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Colorado small businesses able to tap stimulus money for forgivable loans

Federal and state officials are urging distressed small businesses to take advantage of the Paycheck Protection Program, a new $349 billion pool of relief funds that became available on Friday, April 3.

“This is a very simple program. Businesses will get forgivable loans as long as they keep their people employed,” said Gov. Jared Polis during his Friday press conference.

Businesses and nonprofits with 500 or fewer employees can borrow up to 2.5 times last year’s average monthly payroll, up to a maximum of $10 million. If employees are kept on the payroll for eight weeks and the money is used for employee expenses, rent, mortgage interest, or utilities through June 30, the entire loan can be forgiven.

Partial forgiveness is also available based on what portion of the loan goes toward employee costs. For example, if a small business owner spends $75,000 on payroll expenses through June 30, then up to $100,000 of the amount borrowed can be forgiven.

And even if the complete loan isn’t forgiven, the debt carries a 1% interest rate and two-year term, making it a cheaper source of capital than credit cards or business credit lines that some businesses are using to stay afloat.

The U.S. Small Business Administration is administering the program and lenders that already provide SBA loans are the best option. They represent 84 out of the 131 banks operating in the state. Other banks and credit unions are expected to join the program with approval.

“Working with your current bank is the fastest way for you to move forward,” Kelly Brough, president and CEO of the Denver Metro Chamber of Commerce, said during a webinar Thursday.

The PPP was part of the $2 trillion CARES act stimulus program passed last week and implementation has moved at lightning speed, with rules dropping down to banks on Thursday afternoon. Loans will be issued on a first-come, first-served basis, so those interested should move fast.

The application is only four-pages, much simpler than what is typically required in other SBA programs. But lenders must still verify borrowers are who they claim to be and the amount borrowed is justified. If banks get verification wrong, they could be liable for fraudulent loans, one reason many will be more comfortable working with current customers.

“Our banks know businesses are struggling and they want to give borrowers access to the funds they need as soon as humanly possible,” said Don Childears, chief executive officer of the Colorado Bankers Association, in an advisory.

The federal government is hoping loan funds can star hitting bank accounts by later next week. But Childears said questions continue to outnumber answers and verification takes time.

“The problem is nobody knows what is going on. The banks don’t know what is going on. They are not ready,” said Geta Asfaw, owner of seven McDonald’s restaurant locations in metro Denver.

Although he has had to close one location on the Auraria campus, Asfaw has largely avoided the closures and layoffs many small businesses have gone through. But sales are down and he plans to access a PPP loan, although he plans to wait a few days until the kinks are worked out.

“The most important thing is to get it out as soon as possible. It will be hard,” he said of the new loan program. “When you close your business, one day is like one year. It is too long. When you take two or three weeks off, it is like forever.”

Conditions are grim for small businesses across the country. Nearly a quarter of them report having temporarily closed their doors in the last two weeks, and of those that haven’t closed, another 40% said they will likely close over the next two weeks, according to a survey from the U.S. Chamber of Commerce and Metlife.

Homebase, which provides workhour tracking software, estimates that half of its most small business clients in metro Denver had shut down operations as of Wednesday and that 61% of the employees on its system locally at the start of the year are no longer putting in hours.

Times are also hard for independent contractors and gig economy workers who either have a payroll of one or have to pull money out of the business on an as-needed basis. They will be able to access the Paycheck Protection Program starting on April 10, next Friday.

Because of that, small businesses shouldn’t include outside contractors in their labor-cost calculations. And the individual wages they can count are capped at $100,000. Startups that don’t have a full year of data are allowed to use an average of January and February payroll expenses.

For small businesses that have already closed, the program provides an incentive to hire back workers. For those who can’t stay open, it may sway the calculation in favor of a furlough, where benefits are maintained, rather than a layoff.

But the calculation can get complicated in cases where displaced workers earn a low wage and would make more drawing unemployment benefits, which now include an extra $600 a week from the federal government on top of what the state would normally pay.

Those with questions about applying for a PPP loan or other relief programs are encouraged to contact the state’s Small Business Navigator site run by the state’s Small Business Development Center.

“Depending on your situation, a prudent action would be to apply to multiple products and as you weigh your options and learn more of the intricacies of how they interact together, you can then make additional informed decisions on how you will choose to use and expend each of the grants and loans,” the Small Business Development Center advises.

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Fed Chair Powell spoke with Trump as virus took aim at U.S.

