The Irish Independent reports that differences have emerged among top Bank of Ireland executives over the need for private equity investment in the institution as they met with four separate parties bidding for a slice of the country's second-largest lender in recent days.
Chief executive Brian Goggin is understood to be of the strong view that the group should steer clear of foreign investment funds as it looks to shore up its capital reserves in the face of spiralling bad debt losses.
On the other hand, Richie Boucher, head of the bank's retail operations in Ireland, is believed to be more favourably disposed to fresh outside investment.
Within the past few days, Bank of Ireland has held talks with representatives from the so-called Mallabraca consortium, which has been assembled by Irish financiers Nigel McDermott and Nick Corcoran of Cardinal Asset Management. It comprises US private equity firms Carlyle and JC Flowers as well as private and sovereign wealth money.
The bank, which confirmed last week it had received "unsolicited approaches from a number of parties", has also met separately with representatives of private equity houses TPG, KKR, as well as another group. KKR had previously been linked by sources to the Mallabraca coalition of investors.
A spokesperson for the bank said: "Bank of Ireland, led by Brian Goggin, have met several (interested) parties in the past few days. This should confirm that there is no difference of opinion within Bank of Ireland in considering private equity as a range of options."
All suitors have been left with the clear impression that the bank would be keen that existing shareholders be given an opportunity to participate in any fundraising.
Bank of Ireland's biggest shareholder, Harris Associates, known for its activist streak, reminded would-be investors of its presence this week by upping its stake in the group to over 6pc. Interested parties are expected to pitch proposals to the group by the end of this week. No formal due diligence has yet taken place, according to sources.
Private equity houses circling the banking system in recent times have also been developing lines into the Department of Finance, which is driving plans to recapitalise the system. The Mallabraca consortium's plan to invest up to €5bn in Bank of Ireland is generally perceived to be the most developed.
At the unveiling of Bank of Ireland's interim results two weeks ago, Mr Goggin said the group was looking to increase its tier one capital ratio -- a widely followed measure of a lender's financial stability -- from 6.3pc through a number of measures.
These included the sale of non-core assets and controlling "risk-weighted asset growth" -- in other words, limiting lending to projects with higher perceived risks, which would require extra capital being set aside as a buffer.
The group indicated that it would focus lending to the Irish franchise, leaving one analyst to comment in private that Mr Boucher "is effectively the only man on the board with the chequebook".
However, the Government has come under immense pressure from Opposition leaders and the financial markets to find solutions to recapitalise the system to help free up lending to the broader economy.
Finance Minister Brian Lenihan has repeatedly dismissed State investment as a last resort, saying lenders have to "demonstrate their capacity to attract private capital".
Bonds
Meanwhile, Bank of Ireland yesterday became the second lender to issue new bonds since the €440bn government guarantee scheme was unveiled at the end of September.
The move follows a similar one to Allied Irish Banks last week.
The group succeeded in raising €2bn of funding, backed by the State's explicit triple-A rating.
The bonds, which mature before the guarantee expires in September 2010, carry an annual coupon -- or interest rate -- of 3.75pc.
The Irish Independent also reports that Google Ireland swung into the red in 2007 but employee levels at the group increased over 300 this year bringing staff numbers to the 1,500 level, bucking a national and global trend.
Employee levels at the company were up over 70pc in 2007.
According to figures just filed at the Companies Office, the loss for the year end 2007 was €12m compared with a profit of €14m. The loss was incurred mainly by increased cost of sales, investment in R&D and higher wage bills.
Turnover at Google was up 58pc on the year to €5.2m, boosted by an increase in the number of new contracts.
The cost of sales at the company's European headquarters hiked 52pc to €1.7m related to traffic acquisition costs -- Google pays its network members a proportion of fees it gets from advertisers.
Investment in R&D totalled €18.5m last year, while the wage bill increased to nearly €93m at the end of the year from €55m as employee levels increased.
"These results show that Google Ireland's turnover, revenues and employment numbers grew strongly in 2007," a spokesman for the company said.
"Through revenue sharing with our many partners and rising job numbers, the benefits to the Irish economy have continued to grow."
Google is amongst a number of hi-tech multinationals that have chosen Ireland as a location for European headquarters, despite the recessionary environment.
Others include Yahoo, Amazon and eBay, and more recently Facebook chose Ireland as its European headquarters.
Concerns about Google Inc's fourth quarter and 2009 numbers may be warranted given the economic slowdown impacting both its customers and consumers, but the damage to its share price may not be.
Google traded below US$250 per share in the past week, down from a 52-week high of US$724.80.
Barclays Capital analyst Douglas Anmuth told clients that Google's business model is fundamentally intact and the company is well-positioned to continue to take its share of advertising dollars due to the performance-based nature of searching on the internet.
