as shown in Salomon v Salomon[11]. Here, it was made clear that a company shall be solely liable for any losses or mishaps that arise within the company. In accordance with this principle, a company has the capacity to enter into contracts and sue and be sued in its own name. If the company suffers a breach of contract, it is the company who will be able to sue on the contract for breach and thereby seek to take the appropriate remedial action[12]. As business assets are owned by the company, it is the company who is responsible for insuring them. Because Mr Frank had insured the assets of the business under the partnership, the assets that have been transferred to the company will no longer be insured. This is because Mr Frank does not have an insurable interest in the company’s assets and a new contract would need to have been entered into between the company and the insurer. This was identifi ed in Macaura v Northern Assurance Co Ltd[13] where Macaura was the owner of a timber estate who took out an insurance policy in his own name. Most of the timber was destroyed by fire but Macaura could not claim for loss of goods as he did not have an insurable interest in the timber. It was held that a person cannot claim for loss of goods that are owned by another party. As the company owned the timber, Macaura could not make a claim. Since Wearboaters Ltd is the new owner of the assets, Mr Frank will not be able to make a claim as they no longer have an insurable interest in the assets. When the assets were transferred a new insurance policy should have been taken out in Wearboaters Ltd’s name. As Mr Frank and Mr Stamp have failed to take out a new insurance policy, they will be deemed to have breached their directors’ duties and will be found personally liable for the loss that has been caused to the business. It cannot be said that Mr Frank and Mr Stamp were promoting the success of the company as required under s. 172 CA 2006 and will therefore be liable for any losses incurred; Re Duomatic[14]. This is an exception to the rule in Salomon that a company is separate and distinct from its members and thus allows the corporate veil to be lifted in certain circumstances. In addition, Mr Frank and Mr Stamp also breached their duty to â€Å"exercise reasonable care, skill and diligence† under s. 174 CA 2006 as shown in Secretary of State for Trade and Industry v Goldberg[15]. Although the courts are generally reluctant to lift the corporate veil, they will do so when â€Å"common sense and reality demand it†[16] and when â€Å"there is a powerful argument of principle for lifting the corporate veil where the facts require it†[17]. It could be said that this is to apply in the instant situation as Mr Frank and Mr Stamp should have insured the assets of the business as they were the first directors of Wearboaters Ltd. The courts will only pierce the corporate veil in very limited circumstances, however, and if Mr Frank and Mr Stamp can demonstrate that there was no evidence of â€Å"fraud, illegality or a sham or if the company is a mere facade concealing the true facts† (ss. 213-215 of the Insolvency Act 1986, s. 993 CA 2006 and s. 15 of the Company Directors Disqualification Act 1986), then it is unlikely that they will be found personally liable; Adams v Cape Industries plc[18]. As noted by Talbot; â€Å"veil piecing is not an end in itself but a means to an end†[19]. Therefore, unless the circumstances of the case give rise to fraud or a pre-existing obligation, the courts will be unlikely to pierce the veil in its entirety; Pirelli Cable Holding NV v IRC[20]. It has been said that the courts will â€Å"go to great lengths to avoid any obvious penetration of the corporate veil, whilst still making the sort of inquiries that would be satisfied by just such a process†[21]. T his prevents the doctrine from being completely undermined, whilst also protecting the public; Millam v Print Factory (London) 1991 Ltd[22]. The veil will only be lifted in exceptional circumstances[23] so as to prevent individuals from being discouraged from investing in companies[24]. Overall, given that it Mr Frank and Mr Stamp appear to have made a genuine mistake in respect of the insurance, it is unlikely that they will be found personally liable. However, they will not be entitled to compensation for any loss suffered. Bibliography Text Books A Dignam and J Lowry. Company Law (Core Text Series). (Oxford: OUP Oxford, 2012). D French. S Mason. and C Ryan. Mason, French & Ryan on Company Law, (Oxford: Oxford University Press, 2013). L Jones. Introduction to Business Law. (Oxford: OUP Oxford, 2013). L Talbot, L. Critical Company Law, (London: Routledge, 2007). P P S Gonga. A Text Book of Company Law., (London: Chand, 2002). Journal Articles S Ghaiwal, S. ‘Chandler v Cape plc: Is there a chink in the corporate veil?’ (2012) Health and Safety at Work Newsletter, vol 18, no 3, 487-499. V V Watcher. ‘The Corporate Veil’ (2007) New Law Journal, vol. 990, no. 7218, 22-27. Legislation Partnership Act 1890 Cases Adams v Cape Industries plc [1990] Ch 433 CIT v City Mills Distilleries (P) Ltd (1996) 2 SCC 375 Khan v Miah, Ahad and Miah [2001] All ER Macaura v Northern Assurance Co Ltd [1925] AC 619 Millam v Print Factory (London) 1991 Ltd [2007] EWCA Civ 322 M Young Legal Associates Ltd v Zahid [2006] EWCA Civ 613 Pirelli Cable Holding NV v IRC [2006] UKHL 4 Phonogram Ltd v Lane (1982) QB 938 Re Duomatic [1969] 2 Ch 365 Re English & Colonial Product Co (1906) 2 Ch 435 Salomon v Salomon [1987] AC 22 Sangster v Biddulph [2005] PNLR 33 Secretary of State for Trade and Industry v Goldberg [2004] 1 BCLC 557

Exercise 29 Statistices

Exercise 29 – Statistics work book SUMITHA THOMAS GRAND CANYON UNIVERSITY Exercise 29 – Statistics work book Name:____Sumitha K Thomas________________________________________ Class: ____________________ Date: ___3/10/2013______________________________________________________________________________ ? EXERCISE 29 Questions to be Graded 1. Were the groups in this study independent or dependent? Provide a rationale for your answer. Groups are independent in this study.According to the above data independent groups define as if the two sets of data were not taken from the same subjects and if the scores are not related. In this study subjects are two different genders which is men and women and scores are not even related each other. Therefore this is an independent study. 2. t = ? 3. 15 describes the difference between women and men for what variable in this study? Is this value significant? Provide a rationale for your answer. T = -3. 15 describes the mental health variab ility. This is a significant value because it’s provides the degree of freedom.According to the data above the significance of a t ratio can be determined by comparison with the critical values in a statistical table for the t distribution using the degree of freedom for the study. The value is significant because p value of it is 0. 002 which is smaller than alpha value set for this test that is 0. 05 3. Is t = ? 1. 99 significant? Provide a rationale for your answer. Discuss the meaning of this result in this study. t = -1. 99 is significant because it represent health functioning variables between men and women which compares men and women for perceived coping, quality of life and social support.Smaller P value indicates more significant findings. The P value for health functioning is 0. 049 which is smaller than the alpha level 0. 05 in this study. 4. Examine the t ratios in Table VI. Which t ratio indicates the largest difference between the males and females post MI in this study? Is this t ratio significant? Provide a rationale for your answer. The largest difference between the males and females post MI indicates the mental health. It has t ratio of -3. 15. This is a significant ratio because it has a p value of 0. 02 which is smaller than alpha value that being sent for 0. 05 5. Consider t = ? 2. 50 and t = ? 2. 54. Which t ratio has the smaller p value? Provide a rationale for your answer. What does this result mean? t = -2. 50 has a p value of 0. 01 whereas t = -2. 54 has the p value of 0. 007 which is smaller than p value of 0. 01. This result means that t = -2. 54 has more significant findings, which indicate that better role- physical after post MI between men and women than the physical component score. 6. What is a Type I error?Is there a risk of a Type I error in this study? Provide a rationale for your answer. According to the data above, a type 1 error occurs when the researcher rejects the null hypothesis when it is in actuality true . The type 1 error is often represented by the Greek letter alpha (a). In this study the level of significance or alpha was set at 0. 05 and multiple p value has gone above 0. 05 such as socioeconomic p value0. 58, family p value 0. 51. Therefore, there is type 1 error in this study. 7. Should a Bonferroni procedure be conducted in this study?Provide a rationale for your answer. Because this study has a risk of a type 1 error, a boneferroni procedure should be conducted. This procedure is used to correct the risk of a type 1 error. The boneferroni procedure is a simple calculation in which the alpha is divided by the number of t-tests run on different aspect of the study data. 8. If researchers conducted 9 t-tests on their study data. What alpha level should be used to determine significant differences between the two groups in the study? Provide your calculations.Alpha/ number of t tests performed on study data = more stringent study to determine the significance of study results 0 . 05/9 = 0. 0055. 0. 005 is the alpha level should be used to determine significant differences between the two groups in the study. 9. The authors reported multiple df values in Table VI. Why were different df values reported for this study? The author used multiple df values in table VI because according to the data above, significance of a t ratio can be determined by comparison with the critical values in a statistical table for the t distribution using the degrees of freedom for the study.DF is a mathematical equation that describes the freedom of a particular scores’ value to vary based on the other existing scores values and the sum of the score. The formula for the df = number in group 1+ number in group 2-2. This way author is becoming more specific by providing different df values which shows the comparison and differences between 2 independent groups. 10. What does the t value for the Physical Component Score tell you about men and women post MI? If this result was consistent with previous research, how might you use this knowledge in your practice?The t value tells us about the differences between men and women post MI physical component score. In my practice using this t value, I would be able to work differently between men and women after post MI. Teaching might provide to women more about physical functioning, role physical, bodily pain and general health since these are all included in physical component score. The physical component score for women is 48. 5 compared to men 51. 1 (standard deviation). Therefore, women might need to educate more about the physical components than men.

A Comparison Of Liberalism Socialism And Nationalism Politics Essay

A Comparison Of Liberalism Socialism And Nationalism Politics Essay The three most powerful ideologies that emerged in the beginning of the nineteenth century were Liberalism, socialism and nationalism. These ideologies came together to destroy older order that existed in Western Europe. However, there is very little that is actually known about the real origin of these three ideologies. Most of the research only talks about the recognized authorizes that exercises these ideologies but do not talk about the real issue. This essay seeks to compare and contrast these ideologies and trace their origin, development and revolution. Liberalism This was a product of some kind of enlightenment by human thinking. It held that the progress of human beings was inevitable. This is the reason it believed that all human beings should be viewed to be equal before the law and no one was above the law. Moreover, it believed that every person was born free and is good in some aspect let alone owning the chance to improve in skills and general thinking. Liberalization therefore expected that all governments were representative of its citizens and not part of the citizens. According to Hansen, Curt & Curtis (2008) this could only be achieved through the freedoms of speech, press, assembly and protection from arbitrary arrest. The nineteenth century liberalism which is also referred to as classical liberalism was against the involvement of the government in the economic and social affairs of the nation. This is therefore very different from what we currently know liberalism to stand for where active government intervention is highly supported and represented through democratic parties. Classical liberalism was first developed by Adam Smith as expressed in his book â€Å"Inquiry into the Nature and Causes of Wealth of Nations.† (Hansen, Curtis & Curtis, 2008). He proposed the fact that there was a need for a free enterprise where prices would be regulated by market forces. This he believed would offer a free and equal chance to all citizens to participate in what they do best. In this way both the rich and the poor will benefit rather than a situation where the rich are the only ones who benefit. This was very much different from the earlier situation of mercantilism where the government was very deeply involved in regulation of markets. While the British were experiencing gradual expansion of freedoms and rights of ordinary citizens, the French were denied of such rights until the 1989 when there was the Revolution. Unlike in France, there was no central instrument with which the British used to be oppressed with like the army ready to do what the monarch said. The British liberalization was never aimed at overthrowing the Monarchy. On the contrary it was aimed at reigning its power through the expansion of representation of the people. Because of common political, ethical, cultural and geographical factors liberalization in the United States took so much from the British kind of liberalism than it took from the Frenc h. However, during early stages of Beiner (2003) argues that American Revolution, there was much borrowed from the political thoughts of the British. Subsequent developments then later own changed and took more from the French.

