Vatican to become the world first carbon-neutral state
The agreement announced on Thursday stipulates that the development of the Santa Maria Galeria site will preserve the agricultural use of the land and minimise the environmental impact on the territory, according to a Vatican statement.
Details weren't released, but the Vatican will be exempt from paying Italian taxes to import the solar panels, but won't benefit from the financial incentives that Italians enjoy when they go solar.
Italy, for its part, can use the field in its accounting for reaching European Union clean energy targets. Any excess electricity generated by the farm beyond the Vatican's needs would be given to the local community, officials said, speaking on condition of anonymity because the agreement was not public.
Vatican officials have estimated it will cost under 100 million euros ($A177 million) to develop the solar farm, and that once it is approved by the Italian parliament, the contracts to do the work could be put up for bids.
Vatican foreign minister Archbishop Paul Gallagher signed the agreement with Italy's ambassador to the Holy See, Francesco Di Nitto. The Italian parliament must approve the arrangement since it has financial implications for the territory, which holds extraterritorial status in Italy.
The Santa Maria Galeria site has long been the source of controversy because of electromagnetic waves emitted by Vatican Radio towers located there since the 1950s. The once-rural site some 35km north of Rome is dominated by two dozen short- and medium-wave radio antennae that transmit news from the Catholic Church in dozens of languages around the globe.
Over the years as the area became more developed, residents began complaining of health problems, including instances of childhood leukemia which they blamed on the electromagnetic waves generated by the towers. The Vatican denied there was any causal link but cut back the transmissions.
Pope Francis last year asked the Vatican to study developing the area into a vast solar farm, hoping to put into practice his preaching about the need to transition away from fossil fuels and find clean, carbon-neutral energy sources.
Pope Leo XIV visited the site in June and affirmed that he intended to see Francis' vision through. Leo has strongly taken up Francis' ecological mantle, recently using a new set of prayers and readings inspired by Pope Francis' environmental legacy.
In the 1990s at the height of the controversy over the radio towers, residents sued Vatican Radio officials, claiming the emissions exceeded the Italian legal limit, but the court cleared the transmitter. In 2012, the Vatican announced it was cutting in half the hours of transmission from the site, not because of health concerns but because of cost-saving technological advances in internet broadcasting.
Italy has agreed to a Vatican plan to turn a 430-hectare field north of Rome, once the source of controversy between the two, into a vast solar farm that the Holy See hopes will generate enough electricity to meet its needs and turn Vatican City into the world's first carbon-neutral state.
The agreement announced on Thursday stipulates that the development of the Santa Maria Galeria site will preserve the agricultural use of the land and minimise the environmental impact on the territory, according to a Vatican statement.
Details weren't released, but the Vatican will be exempt from paying Italian taxes to import the solar panels, but won't benefit from the financial incentives that Italians enjoy when they go solar.
Italy, for its part, can use the field in its accounting for reaching European Union clean energy targets. Any excess electricity generated by the farm beyond the Vatican's needs would be given to the local community, officials said, speaking on condition of anonymity because the agreement was not public.
Vatican officials have estimated it will cost under 100 million euros ($A177 million) to develop the solar farm, and that once it is approved by the Italian parliament, the contracts to do the work could be put up for bids.
Vatican foreign minister Archbishop Paul Gallagher signed the agreement with Italy's ambassador to the Holy See, Francesco Di Nitto. The Italian parliament must approve the arrangement since it has financial implications for the territory, which holds extraterritorial status in Italy.
The Santa Maria Galeria site has long been the source of controversy because of electromagnetic waves emitted by Vatican Radio towers located there since the 1950s. The once-rural site some 35km north of Rome is dominated by two dozen short- and medium-wave radio antennae that transmit news from the Catholic Church in dozens of languages around the globe.
Over the years as the area became more developed, residents began complaining of health problems, including instances of childhood leukemia which they blamed on the electromagnetic waves generated by the towers. The Vatican denied there was any causal link but cut back the transmissions.
Pope Francis last year asked the Vatican to study developing the area into a vast solar farm, hoping to put into practice his preaching about the need to transition away from fossil fuels and find clean, carbon-neutral energy sources.