The Irish Times reports that differences have emerged among top Bank of Ireland executives over the need for private equity investment in the institution as they met with four separate parties bidding for a slice of the country's second-largest lender in recent days.
Chief executive Brian Goggin is understood to be of the strong view that the group should steer clear of foreign investment funds as it looks to shore up its capital reserves in the face of spiralling bad debt losses.
On the other hand, Richie Boucher, head of the bank's retail operations in Ireland, is believed to be more favourably disposed to fresh outside investment.
Within the past few days, Bank of Ireland has held talks with representatives from the so-called Mallabraca consortium, which has been assembled by Irish financiers Nigel McDermott and Nick Corcoran of Cardinal Asset Management. It comprises US private equity firms Carlyle and JC Flowers as well as private and sovereign wealth money.
The bank, which confirmed last week it had received "unsolicited approaches from a number of parties", has also met separately with representatives of private equity houses TPG, KKR, as well as another group. KKR had previously been linked by sources to the Mallabraca coalition of investors.
A spokesperson for the bank said: "Bank of Ireland, led by Brian Goggin, have met several (interested) parties in the past few days. This should confirm that there is no difference of opinion within Bank of Ireland in considering private equity as a range of options."
All suitors have been left with the clear impression that the bank would be keen that existing shareholders be given an opportunity to participate in any fundraising.
Bank of Ireland's biggest shareholder, Harris Associates, known for its activist streak, reminded would-be investors of its presence this week by upping its stake in the group to over 6pc. Interested parties are expected to pitch proposals to the group by the end of this week. No formal due diligence has yet taken place, according to sources.
Private equity houses circling the banking system in recent times have also been developing lines into the Department of Finance, which is driving plans to recapitalise the system. The Mallabraca consortium's plan to invest up to €5bn in Bank of Ireland is generally perceived to be the most developed.
At the unveiling of Bank of Ireland's interim results two weeks ago, Mr Goggin said the group was looking to increase its tier one capital ratio -- a widely followed measure of a lender's financial stability -- from 6.3pc through a number of measures.
These included the sale of non-core assets and controlling "risk-weighted asset growth" -- in other words, limiting lending to projects with higher perceived risks, which would require extra capital being set aside as a buffer.
The group indicated that it would focus lending to the Irish franchise, leaving one analyst to comment in private that Mr Boucher "is effectively the only man on the board with the chequebook".
However, the Government has come under immense pressure from Opposition leaders and the financial markets to find solutions to recapitalise the system to help free up lending to the broader economy.
Finance Minister Brian Lenihan has repeatedly dismissed State investment as a last resort, saying lenders have to "demonstrate their capacity to attract private capital".
Bonds
Meanwhile, Bank of Ireland yesterday became the second lender to issue new bonds since the €440bn government guarantee scheme was unveiled at the end of September.
The move follows a similar one to Allied Irish Banks last week.
The group succeeded in raising €2bn of funding, backed by the State's explicit triple-A rating.
The bonds, which mature before the guarantee expires in September 2010, carry an annual coupon -- or interest rate -- of 3.75pc.
The Irish Times also reports that the chief executive of Superquinn, Simon Burke, has warned of substantial job losses in the retail sector after Christmas as a result of the financial downturn and the flow of shoppers crossing the Border.
Mr Burke said sales figures in the past week were the worst for more than a decade. The sector was expecting a bad Christmas season and a "worse" New Year.
"The business environment for retail is pretty appalling and getting worse, and this has to have a significant impact on jobs."
He would be "gobsmacked" if there were not significant job losses in the New Year.
The Irish-owned supermarket chain yesterday announced a "Cheaper than Newry" promotion this weekend for selected staple items, but admitted that "the reality is that if we begin to lose our regular customers to Northern retailers that will put serious pressure on our business going forward".
Mr Burke told The Irish Times the growth of cross-Border shopping was "very unhelpful" but insisted it amounted to "a trickle" relative to the overall size of the retail market.
"We have enough problems at the moment and on top of that there is now the issue of shopping north of the Border."
Surveys have shown that many grocery prices in the North are currently up to 40 per cent cheaper but Mr Burke insisted that the overall picture was "a mixed bag". Alcohol was cheaper in the North but fresh, local produce cost about the same in both jurisdictions.
"I don't have any problems with people being advised to shop around but I do have a problem with surveys that seem to indicate it's all one-way traffic, when it isn't." Southern consumers could still get good value by shopping "cleverly" and choosing promotional items.
Asked about reports that the company had been approached by rivals seeking to acquire its business, Mr Burke said these had "come to nothing".