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T.S. Eliot's The Waste Land - Essay Example Attractive to current readers insofar as it resists coherence, the poem has lately been interpreted as a critique of literary and sexual proprieties. It lacks "respect for tradition, " is fascinated with "mutation, degradation, and fragmentation, " split between a longing for "'improper' sexual desires" and a wish to be "rid" of them. (Charles W. Pollard, 2003, pp 90-110). In a curious twist of literary history, recent critics of The Waste Land have returned to the questions that concerned its initial readers, before its elevation to the status of a classic. Troubled by its disorderliness and its debasement of literary value, Eliot inserts beautiful quotations into ugly contexts, and that his poem is a considerable affront against aesthetic sensibilities. Trying to recapture this sense of The Waste Land's offensiveness, critics at the end of the century stress its chaotic structure, its multiple voices, and its internal conflicts, which render it an unfinalized, open text. In so doing, however, they continue to beat a dead horse.

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ENTREPRENEURIAL SURVIVAL - Essay Example As a result of this, the paper focuses on the types of accounts and reports small and medium-sized companies deliver to Company House; showing the deadlines, methods of filing these and the consequences for failure to do the same. There are hundreds of millions of businesses set up each year globally. Starting ones business is always a very exciting experience filled with ambitions and expectations. However, statistics show that out of every 5 businesses set up, 4 will fall in a span of three years. This therefore calls for one to pay attention to the list of options at his disposal and the legal framework involving each and every one of them. This refers to an individual who runs by his/ herself an unincorporated type of business. This is always the easiest option that does not involve much framework. This individual incurs taxes under the system of Inland’s Revenue Assessment with income tax come to after deductions of legitimate expenses incurred by the business and one’s personal allowance. The sole trader is accountable for all the company’s debts and profits. This is a cooperation of at least two individuals solely bound with the shared vision of doing business together. They operate within the boundaries of the Partnership Act of 1890. However, this type of structure does not have its own legal personality hence the partners are to answer for any debts the business incurs. The partnerships agreement covers for: Incorporating what the business per takes of blows a new breath into the whole scene as the business is now viewed as legal person different from the directors. The profits and losses incurred are only limited to the company and it too has its obligations. This therefore means that upon the exit of the management or the shareholders, the company does not cease to be. This is also known as a limited â€Å"company†. A limited company has a higher probability of incurring less tax compared to the other types of companies.

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A hypothetical situation - Essay Example First, data gathering and analysis need to be conducted (Slide 5). Over 55 percent residents have at least a bachelor degree (Plano Economic Development [PEC]a). Thus, switching to another company should not involve a long transition period, as most workers already possess basic knowledge needed for the service industries. Following is the second phase, or selection of a local development strategy (Slide 5). Since the IT sector is strong in Plano, emphasis should be on supporting these companies and furthering their success (PECb). By 2012, most companies that experienced strong growth were in the IT sector (PECb). Third phase is selection of local development projects (Slide 5). Again, support should go to the IT sector. In phase four, action plans should focus on coordination with companies, and stimulation through additional workshops given to labor (Slide 10, 12). Then, project details specification, preparation and implementation could be conducted. Plano’s strength lies in its educated workforce and presence of successful service oriented companies. As a result, layoffs can be counteracted by the growing IT companies, which are in need of additional labor as a result of their

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Analysis of the exam for admission to higher education institutions - Essay Example According to Karen Huffman in her book ‘Psychology in Action’, the scientific standards for a good Psychological Test to measure intelligence are standardization, reliability and validity. Standardization is when norms and uniform procedures must be established for giving and scoring in a particular test. Reliability includes that the test should be such that measures stable and consistent scores when the test is administered the second time and lastly validity is when the results measure what the true purpose of conducting the test was.SAT is standard for everyone and is also reliable at the same time. But when it comes to validity, some people argue that the results of the test do not show the true intelligence of the person. Why is this so? According to K12 Academics, which is an Education Resource Centre, the analogies in the verbal section are ambiguous and there are errors in the scoring of math scores. In 2001 Richard C. Atkinson urged the American Council of Educ ation to drop SAT Reasoning test as a college admission requirement. He recommended making this test optional. Because of this, in 2005, the pattern of the SAT Reasoning test was changed. In 2006, the average national score of the SAT dropped by seven percentage points from 2005. This was the largest drop in 31 years and was reported in the ‘Yale Daily News’ by Josh Duboff. An article published in 2007 by Maya Srikishnan, who is a reporter for ‘The Daily Texan’, reports that this new and improved test also got criticized because of its writing section.... Also this test puts people who do not have English as their first language at a disadvantage as a bigger portion of the test now required the students to know English. This new test was also condemned because of the duration of the test. Students and educationalists argue that the test is too long and this affects the scores of students (Srikishnan, 2007). In short, the new test is argued to be even less valid than the older one. There have also been a lot of errors in the calculation of the final scores. In 2006, it was reported by 'The Daily Gamecock' that all together out of 495,000 tests, 4411 tests had been incorrectly marks. This error in checking makes the test unreliable to some extent. (Pope, 2006) In an article 'Test Bias: The SAT in the College Admissions Process' written by Susan Woollen, she reports that College Board itself emphasizes that SAT should not be used as a main criterion of admission and that it is wrong to determine the grade point average, class rank and ot her qualities in a student by just considering the score of SAT. She also argues that the questions in SAT are also culturally biased towards Blacks and Hispanics. In 2002, the average score of a white American was 527 in verbal and 533 on math section while blacks scored an average of 430 in verbal and 427 in math. This proves that when the scores of different ethnicities were compared, there was a huge difference and according to Susan and her sources, this difference is because of the cultural biased design of SAT. The minorities kept scoring consistently lower than whites. However, this could be because of the quality of education and low housing conditions that are given to the minorities.

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The evolution of the Earth, the Sun, the Moon, planets, and other bodies in the universe - Essay Example The last and furthest planet is Pluto, which is a dwarf planet. After the sun, the second brightest object in the sky is the moon. It orbits around the earth once monthly. The impact theory suggests that the moon got formed out of collision between the earth and a very large object, the size of Mars or more. The moon got borne out of the ejected materials from the collision. At the center of the solar system is the sun. The sun is the largest object in the solar system. The sun makes up close to 99.8% of the solar systems mass (Merali & Skinner, 2008). The heat and light shed by the sun makes life possible on planet earth. The planets orbit the sun in paths called ellipses, which are oval shaped. A solar system references a star and all the objects that orbit around it. In our solar system, the sun is the star. The sun as the center of our solar system illuminates the light and heat that make it possible for life within any of the planets (Merali & Skinner, 2008). The planet earth is the only one proven to support life among the system. The planets Mercury and Venus are too close to the sun making them too hot and dry with little atmosphere. The outer planets are also unable to support life because they lack atmosphere, solid ground, oxygen and contain too much

Diabetes Essay Example | Topics and Well Written Essays - 2000 words - 1

Diabetes - Essay Example The paper aims at discussing the impact and influence of diabetes on South Asian Indian women rather covering the whole South Asia. This would also help in understanding reasons behind the high prevalence of diabetes among these women along with developing a program to curtail the overall impact and influence of diabetes in the short as well as in the long run (Jenum, Birkeland, 2005) It needs to be understood that Type-2 Diabetes is quite common among Asian Indian women that creates Insulin resistance along with disallowing blood sugar to enter into cells and thus affecting the energy level. It is often believed that high weight and calorie rich diet along with genetics play an important role in increasing the chances of diabetes. There is no denying that Asian Indian women are on a healthier side because of high consumption of oily and rich food stuffs. Their living standard and life style also makes things difficult for them in the short as well as in the long run (Ramachandran, V ijay, 1999). The assignment aims at highlighting health care problems pertaining to diabetes in an informative and analytical manner along with offering solutions and measures to control its impact and influence. For this purpose, Precede Proceed Model would be used to increase the effectiveness of study. The whole idea is to understand the health pattern, health issues and health resistance of Asian Indian Women in context to diabetes. Health Care Problems The rise of diabetes cases among South Asian Indian women is often considered as an alarming sign in the health communities across the world. People of South Asian community carry diabetes and heart attack risks more than any other ethnic community across the world. As per Nishan Wijenaike (2007), diabetologist consultant in West Suffolk Hospitals, United Kingdom, diabetes problem is quite common in Asian Women because of insulin resistance and obesity issues. Insulin resistance is closely associated with the obesity that often i ncreases the weight along with other health complications like heart problems and kidney failures. There is no denying that diet and lifestyle plays a major role in diabetes often responsible for its aggravation in the short as well as in the long run. The high fat diet and low level of physical activities increase the body weight supporting the insulin resistance and affecting the body glucose and energy level in a negative manner. Diabetes is a chronic disease caused due to genetic factor and a mixture of urbanization factors like high calorie diet, less physical activities, limited access to greenery and fresh air and imbalanced diet. Women suffering from diabetes can only be educated and motivated to minimize its impact along with controlling it using effective measures like proper diet and healthy living (Sriskantharajah Kai, 2006) At the same time, it is important to create awareness among women not suffering from diabetes but having chances of getting affected by it in the fu ture. It is believed that precaution is better than cure and thus there is a need of an effective diabetes control program creating awareness along with motivating Asian Women in an exemplary manner. There is a need to create awareness at the community level along with including health care communities and women to discuss the diabetes issue along with coming up with solutions to minimize its

Franklin Pierce Essay Example for Free

Franklin Pierce Essay Franklin Pierce (November 23, 1804 – October 8, 1869) was the 14th President of the United States, serving from 1853 to 1857, an American politician and lawyer. To date, he is the only President from New Hampshire. Pierce was a Democrat and a doughface (a Northerner with Southern sympathies) who served in the U. S. House of Representatives and Senate. Later, Pierce took part in the Mexican-American War and became a brigadier general. His private law practice in his home state, New Hampshire, was so successful that he was offered several important positions, which he turned down. Later, he was nominated for president as a dark horse candidate on the 49th ballot at the 1852 Democratic National Convention. In the presidential election, Pierce and his running mate William R. King won by a landslide in the Electoral College, defeating the Whig Party ticket of Winfield Scott and William A. Graham by a 50% to 44% margin in the popular vote and 254 to 42 in the electoral vote. According to historian David Potter, Pierce was sometimes referred to as Baby Pierce, apparently referring to both his youthful appearance and his being the youngest president to take office to that point (although he was, in reality, only a year younger than James K. Polk when he took office). Pierce attended school at Hillsborough Center and moved to the Hancock Academy in Hancock at the age of 11; he was transferred to Francestown Academy in the spring of 1820. In fall 1820, he entered Bowdoin College in Brunswick, Maine, where he participated in literary, political, and debating clubs. There he met writer Nathaniel Hawthorne, with whom he formed a lasting friendship, and Henry Wadsworth Longfellow. He also met Calvin E. Stowe, Seargent S. Prentiss, and his future political rival, John P. Hale, when he joined the Athenian Society, a group of students with progressive political leanings. In his second year of college his grades were the lowest of his class, but he worked to improve them and upon graduation in 1824 ranked third among his classmates. In 1826 he entered a law school in Northampton, Massachusetts, studying under Governor Levi Woodbury, and later Judges Samuel Howe and Edmund Parker, in Amherst, New Hampshire. He was admitted to the bar and began a law practice in Concord, New Hampshire in 1827. Pierce served as President from March 4, 1853, to March 4, 1857. He began his presidency in a state of grief and nervous exhaustion. Two months before, on January 6, 1853, the President-elects family had boarded a train in Boston and shortly thereafter were trapped in their derailed car when it rolled down an embankment near Andover, Massachusetts. Pierce and his wife survived, merely shaken up, but saw their 11-year-old son Benjamin crushed to death. Jane Pierce viewed the train accident as a divine punishment for her husbands pursuit and acceptance of high office. Pierce chose to affirm his oath of office rather than swear it, becoming the first president to do so; he placed his hand on a law book rather than on a Bible while doing so. He was also the first president to recite his inaugural address from memory. In it Pierce hailed an era of peace and prosperity at home and urged a vigorous assertion of US interests in its foreign relations. The policy of my Administration, said the new president, will not be deterred by any timid forebodings of evil from expansion. Indeed, it is not to be disguised that our attitude as a nation and our position on the globe render the acquisition of certain possessions not within our jurisdiction eminently important for our protection. The nation was enjoying a period of economic growth and relative tranquility. The Compromise of 1850 seemed to have calmed the storm about the issue of slavery. When the issue flamed up early in his administration, though, Pierce did little to cool the passions it aroused, and sectional fissures reopened. The greatest challenge to the countrys equilibrium during the Pierce administration, though, was the passage of the Kansas-Nebraska Act in 1854. It repealed the Missouri Compromise and reopened the question of slavery in the West. This measure, sponsored by Senator Stephen A. Douglas, had its origins in the drive to facilitate the completion of a transcontinental railroad with a link from Chicago, Illinois to California through Nebraska.

