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Issues and trends in the consumer packaged goods industry

Emerging market risk. How well does a company know the market into which it is expanding and the people with whom it does business?  If it gets it wrong, there is a risk of reputational damage, financial loss, exposure to bribery and corruption issues, integration problems or worse.   Our Business Intelligence Services (BIS) team can gather background information on individuals and corporates including, look into local business practices, geo-political issues, and even local consumer attitudes.  We offer Integrity Due Diligence (“IDD”) services whereby we research the background, track record/reputation of a potential target or business partner, including political connections and involvement in “red flag” issues such as bribery and corruption.  We also undertake country risk assessments to understand relevant business, government and regulatory environments, the judicial system and local political and legal trends, to assist clients in their wider due diligence process.

M&A . Despite macro-economic uncertainty and industry-specific challenges, underlying M&A drivers in the Consumer Products sector remain strong. Whether you are considering a disposal or acquisition, our team will support you with financial advice from the beginning of the transaction through to its completion. Our team will use their industry experience and transactional expertise to guide you through the transaction process, often working with our specialist teams or bringing in experts from our other business divisions such as tax and audit to ensure you have a successful outcome.

UK Patent Box. On 6 December 2011 the UK Government released draft legislation on the elective UK Patent Box regime. Designed to encourage companies to locate their innovative activities and functions within the UK, from April 2013 the Patent Box will tax income from patents, and certain other qualifying intellectual property (IP), at a lower effective tax rate – ultimately 10%. The combination of a positive Patent Box regime with a potentially improved ‘above the line’ R&D tax system is intended to make the UK a competitive jurisdiction for the whole innovation lifecycle, and could result in high value jobs in product development and commercialisation. In particular for Consumer Product companies with R&D centres and active product development based in the UK, this represents a real opportunity to reduce corporate tax bills and the effective tax rate. All companies in this sector should start to consider now how they might look to make the most of this regime when it is introduced in 2013.

Sustainability. In the past, sustainability has been seen as no more than a necessary compliance issue, a box to tick or a shareholder question to answer. However, times have changed and whilst the regulatory environment is pushing for ever higher environmental targets, there is also a growing demand from consumers and businesses for greener, leaner and more ethical products and services. This means that no longer can businesses afford to treat sustainability as an add-on; it is now an essential part of future business planning and success.

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