Pope Leo XIV visited the site in June and affirmed that he intended to see Francis' vision through. Leo has strongly taken up Francis' ecological mantle, recently using a new set of prayers and readings inspired by Pope Francis' environmental legacy.
In the 1990s at the height of the controversy over the radio towers, residents sued Vatican Radio officials, claiming the emissions exceeded the Italian legal limit, but the court cleared the transmitter. In 2012, the Vatican announced it was cutting in half the hours of transmission from the site, not because of health concerns but because of cost-saving technological advances in internet broadcasting.
Italy has agreed to a Vatican plan to turn a 430-hectare field north of Rome, once the source of controversy between the two, into a vast solar farm that the Holy See hopes will generate enough electricity to meet its needs and turn Vatican City into the world's first carbon-neutral state.
The agreement announced on Thursday stipulates that the development of the Santa Maria Galeria site will preserve the agricultural use of the land and minimise the environmental impact on the territory, according to a Vatican statement.
Details weren't released, but the Vatican will be exempt from paying Italian taxes to import the solar panels, but won't benefit from the financial incentives that Italians enjoy when they go solar.
Italy, for its part, can use the field in its accounting for reaching European Union clean energy targets. Any excess electricity generated by the farm beyond the Vatican's needs would be given to the local community, officials said, speaking on condition of anonymity because the agreement was not public.
Vatican officials have estimated it will cost under 100 million euros ($A177 million) to develop the solar farm, and that once it is approved by the Italian parliament, the contracts to do the work could be put up for bids.
Vatican foreign minister Archbishop Paul Gallagher signed the agreement with Italy's ambassador to the Holy See, Francesco Di Nitto. The Italian parliament must approve the arrangement since it has financial implications for the territory, which holds extraterritorial status in Italy.
The Santa Maria Galeria site has long been the source of controversy because of electromagnetic waves emitted by Vatican Radio towers located there since the 1950s. The once-rural site some 35km north of Rome is dominated by two dozen short- and medium-wave radio antennae that transmit news from the Catholic Church in dozens of languages around the globe.
Over the years as the area became more developed, residents began complaining of health problems, including instances of childhood leukemia which they blamed on the electromagnetic waves generated by the towers. The Vatican denied there was any causal link but cut back the transmissions.
Pope Francis last year asked the Vatican to study developing the area into a vast solar farm, hoping to put into practice his preaching about the need to transition away from fossil fuels and find clean, carbon-neutral energy sources.
Pope Leo XIV visited the site in June and affirmed that he intended to see Francis' vision through. Leo has strongly taken up Francis' ecological mantle, recently using a new set of prayers and readings inspired by Pope Francis' environmental legacy.
In the 1990s at the height of the controversy over the radio towers, residents sued Vatican Radio officials, claiming the emissions exceeded the Italian legal limit, but the court cleared the transmitter. In 2012, the Vatican announced it was cutting in half the hours of transmission from the site, not because of health concerns but because of cost-saving technological advances in internet broadcasting.
Italy has agreed to a Vatican plan to turn a 430-hectare field north of Rome, once the source of controversy between the two, into a vast solar farm that the Holy See hopes will generate enough electricity to meet its needs and turn Vatican City into the world's first carbon-neutral state.
The agreement announced on Thursday stipulates that the development of the Santa Maria Galeria site will preserve the agricultural use of the land and minimise the environmental impact on the territory, according to a Vatican statement.
Details weren't released, but the Vatican will be exempt from paying Italian taxes to import the solar panels, but won't benefit from the financial incentives that Italians enjoy when they go solar.
Italy, for its part, can use the field in its accounting for reaching European Union clean energy targets. Any excess electricity generated by the farm beyond the Vatican's needs would be given to the local community, officials said, speaking on condition of anonymity because the agreement was not public.
Vatican officials have estimated it will cost under 100 million euros ($A177 million) to develop the solar farm, and that once it is approved by the Italian parliament, the contracts to do the work could be put up for bids.
Vatican foreign minister Archbishop Paul Gallagher signed the agreement with Italy's ambassador to the Holy See, Francesco Di Nitto. The Italian parliament must approve the arrangement since it has financial implications for the territory, which holds extraterritorial status in Italy.