Tourism and San Jose Essay Example for Free

Tourism and San Jose Essay The World Tourism Organization defines tourists as people who travel to and stay in places outside their usual environment for not more than one consecutive year for leisure, business and other purposes not related to the exercise of an activity remunerated from within the place visited. Tourism has become a popular global leisure activity. In 2004, there were over 763 million international tourist arrivals. The Philippine tourism started on the year 1970 and began to grow. As of January-September 2009 the government recorded 5. million tourists visiting the country. The Hospitality industry plays a big role in the tourism of the Philippines through resorts, hotel, restaurants and even cruise ships. Montalban is one of the municipalities under Rizal Province. This area is declared one of the tourist spots in the Philippines because of its growing tourism. Behind the rising tourism in Montalban, the researcher’s objective is to know what are the hindrances encountered that can affect the tourism in Montalban. The researcher’s also aim to touch the minds and hearts of the local people especially the government officials to preserve, conserve and develop the area for the next generation. The researchers believed that knowing and understanding this gathered information on the current status and problems will help the local people and the government officials to be aware and be conscious of their environment. Tourism is one of the worlds fastest growing industries as well as the major source of foreign exchange earning and employment for many developing countries. Tourism is vital to the well being of many countries, because of the income generated by the consumption of goods and services by tourists, the taxes levied on businesses in the tourism industry and the opportunity for employment and economic advancement by working in the industry. Background of the Study Tourism is a complex social, cultural and economic phenomenon and one of the most significant global phenomena, not to say the worlds largest industry as many claim. Tourism is an eye opener to generate income among people. The government tends to increase the tourism but because of tourist activities the tourist areas can be destroyed. At present Montalban is known for its beauty and cultural life. Local people have own ways of living and they depend on the area the province of Rizal spans for 130,383 hectares. Montalban makes up 26. 8% on the entire province of Rizal, housing 11 barangays. The land mass of Montalban is big enough to be an ideal place for many purposes, such as agriculture, commerce such as the Avilon Zoo, and hiking and climbing spots of Wawa Gorge, relocation of communities (having a strategic position east of Rizal, and a lot of areas where low cost housing projects can be put up), subdivision areas for either low-,mid-,high-cost housing, and also for special uses (such as the landfill). Purpose of the Study The research is conducted for people to know the negative impacts of tourism in San Jose, Montalban. This is important because the negative impacts of tourism could affect the environment, economic and cultural status of the people. This research could bring information on how to improve the area for a better business establishment and for job opportunities. Statement of the Problem What are the possible problems of tourism in San Jose, Montalban? What are the solutions to the possible problems of tourism in San Jose, Montalban? Significance of the Study This study †Current Status and Problems of Tourism in San Jose, Montalban as perceived by the Local Government Officials is needed and will give a big help in opening the eyes of the people to be aware of the negative impacts brought by tourism. Local Barangay – this study may help them to implement rules and regulation and suggest on the things to improve within the area. Local people – this study may help them realize and contribute on the things that are needed to be done in the area to maintain its beauty Researchers – this may serve as an eye opener for the researchers to be conscious enough and be aware of the impacts of tourism which can be beneficial or harmful. This will also give ideas and knowledge through the experience that happen during the research. Assumptions According to the observation, the researchers analyze that the major problem of San Jose, Montalban regarding tourism is that the tourism areas are not well develop. The researchers perceived that the Local government should raise funds to improve and develop the area for future businesses. Scope and Delimitation The study focuses on the current studies, issues and problems of tourism industry faced by Montalban as perceived by the local government official in San Jose, Montalban. It was only conducted in San Jose, Montalban. To support the study, the researchers distributed questionnaire to the government officials. The respondents were asked to rate the present status of San Jose, Montalban in terms of transportation, tourist attractions, facilities, infrastructures, accommodations. They were also asked about the possible problems that were encountered by local government and also the solutions on the negative impacts of tourism in San Jose, Montalban. The study only covers the age, gender, civil status, position, educational attainment and length of service. Conceptual Framework Focus of the study is the status and problems of the tourism industry of San Jose, Montalban. The first frame which is the input includes the profile of the respondents such as name, age, gender, residence, status, position, years of service and educational attainment, also the status assessment of the tourism industry of San Jose, Montalban, in terms of transportation, facilities, accommodation, facilities and attraction. The second frame shows the process which includes the administration of the questionnaire checklist to the respondents and the analysis and interpretation of data.

What is scalability ?

What is scalability ? ABSTRACT: The rapid development of large clusters built with commodity hardware has highlighted scalability issues with deploying and effectively running system software in large clusters. The concept of scalability applies to business and technology. In this the base concept is consistent i.e., the ability for a business or a technology to accept increased volume without impacting the revenue variable costs. For example in some cases the variable cost will increase and reduce the revenue variable costs. INTRODUCTION TO SCALABILTY: It is a performance measure for the execution of the software that refers to its ability to accommodate expanding traffic measures like number of users, activity of each user and so on. In telecommunications and software engineering, scalability is a desirable property of system, network, process which indicates its ability to either handle growing amounts of work in a graceful manner or to be readily enlarged. For example, it can refer to the capacity of the system to increase total throughput under an increased load when resources are added. Scalability is generally difficult to define and in some case we define the specific requirements for scalability on some important dimensions. It is a highly significant issue in database, routers and networking. Scalable system is the system whose performance improves after adding hardware proportional to the capacity added is called scalable system. An algorithm, design, networking protocol, program or other system is sad to scale if it is suitably efficient and practical when applied to large situations. If the design fails when the quantity increases then it does not scale. IMPORTANCE OF SOFTWARE SCALABILITY: Software scalability analysis is an important issue for most businesses. It is essential that as the customer base increases, the system has to deal with significantly increased loads, the system is designed to handle the increased traffic so that the users do not encounter unacceptable system performance. Scalability is an important goal for many software development projects and software installations because without scalability success might be hampered by poor performance as observed by end users. MEASUREMENT FO SOFTWARE SCALABILITY: The various dimensions by which the scalability can be measured are: Load scalability: it is the ability of a distributed system to easily expand and contract its resource pool to accommodate heavier or lighter loads. Geographic scalability: It is the ability to maintain performance, usefulness, or usability regardless of the expansion from concentration in the local area to a more geographic pattern. Administrative scalability: The ability for an increasing number of organizations to easily share a single distributed system. Functional scalability: The ability to enhance the system by adding new functionality at minimal effort. DESIGN FOR SCALABILITY: It is often advised to focus system design on hardware scalability rather than on capacity. It is typically cheaper to add a new node to a system in order to achieve improved performance than to partake in performance tuning to improve the capacity that each node can handle. But this approach can have diminishing returns (as discussed in performance engineering). For example: suppose a portion of a program can be sped up by 70% if parallelized and run on four CPUs instead of one. If ÃŽ ± is the fraction of a calculation that is sequential, and 1 − ÃŽ ± is the fraction that can be parallelized, then the maximum speed up that can be achieved by using P processors is given according to Amdahls Law:. Substituting the values for this example, we get If we double the compute power to 8 processors we get Doubling the processing power has only improved the speedup by roughly one-fifth. If the whole problem was parallelizable, we would, of course, expect the speed up to double also. Therefore, throwing in more hardware is not necessarily the optimal approach. WEAK v/s STRONG SCALING: In the context of high performance computing there are two common notions of scalability. The first is strong scaling, which is defined as how the solution time varies with the number of processors for a fixed total problem size. The second is weak scaling, which is defined as how the solution time varies with the number of processors for a fixed problem size per processor. EXAMPLES: A scalable online transaction processing system can be upgraded and can be used to produce more transactions by means of adding new processors, devices and storage that can be upgraded easily. It is also called as database management system. If the size of the necessary routing table on each node grows as O (log N) then the routing protocol is considered as scalable with respect to the network size where N is the number of nodes in the network. The distributed nature of the Domain Name System allows it to work efficiently even when all hosts on the worldwide Internet are served, so it is said to scale well. Some early peer-to-peer implementations of Gnutella had scaling issues. Each node query flooded its requests to all peers. The demand on each peer would increase in proportion to the total number of peers, quickly overrunning the peers limited capacity. Other P2P systems like Bit Torrent scale well because demand on each peer is independent of the total number of peers. There is no centralized bottleneck, so the system may expand indefinitely without the addition of supporting resources. SCALE VERTICALLY v/s HORIZONTALLY: Methods of adding more resources for a particular application fall into two broad categories: 1) SCALE VERTICALLY( SCALE IN): To scale vertically (or scale up) means to add resources to a single node in a system, typically involving the addition of CPUs or memory to a single computer. Such vertical scaling of existing systems also enables them to leverage Virtualization technology more effectively, as it provides more resources for the hosted set of Operating system and Application modules to share. Taking advantage of such resources can also be called scaling up, such as expanding the number of Apache daemon processes currently running 1) SCALE HORIZONTALLY (SCALE OUT) To scale horizontally (or scale out) means to add more nodes to a system, such as adding a new computer to a distributed software application. An example might be scaling out from one web server system to three. As computer prices drop and performance continues to increase, low cost commodity systems can be used for high performance computing applications such as seismic analysis and biotechnology workloads that could in the past only be handled by supercomputers. Hundreds of small computers may be configured in a cluster to obtain aggregate computing power which often exceeds that of single traditional RISC processor based scientific computers. This model has further been fuelled by the availability of high performance interconnects such as Myrinet and InfiniBand technologies. It has also led to demand for features such as remote maintenance and batch processing management previously not available for commodity systems. The scale-out model has created an increased demand for shared data storage with very high I/O performance, especially where processing of large amounts of data is required, such as in seismic analysis. This has fuelled the development of new storage technologies such as object storage devices. TRADEOFFS: There are tradeoffs between the two models. Larger numbers of computers means increased management complexity, as well as a more complex programming model and issues such as throughput and latency between nodes; also, some applications do not lend themselves to a distributed computing model. In the past, the price differential between the two models has favoured scale out computing for those applications that fit its paradigm, but recent advances in virtualization technology have blurred that advantage, since deploying a new virtual system over a hypervisor (where possible) is almost always less expensive than actually buying and installing a real one. CONCLUSION: Scalable system software has become an important factor to the RCF for efficiently deploying and managing our rapidly growing Linux cluster. It allows us to monitor the status of individual cluster servers in near-real time, to deploy our Linux image in a fast and reliable fashion across the cluster and to access the cluster in a fast, parallel manner. Because not all of our system software needs can be addressed from a single source, it has become necessary for us to use a mix of RCF-designed, open-source and vendor-provided software to achieve our goal of scalable system software architecture.