"We're not talking to anyone about anything," he said.
Superquinn had been approached by a number of parties who had an interest in buying the company, he confirmed, but added: "This goes on all the time. It doesn't mean the company is going to be sold."
Meanwhile, Tesco Ireland has rejected claims by some suppliers and customers that it has increased prices across a range of products in the last two months.
A spokesman dismissed a report in the industry newsletter Retail Intelligence that Tesco had increased the prices of "significant numbers" of branded products at a time when commodity prices were falling and suppliers were under pressure to reduce their prices. While some products had increased in price in other retailers, many were up in Tesco alone, it claimed.
"On one hand they are squeezing us for more price cuts, and saying that it is the suppliers' fault that prices in Ireland are too high, and then they turn around and put up the prices in their stores. It is unjustified," said one supplier quoted by Retail Intelligence .
Separately, a number of customers have also contacted The Irish Times with their concerns over price trends.
However, the Tesco spokesman said the company had reduced thousands of prices this year. While there were "fluctuations" the general trend was downwards.
The Irish Examiner reports that the ESB has secured a €175 million loan from the European Investment Bank towards its new natural gas-fired power plant at Aghada in Cork.
This brings to over €2.6bn the amount the company has borrowed from the EIB over four years for investment in infrastructure.
The new 400MW plant will be one of the largest and most efficient in Ireland and according to the ESB will help meet the country’s growing electricity demand.
It will also help reduce the environmental impact of electricity generation by using natural gas while its high thermal efficiency technology will be up to 20% more energy efficient.
EIB vice president responsible for lending operations in Ireland, Plutarchos Sakellaris said promoting energy efficiency was a priority for the EIB and one which this ESB project fulfilled.
“The natural gas turbine will contribute also to security of energy supply in Ireland and by replacing older, less efficient power plants will help to meet the country’s goals for emissions reductions.”
Its construction will employ about 500 people and the new and existing plant at Aghada will be operated by a combined workforce of 80 people. The electricity will serve the all-island Single Electricity Market established last November.
The EIB, the EU’s long-term lending institution owned and funded by member states, has lent over €2.6bn to support key investment in Ireland between 2003 and 2007.
Last year alone the bank signed over €345m for regional development, energy supplies and transport systems as well as supporting small and medium sized enterprises. This year it lent €200m to develop Dublin Airport.
The Financial Times reports that the European Union’s proposal on Wednesday for a €200bn economic stimulus plan for the bloc was met by immediate doubts on whether member states would back the measures aimed at avoiding a deeper recession.
The proposal envisages that about €170bn ($220bn, £136bn) would be contributed by the bloc’s 27 member states through tax and infrastructure plans. The European Commission and the European Investment Bank would provide the remaining €30bn, partly through the accelerated pay-out of selected spending programmes.
The package, which is larger than expected, represents about 1.5 per cent of the EU’s gross domestic product. It needs to be reviewed by EU finance ministers next week and by government leaders in mid-December.
Economists and politicians quickly questioned whether all member states would step up as required or whether individual governments’ responses would diverge from the Commission’s suggested measures.
“Angela Merkel [the German chancellor] and other conservative leaders such as [Silvio] Berlusconi [Italy’s premier] may well water down the plan and refuse to make the necessary national investments,” said Poul Nyrup Rasmussen, the former Danish prime minister who heads the Socialist party in the European parliament.
Analysts at Capital Economics, the consultants, said: “The proposed boost has yet to be agreed by member states and would sadly not do enough to bring European economies out of the gloom for some time anyway.”
Business Europe, the main business lobby group in Brussels, agreed with the proposals but said a “clear commitment from EU member states” was needed to implement stimulus packages of at least 1.2 per cent of GDP.
The proposal also failed to impress investors, with most stock markets in Europe trading lower on Wednesday.
As part of the deal, Brussels would give governments scope to exceed the EU limit on budget deficits, which is usually pitched at 3 per cent of GDP, over the short term.
But officials insisted that the EU’s fiscal rulebook, known as the stability and growth pact, was not being suspended. The so-called “excessive deficit procedure” would be started if a budget deficit rose above that figure unless the excess was “close and temporary”.
Joaquín Almunia, the EU economic affairs commissioner, said: “Close means a few decimals, not many decimals.”
Launching the package on Wednesday, José Manuel Barroso, European Commission president, said the Brussels executive was “in a position to offer a plan that is big and bold while remaining strategic and sustainable”.
He said: “It’s the best way to restore citizens’ confidence and counter fears of a long and deep recession.”