The Santa Maria Galeria site has long been the source of controversy because of electromagnetic waves emitted by Vatican Radio towers located there since the 1950s. The once-rural site some 35km north of Rome is dominated by two dozen short- and medium-wave radio antennae that transmit news from the Catholic Church in dozens of languages around the globe.
Over the years as the area became more developed, residents began complaining of health problems, including instances of childhood leukemia which they blamed on the electromagnetic waves generated by the towers. The Vatican denied there was any causal link but cut back the transmissions.
Pope Francis last year asked the Vatican to study developing the area into a vast solar farm, hoping to put into practice his preaching about the need to transition away from fossil fuels and find clean, carbon-neutral energy sources.
Pope Leo XIV visited the site in June and affirmed that he intended to see Francis' vision through. Leo has strongly taken up Francis' ecological mantle, recently using a new set of prayers and readings inspired by Pope Francis' environmental legacy.
In the 1990s at the height of the controversy over the radio towers, residents sued Vatican Radio officials, claiming the emissions exceeded the Italian legal limit, but the court cleared the transmitter. In 2012, the Vatican announced it was cutting in half the hours of transmission from the site, not because of health concerns but because of cost-saving technological advances in internet broadcasting.
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The Australian
3 hours ago
- The Australian
Where will Pope Leo XIV lead the Catholic Church
Whenever a powerful head of state dies, king or president, all minds turn to the question of his successor. What will they be like? What will they do? The transition from Pope Francis to Leo XIV raises the same questions. Who is Robert Prevost, and what approach will he follow? How will he approach the problems he has inherited from his successor? What to do about healing divisions and detestations among the faithful? Most practically, how does he deal with the flailing finances of the church, and the whiff of corruption that wafts around them? No one should doubt the power of the papacy. Leo is the leader of a church that has 1.4 billion adherents, much the same as the population of China. Within that church he is the 'Supreme Legislator'. As the old saying goes, the answer to any question starting with words 'Can the Pope …?' is 'Yes'. Even Donald Trump can only dream of that unlimited power. But the problem with new popes is that we are not familiar with them in the way we are with presidents and sovereigns. Presidents campaign on specific policies. They have public profiles and families. New kings and queens do not have policies, but they do have known likes and dislikes. The former Prince of Wales, for example, loves his family and detests Harry and Megan. He is at ease with the military, less so with the ceremony of monarchy. But popes do not have spouses and children. The do not run lifelong campaigns to become pope. No sane cardinal, when appointed, thinks 'Now I will start my run to be pope'. Even the exact theological views of a new pope often are hard to pin down. The quietly spoken Leo has now succeeded Francis, one of the most disruptive popes in modern times. At this uneasy point of transition, there are three queries eddying down the corridors of the Vatican and along the pews of parish churches around the world. The first is retrospective. How are we to understand the papacy of Francis? The second is current. Who is Pope Leo and for what does he stand? The third, and most important, is about the future. What type of pope will Leo be? What will he do? The legacy of Francis is complex. He began as a hugely popular pope, and retained much of that popularity to his death. But as with any dead leader, criticisms burgeon after they are safely departed. Francis gave the Catholic Church three immensely important gifts. He re-popularised the papacy. After the quiet Benedict XVI, but much more importantly the sustained horrors of clerical sexual abuse, the church was on its knees, but not to pray. The rock star performance of Francis changed everything. Particularly for young Catholics, his openness and tolerance were compelling. They still are. Francis also put the Catholic imperative of solidarity into action. Not only did he draw in the poor and sick generally, but particularly those from Third World countries who lived lives of poverty and desperation. No one was too remote to deserve empathy. He was a pope for the planet. Third, Francis preached a compelling version of Christianity, the Gospel of Mercy. We are all bound to each other by a joyous and imperative love. It is a privilege, not a burden, to live up to this obligation. But now he is dead, the negatives claim their share of the spotlight. Some are personal, others institutional. As a person, Francis could be dictatorial. He would decide on actions quickly, without consultation, and hear no opposition. He also could be harsh to opponents. He had a profound dislike for adherents of the Latin Mass, and did everything he