(Reuters) – As the coronavirus bore down on the United States in February and President Donald Trump renewed his public call for interest rate cuts, he and Federal Reserve Chair Jerome Powell conducted two previously undisclosed phone calls, calendars released by the U.S. central bank on Friday show.

Trump and Powell spoke for a half hour on Feb. 7 and again briefly on Feb. 26. What exactly they discussed was not immediately clear, but Powell released a statement on Feb. 28 acknowledging evolving risks from the virus and promising the central bank would act as appropriate to support the economy.

It delivered an emergency rate cut on March 3.

Expectations for a Fed rate cut had risen dramatically during the month, even as most Fed policymakers were fairly sanguine about the threat of the coronavirus to the U.S. economy. Powell told lawmakers in mid-February testimony that while there was “no reason” the U.S. economic expansion could not continue, the coronavirus outbreak in China could slow things down over the short-term.

Investors had already begun to see if differently. The yield on the U.S. benchmark 10-year Treasury lost ground over the month, and when Trump and Powell talked for the second time, the S&P 500 Index was in day three of a sharp descent that continued through March.

Powell’s calendars show the Fed chair spoke with many of his global counterparts over the course of February, including with China’s central bank chief Yi Gang on Feb. 5, shortly after Trump closed U.S. borders to Chinese travelers in an effort to keep the coronavirus from gaining a foothold in the United States. He normally speaks frequently with other central bankers.

Less typical for a February was the flurry of calls with his fellow Fed policymakers the evening before and immediately after his regular weekly breakfast meeting with Treasury Secretary Steven Mnuchin on Feb. 28. He had spoken with many of his colleagues and a couple global counterparts by 2:30 p.m., when the Fed released his statement about the risks from COVID-19 and the pledge to act “as appropriate.”

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OPEC+ debates biggest-ever oil cut, awaits U.S. efforts

DUBAI/LONDON/MOSCOW (Reuters) – OPEC and its allies are working on a deal for an unprecedented oil production cut equivalent to around 10% of global supply, an OPEC source said, while also waiting to see what action the United States would take as President Donald Trump met with oil companies on Friday.

The oil market has crashed, with prices falling to $34 a barrel from $65 at the beginning of the year, as a result of the coronavirus pandemic. Fuel demand has dropped by roughly a third, or 30 million barrels per day, as billions of people worldwide restrict their movements.

A global deal to reduce production by as much as 10 million to 15 million barrels per day would require participation from nations that do not exert state control over output, including the United States, now the world’s largest producer of crude.

Trump met with U.S. oil producers Friday afternoon at the White House. “We’ll work this out and we’ll get our energy business back,” he told reporters before the talks began.

Trump said on Thursday he did not make any concessions to Saudi Arabia and Russia, such as agreeing to a U.S. domestic production cut, a move forbidden by U.S. antitrust laws. Some U.S. officials have suggested U.S. production was set for a steep decline anyway because of low prices.

The meeting of OPEC and allies such as Russia has been scheduled for April 6, but details were thin on the exact distribution of production cuts. No time has yet been set for the meeting, OPEC sources said.

OPEC producers were waiting to see if the United States commits to any efforts to stabilize the markets, two OPEC sources said. They said a deal must include producers from outside OPEC+, an alliance which includes OPEC members, Russia and other producers, but excludes oil nations such as the United States, Canada, Norway and Brazil.

“The U.S. needs to contribute from shale oil,” an OPEC source said. Russia has long expressed frustration that its joint cuts with OPEC were only lending support to higher-cost U.S. shale producers.

Russian President Vladimir Putin said on Friday that his country was ready to cut production along with OPEC and the United States, while still blaming Saudi Arabia for the market’s collapse.

Russia’s energy minister, Alexander Novak, told Russian state media that he understands the United States has legal restrictions on output cuts, but it should still be flexible.

White House economic adviser Larry Kudlow said Trump will fight any international collusion in energy markets that would hurt U.S. producers, but the administration cannot dictate to oil producers.

“Oil companies, seeing a decline in price are going to pull back on production,” he said, adding that he sees no reason why Trump’s talks with Saudi Arabia and Russia on oil will not “bear fruit.”

Canadian Prime Minister Justin Trudeau said he has had direct communication with OPEC and the United States. Jason Kenney, the premier of Alberta, Canada’s primary oil-producing province, said on Thursday that Alberta was open to joining a production-cut deal.