Pricing Websites For Sale :: Sell Websites Buy Websites

Pricing Websites For Sale Reprinted with permission of VotanWeb.com As a market leader in existing website sales, VontanWeb receives many questions about valuing websites. It always amazes me how some website owners come up with the value of a website being sold. No wonder many websites never sell. In many instances no consideration is given to the total picture. Will the available cash flow of the website be able to pay the debt of a loan to purchase the website? Will the website as priced be attractive to financing sources? I have seen many â€Å"professional website valuations† where the price just doesn’t make sense – and sellers wonder why buyers are not standing in line to purchase their website. Market Approach There is a solution that is grounded in the fundamentals of economics, and time tested in the marketplace, where the influences of supply and demand ultimately determine where a website belongs on the price scale. One economist explains this market approach by comparing a business to a machine which has the purpose of making money: The more money it makes, the more it is worth. This is why there is greater demand for very small and profitable websites with few hard assets, than there is for large, popular and high maintenance websites that generate a huge cash flow, but can’t make a living for its owner. Adjusted Net Income The first category of information needed is called adjusted net income, and is the total amount of cash produced by the â€Å"money machine.† Of course, this figure includes the website profits and the owner’s salary. It’s important to remember that the adjusted net income should also include all of the many cash-related benefits which are enjoyed by the website owners. Those benefits may include the use of a car owned by the website, the website-paid premiums for health, life and auto insurance, website paid memberships to country clubs and spas, travel and entertainment expenses that are actually vacation and taking the wife out to eat expenses. Don’t forget expenses for high speed internet and cable TV that are needed for the website but also provide entertainment for the whole family. There are many, many other hidden personal expenditures in any typical website business, subscriptions to magazines, gifts for your wife and girlfriend and similar †Å"business expense† categories. Interest expense should also be added to adjusted net income, along with accounting entries—such as depreciation and amortization—that can divert money to the owner’s pocket so that it never appears on the bottom line of the P & L.

High School vs College for a Disabled Student :: Compare High School and College

If you are a disabled high school graduate you may be confused by the changes with which you are faced and unsure what to expect as you prepare for college. Realistically, the transition from high school to college requires a period of adjustment for all students since the academic demands are different in the two environments. However, the transition for students with disabilities requires special preparation in order to progress smoothly. During the high school years, much of the responsibility for accommodating your disability fell to school personnel, and your parents served as your primary advocates. Even though you were required to participate in case conferences and the implementation of your Individual Education Plan (IEP) you may have felt more on the "sidelines." As you transition to college, your parents no longer serve as your primary advocates and you are asked to assume this role. It is important you understand you will be expected to seek out the services you need, provide adequate documentation of your disability, self-identify your need for accommodations, and follow-through with your assigned responsibilities in the accommodation process. Some of the confusion surrounding the transition from high school to college for students with disabilities can be traced to the fact that colleges and high schools are governed by different laws. The Individuals with Disabilities Education Act (IDEA) is no longer applicable as students transition to college and IEP’s, mandated by IDEA, are no longer required at the college level. Even Section 504 of the Rehabilitation Act of 1973 (Section 504) has different provisions for colleges than were in place for K-12 schools. IDEA and Section 504 mandate K-12 schools provide assessments to identify students with disabilities; however, when students enter college they bear the responsibility for providing evidence of their need for specific accommodations.

Spider man Essay -- essays research papers

We all have heard of Spider Man. He was the average teenager until he was bitten by a radioactive spider. I like Spider Man but I believe there are a lot of things missing in his movies. The police and government are portrayed poorly, as to assisting Spider Man or lack there of. Spider Man goes about doing his own thing, outside of the law. He is something we can all relate to and I believe that is why a lot of people like him. Most people would say they want to be like Spider Man because of his cool super human powers. I believe it would be a lot of hard work, dedication, and a lot of responsibility. Think about this, you would have two lives to live as a completely different person. You would have to keep up good grades, make some money to live on, support your family in one life, then save people, fight crime, and kill villains in the other life. It would be way to overwhelming for me.   Ã‚  Ã‚  Ã‚  Ã‚  To fight crime, Peter needs a costume and a mask of some sort to hide his identity. He is a pretty good artist and draws his costume that he wants. Since Peter doesn’t have much money, he decides to make his own costume. My question is how Peter could possibly know how to make a spandex costume to fit him perfectly, and look awesome without any flaws? Just because he has super human powers doesn’t mean he can design and make a costume as perfect as his. I don’t think a lot of people take this into consideration. But if Peter had it made by a company of some sort, it would be fairly easy to trace and find who owns/ordered the costume. I think the creators knew about this, but didn’t know how to solve the problem so they just kind of skipped it. On the other hand, I like how the creators of Spider Man didn’t give him an endless budget, like Batman.   Ã‚  Ã‚  Ã‚  Ã‚  Bruce Wayne was a poor kid from a poor city. His family was killed and he decides to fight crime, similar to Spider Man. Only Batman, some how got extremely rich to own his own cave, custom Bat Mobile, and have some sweet gadgets. I don’t know a lot about Batman, but I know enough that money doesn’t grow on trees. Besides, even if he did get the money reasonably, there would be other flaws. For example, there is no way he built his car him self. He had to have had a body shop customize it. And if this were the case, it wouldn’t be too hard for Joker or someone to find out... ... his uncle would still be alive, and he would still have a best friend.   Ã‚  Ã‚  Ã‚  Ã‚  Throughout the movies Spider Man and Spider Man 2, Peter Parker struggles with his grades and jobs. I am currently in school, and have a part time job so I know that there is a lot of work to achieve. Peter Parker on the other hand, has my same situation, plus he has to try and save the entire City. I think that there is no way humanly possible to maintain good grades and keep his job when you have an alternate Super ego. You wouldn’t have the time to study unless you didn’t go to sleep and if you try and study and then sleep, you wouldn’t have enough time to save the city. It might work if you saved the city while you were studying, but multi tasking wouldn’t work very well while saving people’s lives.   Ã‚  Ã‚  Ã‚  Ã‚  In conclusion, Spider Man is a very unrealistic super hero. There is no way someone would put their family and friends in danger by being the city’s super hero. The police and government would surely have you arrested and/or killed for making unwarranted arrests. No matter how unrealistic Spider Man is, he is the most realistic of all the other heroes.