could to suppress it around the world. Ironically, in view of Prevost's election, he did not have much time for Americans. Logically enough, he really disliked American proponents of a Latin liturgy. In contrast to his sunny popularism, Francis was a moody man. The Francis of the morning could be gone by afternoon. Most controversially, he was a bomb thrower. He liked to publicly raise such controversial issues as female deacons and blessings for gay marriages, unilaterally and without elaboration. Raging controversy would ensue but, typically, Francis would move on without actually doing anything. Finally, he was extremely fond of pet projects. One was detente with China, which saw an approval process for Chinese bishops that included the Chinese government. Most troubling, old, faithful Catholics who had preserved the church in hiding were displaced. Then there was his favourite doctrinal innovation, synodality. This began as a program for non-hierarchical, mutual co-operation between bishops, clergy and lay people. But in many Western countries, it became a sort of bastard democracy, where ageing, wealthy Catholic lay people tried to impose themselves as a new aristocracy above nervous bishops. But in the medium term, the greatest institutional failure of Francis will be his refusal to grapple comprehensively with the tortuous finances of the Vatican. This involved tolerating fiscal incompetence and declining to deal decisively with the corruption it promoted. Financially, the Catholic Church is an impossibly complicated beast. It has its own bank, innumerable accounts, multiple charities, and ancient religious orders with large funds of their own. It resembles less a modern corporation than the Exchequer of Edward III. While no one expects the Vatican to be an ecclesial Westpac, this chaos has provided multiple opportunities for crooks and charlatans. Modern accounting practices are at best vestigial. Moneys have been mislaid and misappropriated. Recent revelations that Vatican funds could be moved and spent without any trace or accountability were horrifying, but far from astounding to anyone familiar with Vatican financial administration. A real problem is the incestuous organism that is the Holy See. For all that it has the loyalty of more than a billion people scattered across the world, and vast enterprises in heath, education and social services, it is a tiny operation. Everybody knows everyone else. Crucial parts of its bureaucracy are massively understaffed. Often, sections of the papal bureaucracy lack information, expertise and necessary resources. Before the election of Francis, the Vatican – an independent state – lacked almost every accountability mechanism of a modern nation. There was no auditor-general, no consolidated account, no budgets, no risk register, no forward accounts, and no asset registers. Amid legions of dedicated, honest workers for the church, it was a fraudster's dream. This is why Francis – to his great credit – brought in Australian cardinal George Pell as finance tsar. His job was to investigate, impose systems, and root out corruption. He instituted standard controls such as the appointment of an auditor-general and the rigorous inspection of accounts. His standard measures of fiscal responsibility were welcomed in many quarters of the Vatican, but reviled in others. As one senior cleric almost spat at Pell, his family had run Rome for centuries, and would not be constrained by some English barbarian. 'Australian barbarian', replied the unmoved former Richmond ruck man. Salacious stories like that of well-placed clerics being arrested at the Swiss border with suitcases full of euros cannot all be true. But anyone who knows Rome also knows they cannot all be false. Yet Francis let Pell down badly. As Pell produced reforms, Francis often squibbed and would not implement them, fully or at all. Important financial controllers brought to Rome by Pell were sacked, marginalised or resigned in despair. As vengeful Vatican vultures circled Pell, Francis did little. It is now an open question whether some of Pell's most fiscally compromised enemies, including disgraced former cardinal Giovani Angelo Becciu, were involved in the transfer of funds from Rome to finance Pell's persecution through the Australian courts on false charges of child abuse. That it can be asked at all is a grim tribute to the financial maze of the papacy. All this comes at a time when the finances of local churches are desperately strained by the just duty to compensate for child abuse. Some minor dioceses around the world have gone to the wall, as have some major religious orders of nuns and brothers. Even mighty archdioceses in the wealthy West are struggling. For the faithful, including the vast majority of those working in the Vatican, all this is a tragedy. They labour for the poor, the sick and the uneducated, and above all they labour in the vineyard of the Lord, not to fund some clerical kleptocrat. But the probity of all Catholics, from altar servers to the Pope himself, are undermined by the criminality of the few. In fairness to Francis, he belatedly realised Pell was right, and began to reinstate or implement some of his reforms. He