The Norwegian oil and energy ministry declined to comment on Friday on whether Western Europe’s largest producer could cut output to support prices.

The International Energy Agency warned on Friday that a cut of 10 million barrels per day would not be enough to counter the huge fall in oil demand. Even with such a cut, inventories would increase by 15 million barrels per day increase in the second quarter, said Fatih Birol, the head of the agency.

OIL PRICES RECOVER, FOR NOW

Oil prices recovered from the lows of $20 per barrel this week with Brent settling at $34.11 per barrel on Friday, but far below the $66 closing level at the end of 2019.

Prices plunged in early March after Russia and Saudi Arabia could not come to an agreement to curb output. The Saudis shocked the oil industry with an aggressive series of steps to take back market share that included cutting export prices, pumping at maximum production and trying to sell cheaper oil to refiners that buy Russian crude.

The oil market was dealt a heavier blow by the freefall in demand due to the coronavirus pandemic, which sent crude prices to their lowest levels since 2002.

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The oil-price crash spurred regulators in the U.S. state of Texas, the heart of the country’s oil production, to consider regulating output for the first time in nearly 50 years.

Major global producers have already scaled back production, as fuel demand has dropped precipitously and storage is rapidly filling. This past week, U.S. drillers idled more rigs in one week than at any time in the last five years.

“We expect 10 million bpd of oil production be shut in the next quarter. If you cannot sell it and you cannot store it, then you cannot produce it,” said Jim Burkhard, head of crude oil research at IHS Markit.

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Fed Chair Powell spoke with Trump as central bank geared up for virus response

(Reuters) – Federal Reserve Chair Jerome Powell had two previously undisclosed phone calls with U.S. President Trump in February, calendars released on Friday show, including a brief call during the last week of the month when it was becoming clearer that the coronavirus would likely have more than a transitory effect on the U.S. economy.

The two spoke for a half hour on February 7 and again on February 26. Two days later Powell released a statement acknowledging evolving risks from the virus and promising the central bank would act as appropriate to support the economy. It delivered an emergency rate cut on March 3.

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Coronavirus depresses U.S. payrolls, more job losses coming

WASHINGTON (Reuters) – The U.S. economy shed 701,000 jobs in March, abruptly ending a historic 113 straight months of employment growth as stringent measures to control the novel coronavirus outbreak shuttered businesses and factories, confirming a recession is underway.

The Labor Department’s closely watched employment report on Friday did not fully reflect the economic carnage being inflicted by the highly contagious virus. The government surveyed businesses and households for the report in mid-March, before a large section of the population was under some form of a lockdown, throwing millions out of work.

William Beach, commissioner of the Labor Department’s Bureau of Labor Statistics acknowledged this short-coming in a statement and also noted that data collection for the employment report was adversely affected by the coronavirus. But Beach also said, “we still were able to obtain estimates from our two surveys that met BLS standards for accuracy and reliability.”

The plunge in payrolls, which was the steepest since March 2009 and snapped a record streak of employment gains dating to September 2010, was led by 459,000 job losses in the leisure and hospitality industry, mainly in food services and drinking places. There were also decreases in health care and social assistance, professional and business services, retail trade, manufacturing and construction payrolls.

Economists polled by Reuters had forecast nonfarm payrolls falling by 100,000 jobs last month. Adding a sting to the report, the economy created 57,000 fewer jobs in January and February than previously reported.

The worst is still to come, with a majority of Americans now under “stay-at-home” or “shelter-in-place” orders. A record 10 million Americans filed claims for unemployment benefits in the last two weeks of March. Economists expect payrolls will sink by at least 20 million jobs in April, which would blow away the record 800,000 tumble during the Great Recession.

“We are just seeing the tip of the iceberg when it comes to the collapse of the labor market,” said Joel Naroff, chief economist at Naroff Economics in Holland, Pennsylvania.

Graphic: End of a historic jobs boom , here

Stocks on Wall Street fell, while U.S. Treasury prices rose. The dollar was up against a basket of currencies.

The report could sharpen criticism of the Trump administration’s handling of the public health crisis, with President Donald Trump himself faulted for playing down the threat of the pandemic in its initial phases.

Economists said the jobs bloodbath underscored the urgency for the U.S. Congress to consider additional fiscal stimulus following a historic $2.3 trillion package signed last week by Trump, which made provisions for companies and the unemployed. Both Trump and U.S. House of Representatives Speaker Nancy Pelosi have floated an infrastructure stimulus.