Australian Beverages Limited

Exam case Australian Beverages Limited Pre-seen information Semester 1 2010 Australian Beverages Limited — Pre-seen information A. Introduction to Australian Beverages Limited — March 2010 Australian Beverages Limited (ABL) commenced soft drink manufacturing in 1937. During the 1970s and 1980s, the company expanded its beverage portfolio by entering into other non-alcoholic beverage categories, such as fruit and milk-based drinks. Entry into the snack food market was recently undertaken in response to declining consumption of carbonated soft drinks (CSDs), the company’s traditional area of business strength. This move also enabled ABL to leverage its strong distribution capabilities to supermarkets, convenience stores and hospitality channels by adding adding such complementary food products to non-alcoholic beverages. Nevertheless, CSDs still accounted for 90 per cent of company revenue in 2004. Tom Dwyer, the current managing director, has been with the company since 2005. He joined the company at a time when CSD growth was stagnating and shareholder confidence in the company was waning. This had resulted in the share price declining by 15 per cent in the two years prior to his appointment. In order to restore shareholder confidence, Dwyer established a strategic planning team within the company to assess the current product portfolio and identify organic and acquisition growth opportunities. From this review the importance of operational excellence was identified and strong investment was made in world class manufacturing facilities and systems. Process re-engineering was implemented to reduce costs of manufacture and time to market. Having finalised the integration of a snack food business acquisition just over 12 months ago, Dwyer is now aware that he needs to identify further growth options given predicted continuing decline in the CSD market. In January 2010 he asked the strategic planning team to undertake another detailed review of opportunities for future growth, specifically identifying products and markets where the company would have the capabilities for successful entry. Bottled water was one industry that was identified, based on its complementary nature to the existing beverage portfolio. This industry had been identified as ‘of interest’ in the ABL’s first strategic review in 2005. At that time the market was deemed too small and unsophisticated. However, the Australia bottled water manufacturing industry has grown significantly since this initial review. Dwyer has requested a detailed review to determine whether entry into the domestic bottled water manufacturing industry is now a viable strategic option. If deemed to be a viable strategic option, Dwyer also wants a recommendation whether the ABL should enter the industry by establishing its own operations or by targeting an existing competitor for acquisition in order to gain immediate market share. B. The Australian bottled water manufacturing industry 1 Bottled water is the fastest growing category in the non-alcoholic beverage market in Australia, with sales revenue of $1. 483 billion in 2009. The major segments of the industry include bottled still and sparkling water. Within these two segments, different packaging sizes and types are offered. Water can be purchased in a range of single or multi-serve bottles including 600 millilitre, 1 litre or 5 litre bottles from the supermarket or convenience store. Bottled water is also available in bulk packs (that is: 10 litres or greater) for water coolers for home or office use. Different types of water also exist, from naturally sourced sparkling mineral waters to purified 2 and specialty waters. Manufacturing facilities for purified water are generally located in close proximity to major water utility suppliers to minimise the transport distance from the water source to the purification plant. In contrast, most sparkling mineral water manufacturing plants are necessarily concentrated in close proximity to high quality mineral springs where the product is bottled at source, usually in regional locations. The bulky and relatively low value of the product as well as the high costs of transport mean that the manufacturing and distribution plants need to be located where there are major population centres. The Australian bottled water manufacturing industry is currently in a growth stage. Growth has been achieved due to the increase in per capita consumption of bottled water, albeit from a relatively low base compared with other more established beverages. As consumers become more health conscious and change their drinking habits away from CSDs to healthier beverages, bottled water would increasingly become their drink of choice. 1 2 All figures are for the year ended 31 December unless otherwise stated. Purified water is water that has been produced by distillation, deionization, reverse osmosis or other suitable processes. Page 1 of 21 As a result, sales of bottled water are expected to increase. Of particular significance in the industry has been the large number of new products that have been launched and accepted by consumers since 2005, making bottled water a dynamic and fast growing industry. 1. Evolution of the Australian bottled water manufacturing industry 3 A relatively new industry, the Australian bottled water manufacturing industry evolved out of the soft drink manufacturing industry during the 1990s. Soft drinks are those that do not contain alcohol. Soft drinks are distinguished from hard drinks—beverages such as distilled spirits, beer or wine—by the simple fact that they do not contain alcohol. Given bottled water is a category within the broader non-alcoholic beverage industry, trends impacting this broader industry also impact on bottled water. Total non-alcoholic beverage revenue in Australia was over $10 billion in 2009, including CSDs, bottled water, fruit juices, energy drinks, sports drinks 4, ready to drink teas and milk beverages. Table 1 shows the market share of bottled water within non-alcoholic beverages over the past 10 years and predicted market share to 2014. Table 1: Australian non-alcoholic beverages – market share of volume by category- 1999 to 2014 Category Diet CSDs Full calorie CSDs CSDs Bottled Water Milk Drinks* Fruit Drinks** Sports Drinks Ready to Drink Tea/ Coffee Energy Drinks Total non-alcoholic Beverages 1999 16. 70% 46. 10% 62. 80% 6. 40% 8. 20% 20. 70% 1. 50% 0. 40% 0. 00% 2004 16. 50% 41. 30% 57. 80% 9. 50% 9. 60% 18. 80% 2. 20% 1. 70% 0. 40% 2009 16. 30% 34. 70% 51. 00% 13. 30% 11. 90% 16. 90% 3. 70% 2. 00% 1. 20% 2014 (P) 16. 10% 25. 30% 41. 40% 17. 40% 16. 00% 14. 80% 5. 0% 2. 90% 2. 50% 100. 00% 100. 00% 100. 00% 100. 00% P = Projection * Includes white and flavoured full fat, skim and soy milk beverages ** Includes fruit juice and fruit drinks Australians consumed 963 million litres of bottled water in 2009. However, Australia consumption of bottled water is significantly lower as compared with the total consumption of the top 10 global bottled water consuming countries. Table 2 shows Australia’s per ca pita consumption compared with that of the highest consumption per capita countries in the world. When compared to similar markets, such as the United States, Italy, France and Spain, this data suggests that the Australian market has potential for a higher rate of consumption and sales growth before it reaches maturity. It needs to be noted, however, that the drivers for bottled water consumption can differ. The climate or lack of clean drinking water impacts on consumption levels in countries such as Mexico and the United Arab Emirates. However, in Italy, France and Austria, for example, consumption of bottle water is driven by fashion. A recent report by the Global Earth Policy Institute concluded that global consumption of bottled water rose 56. 8 per cent to 164 billion litres from 2005 to 2009. Table 2: Global bottled water consumption: Litres per capita – 2005 and 2009 Country Italy Mexico United Arab Emirates France Spain Germany Switzerland United States Australia Global Average 2005 170. 3 128. 7 120. 7 129. 0 112. 0 110. 8 99. 1 70. 0 35. 3 17. 9 2009 202. 0 185. 4 179. 9 155. 8 140. 3 137. 4 109. 5 89. 6 45. 5 26. 6 Total % Change 18. 6% 44. 1% 49. 0% 20. 8% 25. 2% 24. 0% 10. 5% 28. 0% 28. 9% 48. 6% Projection figures for the industry were provided by industry experts at the recent Bottled Water Institute of Australia’s â€Å"Future Focus† conference. Beverage designed to help athletes rehydrate, as well as replenish electrolytes, sugar and other nutrients, which can be depleted after strenuous training or competition. 4 3 Page 2 of 21 Table 3 contains consumption statistics of bottled water in Australia, showing actual consumption for the past seven years and projected consumption for the next six years. Table 3: Australian bottled water consumption, 2003 to 2015 2003 605 30. 6 2004 677 33. 8 2005 715 35. 3 2006 765 37. 2007 825 39. 9 Consumption million litres Consumption per capita (litres) 2008 906 43. 3 2009 963 45. 5 2010 (P) 1024 48. 0 2011 (P) 1089 50. 5 2012 (P) 1159 53. 3 2013 (P) 1235 56. 3 2014 (P) 1316 59. 4 2015 (P) 1398 62. 4 P = Projection Table 4 shows total industry revenue over the past seven years and projected revenue for the next six years for the Australia bottled water manufacturing industry, compared to that of non-alcoholic beverages in total. Historical growth in bottled water has been derived from increases in total consumption, helped along by strong customer acceptance of new products launched over the past five years. The increase in the total Australian population together with an increase in per capita consumption of bottled water has contributed to this historical growth. (Compared with other developed markets, however, growth in the Australian market has been achieved from a relatively low base). These trends are expected to continue in the future. Bottled water will therefore continue to increase as a percentage of the non-alcoholic beverage market. Table 4: Australian bottled water and non-alcoholic beverage revenue – 2003 to 2015 2003 810 $1. 34 7 199 2004 920 $1. 36 7 675 2005 990 $1. 8 8 191 2006 2007 2008 2009 Bottled water revenue $m Bottled water Ave $ per litre Non-alcoholic beverages revenue $m Bottled water % of non-alcoholic beverages 2010 (P) 1 070 $1. 40 8 723 1 200 $1. 45 9 250 1 335 $1. 47 9 648 1 483 $1. 54 10 449 1 660 $1. 62 11 024 2011 (P) 2012 (P) 2 121 $1. 83 12 235 2013 (P) 2 375 $1. 92 12 871 2014 (P) 2 611 $1. 98 13 515 2015 (P) 2 796 $2. 00 14 177 1 877 $1. 72 11 619 11. 3% 12. 0% 12. 1% 12. 3% 13. 0% 13. 8% 14. 2% 15. 1% 16. 2% 17. 3% 18. 5% 19. 3% 19. 7% P = Projection An exception to the identified growth trends, however, is the delivery of bulk water for home and office use. This product type is now in the mature phase of its life cycle. It has experienced low growth over the past five years as more offices and homes install water filters as a result of improvements in filter technology. To counteract the decline in bulk water sales to offices and homes, bottled water manufacturers have developed new distribution channels for bulk water products. Increasingly bulk packs are sold in petrol station forecourts and supermarkets. To date, manufacturing capacity within the industry has meant that manufacturers have been able to meet growing demand using existing manufacturing infrastructure. Production stockpiling has not occurred which has helped manufacturers protect their profit margins. They have been able to achieve an increased weighted average price per litre as all production is generally sold in the year it is produced, reflecting the strong demand growth. The average price per litre has also been influenced by new product launches during the past five years, particularly the range of premium 5 waters and smaller, more convenient packaging sizes that achieve higher average prices. 2. Bottled water manufacturing The Australia bottled water manufacturing industry has similar manufacturing and distribution processes to the non-alcoholic beverages industry from which it emanates. 2. 1 Water supply There are several sources of water for bottling, such as underground springs, wells and water storages. The source of water plays a key role in the quantity and quality of bottled water that is produced. About 25 per cent of all bottled water comes from water storages that is tap water) that is further treated before 5 Premium waters are generally higher priced waters which have higher levels of purity or are sourced from natural springs. Page 3 of 21 bottling at an average price of $2. 40 per kilolitre. The other 75 per cent of water comes from groundwater at an average price of around $1. 00 per kilolitre. In some Australian states, permits are required to extract groundwater. Bottled water manufacturers often contract out the actual extraction of water to external providers. The price of water in Australia compared with other countries and with other products is very low. It has become the subject of debate due to diminishing water supplies caused by extended drought conditions in Australia. To increase water prices would be politically contentious and many consumers would argue that because water is a basic human need it should be free. It is significant to note, however, that Australians pay a thousand times more per litre for bottled water than they do for tap water of similar quality. 2. 2 Treatment Once water has been sourced, the next step is to filter and purify the water to remove organic compounds such as metal ions. These compounds can contribute adversely to the taste and odour of the water and to bacteria that may cause health problems. Some water, mainly mineral water, is naturally carbonated at the source. However, more commonly, carbonation of both spring and purified water takes place in the factory (where both the treatment process and bottling occur). For other drink types (for example sparkling wines or beer) carbonation is achieved naturally during the fermentation of sugar into alcohol. However, for sparkling water, carbonation cannot be achieved through a fermentation process, as no sugar is added. It is therefore achieved by injecting carbon dioxide, into the water under pressure. The pressure increases the solubility of the water and allows more carbon dioxide to dissolve than would be possible under standard atmospheric pressure. When the bottle is opened the pressure is released, allowing the gas to come out of the solution, thus forming bubbles. 2. 3 Bottling and labelling After the water has been treated, and in some cases carbonated, it is transferred (if carbonated, this transfer occurs under pressure) to a filling machine. Here, bottles or bulk containers are filled and then passed by conveyor belt to a sealing machine. Once sealed, the bottles are packed in cardboard boxes for transport. There are currently 22 bottled water manufacturers in Australia certified by Food Standard Australia. Some manufacturers operate on a contract bottling basis only, providing bottling services to companies that have their own brands or to supermarkets which sell private label products 6. However, a number of these bottlers do have brands of their own which they sell. 2. 4 Packaging Bottled water is provided to consumers in a variety of packages. These may be glass, PET plastic (polyethylene terephthalate) or polycarbonate bottles. Water can be purchased in a range of single or multiserve bottles from various outlets and is available in bulk packs for water coolers for home or office use. The technology required to bottle water is quite basic and widely available. However, to achieve the volume of manufacturing required to be cost competitive, the level of capital investment is large. Key improvements in technology have been focused on quality control and automation to meet the need for greater manufacturing efficiencies and the strict health and regulatory standards of food standards that apply across all Australian states and territories. Environmental concerns are rising in relation to the disposal of empty drink bottles. With the increasing amount of water being consumed, the issue of the resultant bottle waste has become significant. In Australia, of the 118000 tonnes of drink bottle plastic used every year, only 35 per cent is recycled. In South Australia, where consumers can redeem a deposit for drink containers, the bottles made up less than 10 per cent of the state's rubbish, compared with 13. 