personally supported Pell throughout his attempted legal assassination, and referred to him privately – and truly – as a martyr. But institutionally, the damage had been done. Leo will inherit a church in critical need of financial reform at a time when its own finances are declining. This is one of the principle legacies of Francis. It is striking that those anti-clerical Catholics who idolise Francis as the greatest reformer the church has ever seen, the democratiser of its power structures and processes, never mention his failure to systemically stamp out actual corruption. They save their venom for the 'conservative' Pell, who tried heroically, but ultimately was frustrated by papal timidity as much as anything else. But for all his limitations, and despite my deep love for Pell, Francis remained my pope. I saw the smoke and saw him come on to the balcony. I talked with him on more than one occasion, and was struck by the depth of his dark, brown eyes. I heard him give an impromptu speech on universities as agents of mercy, which changed my life. To state the staggeringly obvious, Francis was a universally recognised public persona, while his successor is relatively unknown. Inevitably, his future directions are hard to predict. Commentators have resorted to proxy characteristics in trying to work out his priorities. The most popular is his choice of Leo as his reign name. Many Catholics – particularly those on the 'left' of the church – rejoice that he has taken the name of Leo XII, the great proponent of Catholic social justice through his famous encyclical Rerum Novarum. They predict a papacy characterised by profound change in social action, and accompanying innovation in church teaching. But even the most conservative Catholic also looks to the teachings of Leo XII as fundamental to the place of Catholics in society. Further, the new Pope would have been very much aware that there was another Leo. Leo the Great was a fighter and a unifier who stared down Attila the Hun. This new Leo certainly speaks of unity and defence of the essential doctrines of the church. It is an interesting footnote that if George Pell had been elected pope, he almost certainly would also have chosen the name Leo. The second proxy of prediction is that Leo is an Augustinian, and that Augustinians have a very particular view of the church. This is firmer ground, but almost no one knows much about the Augustinians, so there has been a rush by commentators on church affairs to buy The Beginner's Guide to the Augustinians. As one wag quipped, who was the last famous Augustinian? The answer was Martin Luther. Fortunately, there are more reliable indicators. The most obvious thing is that Leo was a Francis appointment as cardinal. He is most likely to follow a roughly Franciscan course, although one more restrained through his quiet and modest character. Then again, a pope is not the same man as he was as he was when a cardinal. But certainly, no one can expect Leo to throw the legacy of Francis under a bus, though he surely will recognise the failures of his predecessor in financial and administrative accountability. In fact, Leo was not merely a follower of Francis. He was one of his generals. Within the curia, he was responsible for the appointment of bishops. It was here that Francis was most notoriously liberal, and Prevost was at his right hand. Leo is as much a Peruvian as an American. He spent many years in that disadvantaged country. He will be a missionary Pope, reaching out to the world beyond nations of privilege. Like Leo XII, he will be profoundly motivated by the idea of solidarity – that the New York banker is the brother of the Nigerian farmer, not a disdainful observer. But Leo also was born and raised an American. This gives fair hope that he will be able to address the chasm between 'left' and 'right' in the United States, as well as the controversy over Latin Mass. Certainly, he will not have the disdain of his predecessor for all things Yankee. His American origins will have great implications for papal communications. He will be able to address controversies and opportunities in fluent English, the lingua franca of the modern world, rather than the halting accents of his predecessors. Also, as an American, he will be the first tech-savvy Pope. For all his modernist image, Francis could not even turn on a computer, let alone use one. Typically, Americans are more naturally in favour of transparent financial structures than those steeped in centuries of fiscal mysticism. Leo will have his work cut out for him. It will be very interesting to see where he goes with synodality. As a cardinal, he was fully engaged, speaking and working in favour of the strategy. But as a Pope who seems to see himself as a unifier, he may be less enthusiastic. 