Separately, the Federal Reserve has undertaken extraordinary measures to help companies weather the virus. The United States has the highest number of confirmed cases of COVID-19, the respiratory illness caused by the virus, with more than 243,000 people infected. Nearly 6,000 people in the country have died from the illness, according to a Reuters tally.

MARSHALL PLAN NEEDED?

“Once the peak of the mountain in the virus infection is in sight, businesses will slowly return,” said Sung Won Sohn, a business economics professor at Loyola Marymount University in Los Angeles.

“But a V-shaped recovery is not likely. A Marshall Plan for the U.S. economy will be necessary,” he said, referring to the huge U.S. economic aid program to rebuild Europe after World War Two.

There are also perceptions that the recent fiscal package, which makes generous provisions for the unemployed, and the federal government’s easing of requirements for workers to seek benefits could encourage some not to work.

The unemployment rate rose 0.9 percentage point, the largest single-month change since January 1975, to 4.4% in March. The BLS said the rate could have been 5.4% if it were not for a misclassification error during the survey of households.

Graphic: U.S. jobless rate surged in March , here

With the ranks of the unemployed ballooning, economists say the jobless rate could top 10% in April. The labor force participation rate declined by 0.7 percentage point in March to 62.7 percent. The employment-to-population ratio fell by 1.1 percentage points over the month to 60.0%.

Mounting job losses spell disaster for gross domestic product, which economists believe contracted sharply in the first quarter. They predict that the economy slipped into recession in March.

The National Bureau of Economic Research, the private research institute regarded as the arbiter of U.S. recessions, does not define a recession as two consecutive quarters of decline in real gross domestic product, as is the rule of thumb in many countries. Instead, it looks for a drop in activity, spread across the economy and lasting more than a few months.

“Any doubt about a U.S. recession was just put to rest,” said Chris Low, chief economist at FHN Financial in New York.

Wage growth picked up in March, but that is all in the rear view mirror. Average hourly earnings increased 0.4% in March after increasing 0.3% in February. That lifted the annual increase in wages to 3.1% last month from 3.0% in February.

The average workweek fell to 34.2 hours last month from 34.4 hours in February, with the workweek in the leisure and hospitality industry being shortened by 1.4 hours.

Job losses in March touched nearly every facet of the economy. The healthcare and social assistance industry purged 61,000 jobs in March, with losses mostly in dentists and doctors’ office. Social assistance job losses were in child day care services. Professional and business services lost 52,000 jobs in March, concentrated in temporary help services.

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There were also declines in employment at travel agents and reservation services. The retail sector shed 46,000 last month, with job losses in clothing, furniture, and sporting goods, hobby, book, and music stores. But general merchandise stores payrolls increased by 10,000.

Construction employment fell by 29,000 in March. Employment in the ‘other services’ category declined by 24,000, with about half of the loss occurring in personal and laundry services.

Mining lost 6,000 jobs and manufacturing payrolls 18,000. But federal government employment rose by 18,000 in March, boosted by the hiring of 17,000 temporary workers for the 2020 Census.

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Helicopters? Bailouts? Central banks move to stem coronavirus crisis

LONDON/WASHINGTON (Reuters) – Central banks are pulling out all the stops to try to shield their economies from the new coronavirus pandemic, raising questions about whether they risk crossing a line by bailing out governments that are massively raising their spending.

Below is a summary of what leading central banks are doing and the possible dangers of such huge emergency measures to support their economies through the new coronavirus crisis.

THE UNITED STATES

The U.S. Federal Reserve, having cut interest rates back to their global financial crisis low, is amassing more bonds again. Its debt stockpile has already leapt to $6 trillion, or 25% of U.S. economic output, and more buying is on the way.

EUROPE

The European Central Bank and the Bank of England have revived their bond-buying programmes, which are at record high levels, after running out of room to cut rates further.

The ECB’s benchmark rate sits below zero while the BoE last month cut its rate to an all-time low of 0.1%.

The Fed, the ECB and the BoE have also pumped liquidity into their banking systems, which have clamoured for dollars, and are working on ways to get credit to companies threatened with collapse during the coronavirus shutdowns.

JAPAN

The Bank of Japan has pledged to buy unlimited amounts of government bonds to cap borrowing costs at zero. The central bank now owns nearly half of Japan’s government bond market and has sharply increased the pace of its buying since mid-March.