4 per cent nationally. Drink bottles also take up more space than other waste, comprising 38 per cent of total volume of litter. Recycling experts believe that the recycling of empty water bottles is hampered because most bottled water is consumed as a convenience beverage outside the home where recycling bins are not readily accessible. Following the success of reducing the use of plastic shopping bags it is thought that the introduction of a nationwide empty bottle deposit law would create the incentive to recycle bottles. This would also help to ease the burden on taxpayers who pay for the clean-up of litter. Private label products or services are typically those manufactured or provided by one company for offer under another company's brand. Private label goods and services are usually positioned as lower cost alternatives. Page 4 of 21 3. Industry segmentation The Australian bottled water manufacturing industry has two clearly defined segments: †¢ Still water – this segment accounted for 7 6 per cent of consumption volume in 2009. †¢ Sparkling water – this segment accounted for 24 per cent of consumption volume in 2009. 3. 1 Still water Still water is generally consumed for hydration and thirst satisfaction at home, in the office or while travelling. Convenience is a major factor in the growth of the still water segment. It is used: †¢ as an alternative to other packaged beverages when consumers want to moderate their calories intake and seek an unsweetened, clean tasting and natural product. Water is the best and healthiest form of hydration as it is a fat and calorie-free thirst quencher; †¢ when consumers are not satisfied with the aesthetic qualities (for example, taste, odour and colour) of their tap water. Many people wish to drink something that is refreshing, clean and pure, and avoid certain chemicals used in the treatment of public water supplies, such as chlorine and fluoride; †¢ when consumers require the convenience of bottled water for their refreshment. This is especially the case with the development of more widespread leisure activities and the expansion of travel, for both business and pleasure; and †¢ for nutritional and performance benefits, such as near waters 7 and mineral water supplements claiming to have the nutritional components equivalent to a bowl of salad. As shown in Table 5 below, significant growth in bottled still water in Australia has occurred over the past six years, and this has driven most of the growth in the overall industry. As with the industry overall, the average price per litre has increased due to the introduction of premium bottled still waters. Table 5: Revenue and production- Still Water- 2003 to 2015 Type Revenue $million Production million litres Ave $ per litre 2003 555 516 $1. 08 2004 648 584 $1. 11 2005 708 619 $1. 14 2006 780 668 $1. 17 2007 883 720 $1. 23 2008 999 796 $1. 25 2009 1 127 847 $1. 33 010 (P) 1 279 901 $1. 42 2011 (P) 1 472 958 $1. 54 2012 (P) 1 688 1 020 $1. 65 2013 (P) 1 934 1 095 $1. 77 2014 (P) 2 154 1 173 $1. 84 2015 (P) 2 323 1 252 $1. 85 P = Projection 3. 2 Sparkling water Carbonated water was commonly known by the name of soda water until World War II. In the 1950s, new terms such as sparkling water began to be used due to the negative perceptions associated with use of the word ‘car bon’ being considered a chemical additive in water. Sparkling water is essentially still water into which carbon dioxide gas has been dissolved, resulting in the formation of bubbles. Sparkling water is generally consumed as a refreshment beverage mostly while dining out rather than for hydration or thirst satisfaction alone. In the last few years, supermarkets have started to stock premium sparkling water brands. 7 Near Water – also known as functional waters. These are bottled water beverages which have nutrients added, such as fruit juices, vitamins or minerals to enhance the positive health benefits associated with water. Page 5 of 21 Table 6: Revenue and Production:- Sparkling water- 2003 to 2015 Type Revenue ($million) Production (million litres) Ave $ per litre 2003 255 89 $2. 7 2004 272 93 $2. 92 2005 282 96 $2. 94 2006 290 97 $2. 99 2007 317 105 $3. 02 2008 336 110 $3. 05 2009 356 116 2010 (P) 381 123 $3. 10 2011 (P) 405 131 $3. 10 2012 (P) 433 139 $3. 12 2013 (P) 441 140 $3. 15 2014 (P) 457 143 $3. 20 2015 (P) 473 146 $3. 24 P = Projection $3. 07 While experiencing declining growth, sparkling water is still showing some growth, albeit at much lowe r rates than still water. This reflects the refreshment beverage nature of sparking water which is generally consumed at restaurants and cafes rather than in the home. The majority of the sparkling water consumed is comprised of premium imported spring waters, such as Eau de Vivre, which is the world’s premier sparkling water brand. As such, the average price per litre for sparking water is substantially higher than that of still water (see Table 6). This reflects the increased cost of manufacturing required to carbonate the water, different closure types required to retain the carbonation, the cost of imports and the premium nature of this product. The increase in average price over the projection period reflects estimates in foreign exchange movements. Foreign exchange xperts forecast that the current high levels in the value of the Australian dollar are not sustainable and project them to decline in the future. 4. Distribution trends Bottled water is sold by manufacturers to independent wholesalers, including specialist confectionary and soft drink wholesalers as well as grocery wholesalers. Figure 1 below illustrates the current industry distribution channels. Figure 1: Australian bottled water distribution channels – 2009 Manufacturer Wholesaler Supermarket Convenience stores Direct Distribution Hospitality Home & office Delivery Vending machines Other End Consumer In the past few years, retailers have been increasingly buying direct from the manufacturer to reduce the cost of goods by eliminating the wholesaler margin from their purchase price. This has been facilitated by improved information systems that now provide timely information to manufacturers for production planning, thereby enabling them to engage in direct sales to a larger numbers of customers. The increase in direct distribution has been most notable amongst major industry competitors. Major retailers want to purchase from fewer, larger companies. Beverage wholesalers, however, still play an important role in distribution for smaller bottled water manufacturers. These smaller competitors generally have a smaller product range and are unable to meet major retailer demands for inventory management and direct to store delivery. Page 6 of 21 Table 7 shows the share of revenue in 2009 by distribution channel. Table 7: Major distribution channels share of revenue- 2009 Distribution channel Supermarkets and grocery wholesalers 2009 35. 0% 30. 0% 15. 0% 9. 0% 6. 0% 5. % 519 445 222 133 90 74 Revenue ($m) Comments Supermarkets use online ordering systems direct to manufacturers, bypassing wholesalers in general. Major growth in this channel reflecting convenience purchasing. Main outlet for the purchase of single-serve products. Dominated by higher priced spring and mineral waters, including imported products. Bulk packaged water is the main product through this channel. Placed in schools, sports clubs and other public places or venues . Niche value added brands only due to high transportation costs (e. g. exports) or specific to single distribution channels. Convenience stores (including petrol stations) Hospitality Home and office delivery Vending machines Other Branding is an important differentiator in the bottled water manufacturing industry. Existing competitors that have established brand names have an advantage over new entrants who have to spend heavily on marketing for brand recognition. Sales in convenience stores have always been an important distribution channel for soft drinks. This importance is growing, not only for soft drinks but also for bottled water, driven by the trend in more frequent convenience shopping for ‘time-poor’ consumers. Success in the convenience store channel is critical for any new product to succeed. If the brand recognition is achieved, it is often quickly followed with brand extensions, leveraging the brand to offer new flavours and packaging. Once consumer demand is established in the convenience store channel, the move into the supermarket channel generally supports maintenance of profit margins, considering that supermarket buyer power is reduced when strong product demand has been established. Manufacturers have had to respond to significant changes in consumer buying behaviour. Product distribution, presentation and availability has had to match these changes in order to maximise sales. Increasing quantities of product are now distributed through convenience stores and petrol stations. For example, bulk water packs were once sold via direct sale to offices. However, as more offices have installed their own in-built water filters, this channel has declined and there has been a shift to bulk water sales through petrol stations and supermarkets. A key strategy employed by non-alcoholic beverage manufacturers to lock out rivals is the placement of vending machines and refrigeration units in distribution outlets. This ensures that their products are stocked and presented for the best possible sales whilst making it difficult for competitors to get refrigeration space. The distribution outlet has to invariably agree not to stock competitor products as part of the terms of using the refrigeration equipment supplied. Vending machines are increasing in variety, size, style and sophistication, depending on where they are located. Distributors in some locations, such as private or non-government schools, have worked with the manufacturers to introduce the use of smart card technology for payment and therefore avoid the need for cash. Similarly, in the hospitality arena, manufacturers have to tender for the supply of beverages to key entertainment and sporting venues. Once a manufacturer has secured a contract with a venue, their product has guaranteed sales for a defined period of time. Quite often, patrons are not allowed to bring in their own beverages for consumption or are limited in the amount they are allowed to bring in. Hospitality, through restaurants and cafes, is the main distribution channel for sparkling waters and it is also common practice for venues to be locked into one particular manufacturer. Exports and imports represent about 5 per cent of industry production. These levels are not expected to change in the future due to the high cost of transporting the heavy weight and bulk of water. The Australian bottled water manufacturing industry is protected to some extent from the threat of water imports due to the high volume and low unit value of water, even though water with no additives is exempt from tariffs. For water that has added sugar or other sweeteners, there is a 5 per cent import tariff. The main distribution channel for imported waters is cafes and restaurants that primarily serve premium sparkling waters. Page 7 of 21 5. Demand trends Bottled water is a growing part of the non-alcoholic beverages industry. While the broader non-alcoholic beverages industry is growing, bottled water is growing at a faster rate due to increasing awareness of health issues. Research shows that people want better tasting and healthier alternatives to many of the soft drinks and sports drinks currently available. Market research surveys suggest that over 90 per cent of Australians consume too many sugary and caffeine-based drinks. As bottled water is part of this larger beverages industry, it is important to understand firstly, the trends impacting on non-alcoholic beverage consumption overall, as well as the trends specifically impacting on bottled water consumption. 5. 1 Non-alcoholic beverages Consumption of non-alcoholic beverages in Australia increased from 179. 7 litres per capita in 2005 to 228. 5 litres per capita in 2009. Per capita consumption trends for all non-alcoholic beverages generally follows consumption patterns in the United States. On that basis, there are still significant opportunities for growth in all non-alcoholic beverages, including CSDs. Currently, Australian per capita consumption is 63 per cent of the US consumption level. Increasing awareness of the obesity problem in Australia, as well as the firmly established focus toward health and wellbeing, is ensuring strong future growth for ’healthy’ beverages. This has resulted in the introduction of sugar-free or diet CSDs. However, many older Australians are not switching to sugar-free versions of the CSDs they used to drink. Instead, they are moving to alternative beverages. Hence the general decline in the consumption of CSDs has also been accompanied by a rise in the consumption of beverages that are perceived to be healthy, such as fresh fruit juices, flavoured milks, energy drinks, sports drinks and ready-to-drink teas. Changing lifestyle trends, health consciousness and a growing ‘cafe culture’ have also contributed to an increased demand for these alternative beverages. For example: †¢ Freshly squeezed fruit juices, with fresh flavour attributes being preferred by the consumer. With the emergence of juice bars and a greater focus by manufacturers in establishing juice brands, consumption of juice products has increased. In the United Kingdom and United States, juice bar sales represent about 5 per cent of total juice sales in those countries. However, in Australia, juice bars are still only an emerging distribution outlet and offer a good opportunity for new product development and growth. Ready-to-drink teas, with their antioxidant properties being promoted, have become a popular ‘health’ drink. The Australian market for this product is currently 2 million litres per annum and predicted to grow to as much as 20 million litres over the next few years, particularly as the Australian population ages. Product development includes a variety of flavoured ready-to-drink teas. †¢ Flavoured milk is a growth beverage. Data shows that A ustralians are each drinking, on average, nearly 0. litres more flavoured milk per annum than a year ago. Perceived health benefits of milk have contributed to this growth, and this is expected to drive continued growth in the future. Milk sales have increased by 6. 7 per cent with low fat brands performing particularly well. Last year, each Australian, on average, drank 9. 5 litres of flavoured milk – more than the per capita figure for any other country. †¢ Both energy 8 and sports drinks 9 are growing products in a society that is increasingly health conscious and aspiring to be more active. Energy drinks have had double digit growth since 2006 and the sports drink market has grown 14 per cent on volume and 20 per cent on revenue compound annual growth over the last three years. 8 Beverages that are designed to give the consumer a burst of energy by using a combination of methylxanthines (including caffeine),vitamins and herbal ingredients. 9 Purified water with additives similar to those of sports drinks with the aim of providing hydration during sport. Page 8 of 21 5. 