'Synodality' has not been popular in the burgeoning churches of Africa and Asia, for example, where they face bigger issues than ecclesial organisational theory. In the West, synodality has been divisive, pitting ageing elite Catholics – besotted with the 60-year-old directions of the Second Vatican Council – not only against bishops, but more conservative laypeople. In places such as Germany, this has brought the church close to schism. For a Pope profoundly interested in church unity, radical synodalism may be more of a problem than an asset. Leo will not abandon synodality, but he may dial it back. Interestingly, as Pope, on the relatively few occasions he has addressed the concept, he rightly has expressed it more as a particular aspect of solidarity than a doctrine in its own right. We will see. Obviously, Leo's papacy will very much be influenced by his own personality. All the evidence is that he is mild but strong, not given to seeing himself as the star of his own papal drama. He is no flamboyant Borgia. He is so modest that, though I met him in a group of three cardinals a few months ago, I do not remember him. This is not a man to launch doctrinal missiles and see where they land. That does not mean there will be no revisions or initiatives. But they will be the product of careful consultation, formulation and implementation. This is where Leo's character as an Augustinian becomes important. The Augustinian watchwords are unity and discussion. Genuine dialogue that aims at consensus is very different to the barnstorming processes of Francis, where doubters simply drowned in his wake. Then there are the very conscious symbols. In Leo's first appearance on the loggia, he wore full pontificals, blazing red and gold. Francis wore plain white. Leo will return to the papal apartments, rather than living in the Santa Marta guesthouse like Francis. Security details and the Swiss Guard will be faint with relief, and much money will be saved. A Pope who sings the Regina Coeli to the crowd in St Peter's square, and reportedly sometimes hears Latin Mass in his private chapel, is no foaming radical. He is consciously, publicly making this very clear. Then there are the odd little details we know from the conclave. Cardinal Tim Dolan of New York was 'doing the numbers' for Prevost. In Catholic terms, Dolan is pure centre right. He will die during this pontificate. There is no way he would be promoting the election of a dangerous radical. This is reflected in the new Pope's very first major decision. He oversaw the prompt exit of Archbishop Vincenzo Paglia from leadership of the John Paul Institute for Marriage and the Family. Paglia was a favourite of Francis, but under his leadership the institute skirted dangerously close to heterodoxy on matters of life and sexuality. These straws in the wind hardly are conclusive, but they do give some inkling of the new Pope's ecclesial temperament. So what to draw from all this? We have a Pope in the tradition of Francis, but who will not slavishly follow his course, just as he will not abandon it. He is no populist, but a measured, thoughtful leader. He comes from a religious tradition that emphasises unity and conciliation. All this militates strongly against theological lunges. He will try to conciliate the major fault lines in the church, whether internally within the Western world, or externally between a rich West and its impoverished brothers and sisters. Consequently, like Leo XII, he will be profoundly committed to the Catholic principle of solidarity. Whether that problem child synodality will survive as a separate motivating force or be absorbed into the fundamental principle remains to be seen. One thing solidarity demands is fiscal rectitude. The goods of the church, drawn from the faithful across the world, are a trust for the Works of Mercy. They cannot be misappropriated by the privileged few. Fortunately, he will not be a weak Pope. Modesty and restraint do not amount to fragility. Everything about him suggests a man firm in his convictions and prepared to defend them, forcefully but without rancour. There were tears in his eyes as the ring of the fisherman was put on his finger. Nothing could more reflect Leo's strong grasp of reality in humility and openness. Greg Craven is former vice-chancellor of the Australian Catholic University. Can new Pope Leo reunify Catholics and help a troubled world? Read related topics: Cardinal Pell
The Age
a day ago
- The Age
‘Wolf in cashmere': Billionaire's luxury empire is facing a crisis
LVMH's market value has fallen by more than a quarter over the past year, to less than €250 billion. Hermes, a luxury brand Arnault tried and failed to buy, and has eyed with envy ever since, has taken LVMH's crown as the most valuable company in the industry, despite generating only €15 billion in sales last year. Adding insult to injury, the Arnault family, which has topped France's rich list since 2017, has also been dethroned by the Hermes clan. Can Arnault turn the ship around? Loading LVMH can't blame the economic environment for all its woes. It raised prices enormously in the post-COVID 'revenge shopping' boom, irking some customers. The price of Louis Vuitton's Speedy 30 canvas tote bag has more than doubled since 2019, for example, while the average price of personal luxury goods in Europe has increased by just over 50 per cent, according to HSBC, a bank. Only a handful of designers, including Chanel and Gucci, have raised prices more. A series of scandals have also damaged the image of some of its brands. Moet Hennessy, LVMH's drinks division, has recently faced