WHAT IS HELICOPTER MONEY?

U.S. economist Milton Friedman used the term to talk about dumping money unexpectedly onto a struggling economy as a way to shock it out of a deep slump. In a helicopter money drop, a central bank would directly increase the money supply and, via the government, distribute the new cash to the population with the aim of boosting demand and inflation. It’s different from the ongoing bond-buying by central banks in which bank-owned assets are swapped for new central bank reserves. It is also different from a central bank directly financing government debt.

IS JAPAN RESORTING TO HELICOPTER MONEY?

Some analysts say Japan’s yield curve control policy is like a form of helicopter money because it allows the government to spend more without having to worry about bond yields jumping.

Governor Haruhiko Kuroda rejects the term, saying the BOJ still buys bonds from the market and does not directly underwrite debt from the government, something that could undermine confidence among investors.

However, the line has appeared blurred because the BOJ buys roughly the same or bigger amount of bonds issued by the government.

LESSONS FROM HISTORY

When Bank of England Governor Andrew Bailey announced a 200 billion-pound increase to the BoE’s bond-buying programme on March 19, he said it was not money to fund directly the government, which a day later announced huge spending measures.

“I just want to emphasise that we are not abandoning the, I think, very clear central bank philosophy in terms of monetary financing because history tells us where that leads,” he said.

BUT ARE CENTRAL BANKS RISKING HIGH INFLATION?

The idea of central banks helping governments spend more has raised concerns about a rise in inflation and even drawn parallels with the disastrous hyperinflation of 1930s Germany and 1990s Zimbabwe.

Central bankers dismiss such comparisons, saying those cases involved unstable governments printing notes and handing them out to the public.

But JP Morgan strategist Jan Loeys said that if central banks eventually shift from their existing bond-buying programmes to direct funding of government spending, then inflation – which is currently low – might reawaken.

Ex-BoE deputy governor Charlie Bean said central banks had to show that their amassing of government bonds was temporary. “If that is done, I see no reason why the financial markets need worry unduly about any inflationary consequences,” he said.

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Coronavirus brings record U.S. job growth to an end in March

WASHINGTON (Reuters) – The U.S. economy shed jobs in March, abruptly ending a historic 113 straight months of employment growth as stringent measures to control the novel coronavirus pandemic shuttered businesses and factories, all but confirming a recession is underway.

The Labor Department said employers cut 701,000 jobs last month after adding a revised 275,000 in February. The unemployment rate shot up to 4.4% from 3.5%.

According to a Reuters survey of economists, nonfarm payrolls had been forecast to decrease by 100,000 jobs last month, snapping a record streak of employment gains dating to October 2010. Unemployment was seen rising to 3.8%.

Friday’s report is far from an accurate depiction of the economic carnage being inflicted by the contagious coronavirus. The government surveyed businesses and households for the report in mid-March, before a large section of the population was under some form of a lockdown, throwing millions out of work.

The report could sharpen criticism of the Trump administration’s handling of the public health crisis, with President Donald Trump himself facing criticism for playing down the threat of the pandemic in its initial phases. Already, data has shown a record 10 million Americans filed claims for unemployment benefits in the last two weeks of March.

With jobless claims, the most timely indicator of labor market health, breaking records over the last couple of weeks and a majority of Americans now under “stay-at-home” or “shelter-in-place” orders, Oxford Economics is predicting payrolls could plunge by at least 20 million jobs in April, which would blow away the record 800,000 tumble in March 2009.

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“The economy has fallen into the abyss,” said Chris Rupkey, chief economist at MUFG in New York. “Everywhere you look Washington and state governments were not prepared for the rapid spread of the virus and the devastating damage that would be done to the economy if businesses were shut down and workers sent home.”

Economists also worry the rapid closure of businesses could make it difficult for the Labor Department to accurately capture the magnitude of layoffs. There are also perceptions that a $2.3 trillion fiscal package signed by President Donald Trump last week, which makes generous provisions for the unemployed, and the federal government’s easing of requirements for workers to seek benefits could also be driving the jobless claims numbers higher.

“The April report should better reflect the severity of the recession, though the exact numbers are hard to pin down,” said Michelle Meyer, a U.S. economist at Bank of America Securities in New York. “Businesses that have closed won’t be responding to the survey.”