2 Bottled water Bottled water consumption has increased significantly over the past six years, but is still significantly below consumption levels of other developed countries including Europe and the United States. This indicates further opportunities for growth in Australia, primarily at the expense of CSDs and fruit based drinks, given the rising concern surrounding the link between CSD consumption and obesity, especially in children. One possible reason for the lower per capita consumption of bottled water by Australians is the relatively good quality of tap water available. Tap water contains fluoride ions which have a positive effect on tooth decay. The drinking of bottled water, which is distilled 10 to remove element such as fluoride, is believed to be contributing to an increase in the risk of tooth decay. However, most people continue to cook with tap water and this should provide sufficient fluoride to prevent tooth decay. Alternatively, some people wish to avoid exposure to fluoride, particularly systemic ingestion of fluoride in drinking water, and may choose such bottled water for its absence of fluoride. Nevertheless, surveys show that there is an increasing concern about the quality of tap water in Australia and that this is driving some growth in bottled water consumption. Growth is further supported by concerns about alcohol consumption and associated drink-driving accidents which has encouraged the consumption of non-alcoholic beverages, such as bottled water, when dining out. Females consume about 58 per cent of all bottled water in Australia. Young people, in particular females aged between 18 and 35 years, are the largest consumers of bottled water. In general, bottled water consumers are more health conscious and socially aware. Studies have found that younger generations are far more diligent in drinking their recommended daily intake of water and men are less likely to think about water consumption on a daily basis than women. In addition, for young women, image is an important factor in determining consumption behaviour. Figure 2 shows consumption by age group. Figure 2: Australian bottled water consumption by age group, 2009 30 25. 8 25 20 23 18. 5 14. 8 % 15 10 5 0 9 8. 9 18-24 25-34 35-44 45-54 55-64 65 and older Age group (years) 10 Distillation is the process of eliminating impurities by heating a liquid until it boils, capturing and cooling the resultant hot vapours, and collecting the condensed vapours. Page 9 of 21 Due to the increase in health consciousness, water has also become a fashion accessory. Some consumers now carry a bottle of water with their mobile phone and iPod. Packaging is therefore critical. Small plastic bottles are preferable for many consumers as they are re-sealable, perceived to be more contemporary and can fit in car-cup holders. The convenience factor means that the most popular pack size is around 600 ml, as shown in Table 8 below. This is an important consideration for convenience when travelling for business or leisure. In fact, it is the convenience aspect that has to some extent, driven the growth in bottled water. Table 8: Australian still water revenue share by pack size Pack Size 1999 2004 2009 500 – 750ml 1–2 litre Bulk 47. 3% 22. 8% 29. 9% 52. 3% 27. 5% 20. 2% 57. 3% 32. 6% 10. 1% 2014 (P) 60. 3% 34. 8% 4. 9% P = Projection Increased future consumption of bottled water in the home is likely to result from continued growth in household disposable income in Australia. This disposable income growth will also sustain growth of takeaway foods and restaurant meals, both of which tend to increase consumption of bottled water and fruit juice. However, while currently experiencing positive growth, total household expenditure on consumable goods is expected to slow in the future. This will adversely affect growth in discretionary spending on all beverages. However, a factor which contributes positively to growth in the sales of bottled water is the climate. The gradual warming of Australia’s climate is expected to support further growth in water consumption. Bottled water is well positioned to benefit from the shift in consumer preferences towards healthier and natural drinks. Spring water is particularly popular in Australia because it is perceived to have come from a natural, pristine environment. This is reinforced by marketing that emphasises the pure and natural image of water. As well as purchasing more bottled water, consumers are also prepared to pay more; with 69 per cent of consumers recently surveyed believing quality is more important than price. New product development activities are targeting changing consumer lifestyle needs and the trend towards purchase convenience. There are now numerous bottled water brands available in Australia, from international beverage brands to boutique ‘rain farms'. The huge variety of waters and sources means that the bottled water market has a broad demographic reach. According to a recent consumer survey, at least 99 per cent of all Australians have tried or purchased bottled water in the last 12 months. The Australian bottled water manufacturing industry has pursued sales growth by developing products for niche markets. Smaller producers can supply relatively small segments with specialist or premium products. Given the continuing concern about the use of artificial colourings, flavourings and preservatives, the industry is expected to develop a range of premium products better suited to the demands of the health conscious consumer. For example, pet owners can now buy ‘vitamin-fortified’ water specifically formulated for their canine companion. 6. Costs and gross margins Bottled water has the highest profit margins of all non-alcoholic ready-to-drink beverages. This is due in part to the strong growth that the industry has achieved. Manufacturers are also able to sell all production in a year. Industry rivalry is relatively low, particularly as the major competitors are focused on supplying through different distribution channels. A percentage breakdown of costs in 2009 is as follows: †¢ 55. 2 per cent for purchases of supplies; †¢ 26. 8 per cent for marketing, distribution and selling costs; †¢ 12. 1 per cent for wages; †¢ 4. 1 per cent depreciation and administration costs; and †¢ 1. 8 per cent for utilities and rent. A net margin of 16. 3 per cent was achieved by the industry in 2009. Page 10 of 21 Purchases include water supplies, labels and other packaging materials such as glass and plastic resin bottles and closures which are generally purchased on 5 year contracts. One of the key costs is polyester (PET) resin for bottles; however, there is no forward market 11 for PET resin. As a commodity, PET resin has been subject to price rises over recent years, as the price of oil has increased. This is reflected in the minor decline in gross and net margins experienced by manufacturers in 2009, as shown in Table 9 below. Overall, however, the cost to create bottled water is relatively inexpensive. Therefore, water is a more profitable product than other nonalcoholic beverage categories. Table 9: Five year weighted average industry gross and net margins 2005 2006 2007 Gross margin % Net margin % 31. 3% 16. 6% 31. 9% 16. 9% 31. 1% 16. 5% 2008 2009 30. 7% 16. 3% 31. 5% 16. 7% Current levels of profitability are expected to continue. However, it is noted that as sales through the supermarket distribution channel increase, so too will the buyer power of these large retailers and this may have a negative impact on profitability levels. At a recent presentation, ABL’s managing director, Tom Dwyer, commented: ‘The increasing power of major retailers will squeeze the small competitors in both the food and beverage businesses. Without modern technology, smart systems and economies of scale, it will be very difficult for small manufacturers to generate an acceptable return on capital employed and maintain current levels of profitability. ’ 7. Industry key success factors and future predictions Industry experts summarise the following areas as critical to future success in the Australian bottled water manufacturing industry: †¢ Distribution and lacement: Control of distribution channels through an established and comprehensive network of distribution outlets to gain access to end consumers is essential to ensure timely delivery, low costs and maximised product reach through effective placement. If not operating in a niche market, manufacturers must become a major competitor in the wider market. I n general, a major competitor needs to have at least 20 per cent share of at least one distribution channel. Effective market orientation, product promotion, and advertising: Market research, product development and speed-to-market are important capabilities. Successful competitors need to be able to clearly segment the market and develop products that reflect the requirements of different customer groups. The ability to effectively promote their brand and provide label and packaging design is also important. First movers with effective distribution have an advantage in that new competitors need to spend heavily on marketing to catch up. The effectiveness of strong advertising, a sophisticated distribution chain and a focused strategy is critical in influencing consumer choice. Strong brand names contribute to the appeal of bottled water as an accessory as well as building a product's reputation for quality. Having these attributes allows manufacturers to win market share within particular consumer segments and charge premium prices. Economies of scope: Breadth of product range enables efficiencies in distribution, marketing and administration. Such efficiencies are gained when a competitor uses its manufacturing process to produce a wide range of beverage brands (and possibly also complementary products) which are provided as part of a total solution to the various distribution channel customers. Being a total beverage provider to major customers is becoming more important as these major customers are increasing in concentration and prefer to deal with fewer larger manufacturers. Economies of scale: Economies of scale are very important for a low value product since high volumes must be produced and sold to maintain profitability. Manufacturers must have effective cost controls and access to the most efficient manufacturing and distribution processes, tracking technology and techniques to monitor sales and respond accordingly. Economies of scale are particularly important for competitors who have undifferentiated products. Since unit manufacturing costs are an important element of profitability, it follows that economies of scale, based upon critical mass, are also important. Some manufacturers have commenced contract bottling for smaller industry participants in order to secure manufacturing volumes. †¢ †¢ †¢ 11 A forward market enables producers to lock in prices for a defined period of time, thereby providing certainty of costs. Page 11 of 21 At the recent annual Australian Beverage Congress, Alan Vaughan, an independent industry expert of 30 years’ experience, presented an extensive insight into the bottled water market and its future direction. Vaughan concluded his presentation with this comment: ‘The Australian and global beverage industries are in a period of growth and major transformation. In general, there has been a switch away from carbonated drinks to beverages with less sugar and additional functional benefits. To the younger customer, the older brands are looking a little staid, with bottled water and energy drinks viewed as more cool and exciting. This is reflected in marketing and advertising campaigns. People these days are working harder and have greater commitments. Bottled water and energy drinks are replacing other traditional beverages because they provide refreshment as well as a functional benefit, such as re-invigoration, replenishing hydration and energy levels, improving mental alertness and enhancing concentration. These beverages appeal to everyone from partygoers to office workers, through to truck drivers. ’ C. Industry competition 1. Basis of competition The basis of competition for non-alcoholic drinks are primarily price, convenience and taste. The main basis of competition by which bottled water competes against other beverages, such as CSDs, fruit drinks, sports drinks and energy drinks, is health appeal. Given zero or very low sugar content, both still water and near waters have successfully developed an image of being healthier than other drinks and this has driven growth in the industry. To a degree, home filters also serve as a source of competition, although mainly against the bulk water segment. Tap water is also an external competitor, with a clear advantage in price. Beverage marketing and display are beginning to undergo dramatic change. There will always be the major conventional media promotions, but the consumer market is becoming much more time sensitive and there is a high level of competition from substitute products, mainly other non-alcoholic beverages. The major ways for industry participants to differentiate and compete successfully include: †¢ Branding, image and breadth of product range: Recent growth in bottled water is related to the successful positioning of a number of brands as fashion accessories. Both media support behind the brand and the design of the bottle including the label contribute to the appeal of a product. Breadth of product range is also important as concentration of major customers continues. Large retail buyers (both in the supermarket and convenience store channels) prefer to deal with large manufacturers or suppliers that can provide a large product range. Packaging: Convenience is a key benefit of bottled water. Hence bottle size, shape and functionality form a basis of competition. Bottles are designed with particular uses in mind, for instance some water bottles have a pop-top cap for ease of use when playing sport or training. Distribution coverage: An ability to satisfy the needs of retailers, and obtain favourable terms such as promotional programs and stock positioning is important. Market share dominance of distribution channels is important as it allows manufacturers to diffuse the power of large buyers and maintain strong profitability levels. The ability to secure shelf space in convenience stores is also important, given that success in the convenience store channel is a precursor to getting new products into supermarkets. Taste: Especially at the premium end of the market, taste can be a basis of competition for both still and sparkling waters. Use of market data: Access to and use of market data is also important. The larger the competitor the more likely they are able to afford retail check-out scanning data to understand what its customers are buying. In this way, manufacturers can ensure retailers replenish their stock as required. This provides larger manufacturers with an advantage of responsiveness and flexibility as they make use of this information and respond quickly. †¢ †¢ †¢ †¢ Page 12 of 21 2. Current industry competitors The Australian bottled water manufacturing industry is dominated by large beverage manufacturers. Two of the major competitors are subsidiaries of global food and beverage conglomerates that are also major competitors in the non-alcoholic beverage market. Table 10 summarises the market share of the industry competitors in 2009. It should be noted that Australian Beverages Limited (ABL) is not currently in the Australian bottled water manufacturing industry, despite being a major competitor in the Australian non-alcoholic beverage market. Table 10: Market share by distribution channel and major competitors – 2009 Total market share 26. 9% 26. 3% 18. 3% 12. 0% 16. 5% 100. 0% Other includes export sales and use of purified water for medical procedures (for example: dental etc) ** Other competitors comprise small, locally based water manufacturers. No single entity has greater than 2 per cent market share Competitor Butlers Hydrate Water International Beverages Fountain Springs Other** Total Market Share Australian bottled water manufacturing industry – Market share by distribution channel Supermarkets Convenience Hospitality Home & Vending Other* & grocery stores (15%) office machines (5%) wholesalers (30%) delivery (9%) (6%) (35%) 27. 0% 35. 0% 25. % 15. 0% 30. 0% 38. 0% 22. 0% 20. 0% 15. 0% 35. 0% 20. 0% 17. 0% 35. 0% 15. 0% 10. 