accusations of sexual harassment, bullying and unfair dismissal by former employees (which it denies). On July 14, an Italian court placed Loro Piana, an LVMH label that sells cashmere sweaters for more than $US1000 ($1500) a piece, under judicial administration for using suppliers that allegedly violate labour rights. Dior faced similar investigations last year. LVMH's response has been half-hearted: 'Transparency, control and management of this whole ecosystem can sometimes prove a bit difficult,' it said recently. Arnault is attempting to steer towards calmer waters. New bosses have been put in charge of the booze, watches and retailing units. The appointment of Jonathan Anderson as the new creative director of Dior has been cheered by fashionistas. Some investors, however, worry that the companies' problems are deeply rooted. One concern is that decades of pushing fancy clothing and accessories not just to the super-rich but also the merely well-off has made LVMH's brands more vulnerable to economic cycles and dented their image of exclusivity. Even Louis Vuitton, the company's crown jewel, has not been immune. Analysts at HSBC term the brand 'schizophrenic' for its attempt to peddle entry-level products like chocolate and make-up alongside ultra-pricey handbags and luggage. Loading The outlook for Moet Hennessy is more worrying still. As profits have shrunk, the division has announced thousands of job cuts. Analysts point out that young consumers aren't drinking as much as older generations, and when they do, they tend to shy away from spirits such as cognac, which make up a big chunk of LVMH's booze business. The wine and spirits division now contributes less than 10 per cent of LVMH's operating profits, down by roughly half over the past decade. By contrast, Hermes, which has remained focused on selling fashion to the exceedingly wealthy, has continued growing handsomely. Its market value as a multiple of its net profit is now more than twice as high as for LVMH. Brunello Cucinelli, another purveyor of ultra-luxe fashion, is valued at a similar multiple to Hermes. If Louis Vuitton were to be valued at such a multiple, it alone would be worth significantly more than the entirety of its parent company. That has led some to call for LVMH to break itself up. On July 25, reports emerged that it was exploring a sale of Marc Jacobs, a fashion label founded by a former creative director of Louis Vuitton. A bolder move would be jettisoning the troubled drinks business. Diageo, owner of tipples from Guinness to Johnny Walker, already controls a third of Moet Hennessy and has in the past expressed interest in taking the rest of it off LVMH's hands. The British company is currently grappling with its own slump in profits and recently parted ways with its chief executive, but analysts speculate that it could make a deal work by selling off its beer business at the same time. Arnault, aged 76, is navigating all this while making plans for a transition at the helm. He clearly intends to keep the enterprise under family management. All five of his children work in different corners of his empire under the tutelage of experienced executives. His daughter, Delphine, who has been tasked with turning around Dior, is his eldest and the only of his offspring on the executive committee of LVMH, making her the most likely candidate to succeed her father. Yet, there are other possibilities. In February, Alexandre was parachuted in as the deputy head of Moet Hennessy. In March Frederic was put in charge of Loro Piana.
Sydney Morning Herald
2 days ago
- Sydney Morning Herald
Cheesed off: Swiss meltdown over Trump's ‘incomprehensible' tariff whack
London: Swiss companies are reeling from a shock move by US President Donald Trump to slap a 39 per cent tariff on their exports, stunning brand-name suppliers of luxury watches, jewellery, cheese and chocolate. Swiss chocolate makers have declared the move 'incomprehensible' and are warning it will hit them hard, as the changes flow through to higher prices for American customers. The biggest names in luxury watches, already suffering a slowdown in America after Trump's previous trade decisions, now confront extraordinary price hikes that could lead them to expand sales in other markets. Trump spared Australia from higher penalties in his sweeping trade decision on Thursday, leaving tariffs at 10 per cent for most Australian exports, but he singled out Switzerland with the biggest blow to any European country. At 39 per cent, the new rate is higher than the 31 per cent tariff the president proposed in April – and much worse than Swiss leaders expected. The decision puts the Swiss exporters at a grave disadvantage to competitors in Belgium, France, Germany, Italy and other countries that will incur the 15 per cent tariff applied to the European Union. While Americans may have to pay steeper prices for Bally fashion made in Switzerland, they would incur a more modest price hike for a Dior item made in France or Armani product made in Italy. 'It is incomprehensible why Switzerland is affected by these tariffs, as reciprocity is out of the question,' industry group Chocosuisse said, repeating concerns it aired in April.