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Money FM 89.3 Podcast: Sustainable hotels of the future

Weekend Mornings: Sustainable hotels of the future

19:39 mins

Synopsis:  Glenn van Zutphen speaks to Bill Bensley, creative director, Bensley about developing sensible sustainable solutions for the hotel industry.

Produced by: Glenn van Zutphen of Weekend Mornings on MoneyFM 89.3

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Business booms for coffin-makers in coronavirus-hit France

JUSSEY/PARIS (Reuters) – Two hauliers load their lorries with what is fast becoming a precious commodity in France as the coronavirus pandemic takes its dreadful toll – coffins.

While most businesses have shut their doors as part of a national lockdown designed to slow the spread of the disease, the coffin-making factory in the sleepy town of Jussey in northeastern France can barely keep up with the orders.

France has confirmed nearly 60,000 cases of the coronavirus and as of Friday 5,387 deaths, the fourth highest tally in the world.

“Given what’s happening, the pace of production is going up by 50 coffins a day,” Emmanuel Garret, manager at the OGF plant, told Reuters. “We’re going up from 360 to 410.”

The group, which also has a factory near the Alps in eastern France, churns out about 144,000 coffins a year, making it the country’s biggest producer.

The Jussey plant manufactures 80,000 oak and pine caskets for the French market. It is not short of wood as there are about 60 square kilometres of forest in the adjacent area.

The town of just 1,600 inhabitants lies between Paris and the east of France, regions at the epicentre of the outbreak that account for more than half of the country’s death toll.

“It’s clear that in terms of activity, it’s where the demand is now strongest,” Garret said.

Inside the factory, the 120 employees beaver away assembling coffins that usually sell for between 700 euros ($756) to 5,000 euros a piece.

That will change as the surge in demand has pushed the plant to focus on the simpler units, Garret said.

Keeping a safe distance from each other and regularly disinfecting the work space, the employees all wear masks. The company commissioned local seamstresses to make them due to a chronic shortage caused by the global pandemic.

QUICK TURNAROUND

While the conveyor belts turn and robots finish off the varnishing in Jussey, more than 300 km (186 miles) away in Paris, preparations are underway for a wave of deaths with more than 2,200 people on life-support in regional hospitals.

At the Rungis food market, the largest in Europe, local authorities on Friday were converting a hall into a mortuary to hold 1,000 coffins and side rooms for families to say farewell to their loved ones for the last time.

“This is not a video game, this is reality,” Paris police chief Didier Lallement said. The makeshift morgue was to ensure there would be capacity if needed, he added.

Nathalie Vounikoglou, saleswoman for Bernier, one of the five casket distributors in the Paris region, said demand from funeral parlours had jumped by 20 percent in the past two weeks.

“We have occasional shortages of low-end models in standard size because there are no more ceremonies and so families go for the least expensive,” she said.

Some nursing homes and hospitals do not want to hold onto the bodies of coronavirus patients, Vounikoglou said, meaning there has to be a quicker turnaround.

Funeral parlours are ordering coffins at a day’s notice rather than the four or five previously, out of concern they could fall short.

“For the moment, we are restocking for the next morning,” Vounikoglou said.

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Coronavirus: Mexican brewer suspends Corona beer production

The brewer of the Mexican beer Corona is suspending production because of the coronavirus pandemic.

Grupo Modelo said the decision had been made after its business activities were declared non-essential under a government order.

Corona and the company’s other brands, which include Pacifico and Modelo, are exported to 180 countries.

“We are in the process of lowering production at our plants to the bare minimum,” the company said in a statement, adding it would complete the suspension in the following days.

The Mexican government this week declared a health emergency and ordered the suspension of non-essential activities after the number of coronavirus cases in the country surpassed 1,000.

On Thursday, it reported 1,510 cases and 50 deaths.

The brewer said in a statement that the suspension will go into place from Sunday and that it was already in the process of scaling down production to a level at which it could resume once the suspension is lifted.

“If the federal government considers it appropriate to issue some clarification confirming beer as an agro-industrial product, at Grupo Modelo we are ready to execute a plan with more than 75% of our staff working from home and at the same time guaranteeing the supply of beer,” the statement said.

Agriculture and food production in general are considered essential activities.

Grupo Modelo, which is part of the brewing group Anheuser-Busch InBev, operates 11 breweries in Mexico.

Corona means crown in Spanish and the symbol is used on the beer’s labelling. COVID-19 is known as coronavirus because of its crown-like shape.

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