0% 10. 0% 5. 0% 15. 0% 70. 0% 5. 0% 16. 0% 15. 0% 55. 0% 20. 0% 30. 0% 100. 0% 100. 0% 100. 0% 100. 0% 100. 0% 100. 0% The industry has grown significantly to date. To keep industry profitability levels relatively high, the industry’s major competitors have tended to dominate one or two distribution channels only, rather than all channels. In this way, they hope to avoid strong head-to-head competition. This has assisted in keeping the overall level of industry rivalry relatively low to date. However, this is expected to change in the future as consumption growth begins to slow. Several new competitors have entered the market over the last five years. Moreover, industry consolidation has occurred. Major industry competitors have acquired smaller competitors to increase economies of scale, scope, market share and profitability. In 2009, the four largest competitors accounted for approximately 82 per cent of industry revenue. No major change is expected to this trend in the future as further consolidation will be difficult due to the relatively high market shares held by the four major companies. Regulatory concerns about restriction of competition will also affect further consolidation. Two of the competitors, Butlers Corporation and International Beverages, are owned by global food and beverage conglomerates that use Australia as the base for their non-alcoholic beverages operations in Asia. Industry experts believe that acquisition of either of these companies, to be used as a mode of entry into the industry and gain significant market share, is not possible. The parent companies will be unwilling to sell their Australian operations. The major industry competitors are summarised below. 2. 1 Butlers Corporation A wholly owned subsidiary of a large multi-national listed company, Butlers Corporation commenced operations in the United Kingdom in the 1800s as the official chocolatier to the King. Operations were expanded throughout the 20th century to include other types of confectionary, biscuits, snack foods and non-alcoholic beverages. Geographic expansion was also undertaken. Butlers Corporation is now a global giant in its chosen products. Butlers established its operation in Australia during the 1950s. It has held the majority market share in the Australian confectionary, non-alcoholic beverage and snack food industries for the past 20 years. The company entered the Australian bottled water manufacturing industry during the 1980s through the acquisition and consolidation of several state-based water manufacturers. This helped Butlers to become the first bottled water manufacturer to have national distribution. Page 13 of 21 Butlers has strong distribution capabilities given its broad product range. It is the largest supplier to convenience stores and the second largest to the hospitality distribution channels. Growth in its market share of the supermarket channel has also been strong over recent years, in particular through its well known still water brand ‘Olympus’. The company also holds significant market share in the sparkling water segment, having obtained the Australian license for Eau de Vivre, the worlds leading sparkling water brand. One of the areas of focus for Butlers is innovation for all its beverages. This includes a large of number of soft drinks such as flavoured mineral waters, flavoured milks and fruit juices. Its broad product offering that includes complementary snack products, has been leveraged to achieve strong sales in convenience stores and through vending machines. 2. 2 Hydrate Water Pty Limited Hydrate Water is a privately owned company that originated in 1993 in Queensland. The company has access to natural springs in Queensland, New South Wales and Victoria, and a long term agreement with key water utilities in these states to access water when required. It distributes nationally from ISO 9002 quality accredited manufacturing facilities in Queensland, New South Wales, Victoria and Western Australia. The company has products in the sparkling and still water segments. The products include energy drinks, fruit juices and a limited range of high quality carbonated soft drinks. It is also the manufacturer of the leading brand of still water, H2O, that is sold through the supermarket distribution channel. Hydrate is seeking a stronger presence in convenience channels. Its business model focuses on using its funds to support retailers so that the retailers can offer promotions, rather than spending on direct consumer advertising. The company has recently begun investigating the use of scanned retail data to monitor sales trends and adjust production volumes accordingly. This investigation into scanning data is due to having run out of inventory at the end of last financial year when the manufacturing plant was closed for annual cleaning and maintenance. As a result, the company had lost some market share. A number of the company’s water products are targeted to the sporting and energy drink consumer. One of its best known brands, ‘Viva! ’, has a 72 per cent market share in sports water products. Hydrate Water has been able to leverage the high brand recognition of ‘Viva! ’ to successfully introduce flavoured water. Similarly, Hydrate Water sells the leading brand in sparkling mineral water and has again leveraged this brand by introducing a number of flavoured mineral waters, including diet drinks. Both these initiatives have resulted in above average market growth for the company. The company is particularly well known in the industry for its packaging innovation and engineering design capability. Hydrate Water developed ‘Pop Tops’ – small plastic bottles that were very successful with young children as they fit perfectly into lunch boxes and have the advantage of being re-sealable. The ‘Pop Top’ range increased its bottling turnover by 50 per cent. This product won the coveted Australian dietician award for ‘Best New Product’ when launched. It also received the Australian Health Foundation endorsement for its diet drinks. In addition, the company has been commended by dieticians for promoting products that address the increasing concerns of childhood obesity linked to CSDs. Hydrate Water was also the first company to introduce stackable bulk water packs for sale through supermarkets. The management team at Hydrate Water have extensive industry experience, having a collective 80 years in the industry between them. Operations manager, Simon Miles, is well regarded in the industry and is currently the chairman of the Bottled Water Institute of Australia. Current owner, Jack Wells, has indicated he wishes to retire in the next five years, and has been grooming Simon Miles as his successor. An offer for acquisition was received from International Beverages last year, but Wells turned down the offer as he did not want to sell the Australian business he established to an international company. Page 14 of 21 2. 3 International Beverages Limited International Beverages is the wholly owned subsidiary of a large multinational company and sells fruit juices, energy and sports drinks, water and soft drinks. Its initial entry into the Australian market was through fruit drinks. During the industry consolidation in the 1990s, the company entered the bottle water manufacturing industry through acquisition. Through its parent company, International Beverages has the licence to sell the world’s leading brand of bottled still water Aqua Grande, in Australia and New Zealand. The company also sells the imported sparkling water brand San Vitale one of the most popular mineral waters bottled at the source. This product, in particular, has given the company a strong share of the hospitality channel. Company growth has been driven by new product development and product extensions which have leveraged existing capabilities and focussed on specific consumer requirements. The company’s latest successful product launch is calcium enriched water targeted at aged care facilities and nursing homes for women at risk of osteoporosis, a bone degeneration disease. 2. Fountain Springs Pty Limited Fountain Springs is a Sydney based company that has access to a naturally rising spring located in the Snowy Mountains in southern New South Wales. To date, the company has been unable to secure distribution and shelf space in major Australian retail outlets. This is because its product range is limited to only two pack sizes, 600ml and 2 litres. An export strategy was th erefore developed with the assistance of the Australian Trade Commission (Austrade). Fountain Springs is now Australia’s largest exporter of spring water and better known overseas than in Australia. In the past two years, the company’s bottled water exports have grown sales revenue significantly, having secured a contract with the major UK supermarket chain Besco. Growth is also expected through its expansion into UK convenience stores and petrol station channels which is planned for later this year. The UK was the first export market for Fountain Springs where it was able to leverage the perception of Australia as ‘clean and natural’. Since developing this UK market, the company has also been successful in developing business in the Middle East, South East Asia and the United States. Given the cost of transport to these export markets, Fountain Springs has a niche strategy and sells only premium grade water in the 600ml and 2 litre pack size at a higher price. However, market research shows that there is still very low consumer awareness of its products and brand in Australia. To raise awareness, a cause-related marketing strategy has been adopted. Under this program, the company donates a percentage of its profits to partner charities in its chosen markets. This has been central to the growing market awareness of the company in its selected markets. It leverages the networks and relationships of its partners to develop new business and sales. As a result of the company’s success in overseas markets their brand ‘Aqua Caliente’ is now being stocked in selected school canteens in Australia as a natural alternative to sugar laden CSDs and fruit juices. Given Fountain Springs did not have the capability to distribute directly to schools, it entered a distribution arrangement with a school food provider. The company also altered its cause-related marketing strategy whereby it would donate a proportion of all bottled water sales in each canteen to the school. The money was to be used by the schools to purchase new equipment or facilities for the school. Despite the success of its export strategy, the company has had mixed financial results over the past few years. This has been largely due to set up costs associated with its export business and distribution arrangements in the UK. It is rumoured that the company is in financial difficulty. Rumours abound that bankers have been requesting monthly audits of the cash position so that the company can maintain its line of credit. In addition, it is believed that its major UK supermarket customer, Besco, is demanding price reductions therefore squeezing margins for the company. Poor hedging of foreign exchange transactions with the company’s UK debtors has also contributed to its declining financial position. Page 15 of 21 D. Australian Beverages Limited (ABL) 1. History Australian Beverages Limited (ABL), formerly known as Australian Soft Drinks Limited, commenced operations in 1937. The antecedent company was established by a group of enterprising pharmacists who had previously made carbonated soft drinks in their pharmacies which were then offered for sale in sealed bottles. The first manufacturing plant opened in Sydney in 1938. Business began slowly, but the arrival of American soldiers in Australia in 1942 had a significant impact on both sales and market acceptance of carbonated soft drinks. Australian Soft Drinks initiated its move into non-carbonated soft drink beverages in 1984 when it began manufacturing fruit drinks. This followed the acquisition of a fruit juice manufacturer in Victoria. The fruit drinks’ business expanded nationally over the next 10 years. In 1990, Australia Soft Drinks entered the milk drink market with the purchase of manufacturing facilities from a dairy co-operative. The company officially changed its name to Australian Beverages Limited upon listing on the Australian Stock Exchange (ASX) in 1996, to reflect the broader beverage base of the business. In the years since its ASX listing, ABL has adopted a multi-beverage strategy wherein its product range has been expanded to cover all categories of the non-alcoholic beverage market. However, bottled water remains outside this product range. The company has also moved into the manufacture and distribution of snack food products through its acquisition of several small businesses in 2004. It aims to strengthen distribution relationships with convenience stores and hospitality channels. These developments have resulted in ABL’s revenue composition to change from 90 per cent CSD-based in 2000 to 68 per cent CSD-based in 2009. The aim is to further reduce dependence on CSDs by 2015. ABL intends to increase its market share of non-CSD beverage products so that CSDs will represent less than 50 per cent of company revenue as part of its multi-beverage strategy. 2. Business strategy ABL’s vision is ‘To satisfy Australia’s thirst by being a manufacturer of non-alcoholic beverages for every occasion in every location’. The company aims to achieve this vision by pursuing the following strategic goals for the 2007 to 2012 period: ? offer a wide range of products in the non-alcoholic beverage and complementary markets; ? grow the company’s share of the non-alcoholic beverage market to move from the second largest to the argest competitor in this market. This goal will be achieved by: ? offering a wider range of products; ? increasing per capita consumption of non-alcoholic beverages through product and packaging innovation; ? expansion into new non-CSD beverage categories; ? extend key customer relationship capabilities and grow product availability. This goal will be achieved through effective placement of refrigerated drink equipment and outlet expansion. This strategy would help the company to establish a major presence in all major non-alcoholic beverage distribution channels; ? aintain world best practices throughout the company’s operations to deliver cost discipline, low cost leadership and timely responsiveness to changing market demand; and ? ensure that the company’s operations are environmentally and economically sustainable. At a recent strategy presentation to market analysts, managing director, Tom Dwyer, outlined the company’s intention to be a major competitor in all categories of the non-alcoholic beverage market. He stated that ABL hopes to achieve this aim by being the supplier of choice for the distribution channels of supermarkets, convenience stores and hospitality outlets. It is hoped that ABL’s position in the snack food market, which it recently entered via acquisition, would be made stronger by another potential acquisition in line with the general consolidation already taking place in the food and beverage supply industry in Australia. Such an acquisition would add further breadth to the company’s total product offering to its customers in all major distribution channels. Of all the competitors, ABL would provide the greatest share of beverage and snack foods. Page 16 of 21 By offering a broader product range, ABL expects to leverage its market power in soft drinks to sales of related products. It also aims to control product supply, apply discounts, introduce loyalty rebates or promotions, and secure conditions of use on supplied refrigeration equipment. As more Australians now drink different beverages at different times of the day, Dwyer highlighted his belief that a modern beverage company needs to be highly flexible in manufacturing, distribution and marketing as well as be able to operate in all product areas. 3. Business operations ABL is currently the second largest competitor in t