Officials also acknowledged that the plan’s impact would depend heavily on actions taken by member states, where economic conditions vary widely. The Commission’s growth forecasts for 2009 have ranged from about 4 per cent in central European states, such as Slovakia and Poland, to negative figures for the UK, Ireland, Spain and Estonia.
The FT also reports that UK ministers will hold “recession summits” on Thursday with Britain’s car and construction industries, both of which are bidding for a multi-billion increase in government support to ease the impact of falling demand and squeezed cash flows.
The two meetings reflect the pressure on the government to follow last month’s £400bn ($615bn) bail-out for the banks with taxpayer-funded aid for other sectors suffering from the downturn. Ministers are sympathetic to the plight of the non-financial industries, particularly in relation to concerns about job losses. But the government is adamant that the banks’ deal was vital to preventing systemic damage to the wider economy and does not set the precedent of an open cheque book for sectors or companies in trouble.
Pleas for support will be assessed initially by Peter Mandelson, the business secretary, against a range of criteria, such as the impact on regional economies. Any decisions on state intervention will feed into the revised industrial policy being drawn up by him.
The banks’ continued reluctance to lend will loom over both of Thursday’s meetings. The collapse in mortgage finance is set to dominate a breakfast summit that Gordon Brown is hosting for the Home Builders Federation, the Federation of Master Builders, the CBI employers’ organisation and the Council of Mortgage Lenders. Lord Mandelson and Margaret Beckett, the housing minister, will attend.
As well as urging ministers to step up pressure on the banks to free up lending to homeowners, the trade bodies will hope for more direct state funding. The Home Builders Federation stressed its disappointment on Wednesday night with this week’s pre-Budget report, saying the extra £150m to help deliver social housing was painfully inadequate.
The motor industry, meeting Lord Mandelson at lunchtime, is seeking substantive support. The Society of Motor Manufacturers and Traders and Retail Motor Industry Federation, representing UK carmakers and automotive retailers, wrote to Alistair Darling, the chancellor, last week to seek short-term financial aid and policy measures to help the industry.
Car manufacturers want a state-guaranteed credit facility, to ensure their manufacturing operations can call on funding and keep investing in research and development, in spite of the fall in new car sales by more than a fifth this autumn.
“It’s about a bridging exercise,” said Paul Everitt, the SMMT’s chief executive. “In normal circumstances, we would go to the bank and find a way through this but we just can’t do that at the moment.”
All of Britain’s major carmakers have cut production and announced temporary plant shutdowns due to collapsing sales in Britain and on export markets. Many dealership groups are falling into financial losses and some are laying off staff because of collapsing sales margins and volumes.
The Tories are advocating a government-backed credit insurance scheme to support business lending. Alan Duncan, the shadow business secretary, said: “The motor industry is clearly very vulnerable and efforts should be made to stop the whole supply chain of payments seizing up.”
The New York Times reports that for the first time since last spring, the Dow Jones industrial average and the Standard & Poor’s 500-stock index managed to advance for four consecutive days.
The Dow rose 247 points Wednesday, led by big gains at General Motors, the beleaguered auto giant, and the aluminum giant Alcoa.
Investors seem to have regained a bit of confidence since the government threw another multibillion-dollar lifeline to Citigroup on Sunday night, easing fears of an October-style decline in the markets. Soothing words from a host of federal officials, including President-elect Barack Obama, who held a news conference on the economy every day this week, also helped calm the markets.
On Wednesday, Mr. Obama announced that Paul A. Volcker, the former Federal Reserve chief, would lead a new economic advisory committee for the White House. Stocks, already up in the morning, moved higher after the news.
Volume was light on Wednesday, however, and many investors left for their Thanksgiving travels before the closing bell.
Some Wall Street traders worry that the market could falter again as the economic slump deepens. Nevertheless, good news of any sort is welcome on Wall Street these days, and there were a few encouraging signs that maybe, this time, the strength would stick.
The optimistic mood survived an early challenge from a series of bleak economic reports, including the biggest monthly downturn in consumer spending since the terrorist attacks of 2001. Jobless claims stayed high, near the levels traditionally associated with a recession, and durable goods orders plunged. Sales of new homes were weak as well.
The Dow Jones industrial average gained 247.14 points, or 2.91 percent, to 8,726.61. The broader Standard & Poor’s 500-stock index rose 30.29 points, or 3.53 percent, to 887.68. The Nasdaq composite index climbed 67.37 points, or 4.6 percent, to 1,532.10, on strength in shares of technology companies.
Shares of General Motors gained 35 percent, or $1.25, to $4.81, on speculation that the automaker might receive a rescue package from the government.
Alcoa jumped 8 percent, or 78 cents, to $10.48.
The markets will be closed on Thursday for Thanksgiving Day, and will reopen for a shortened session on Friday.
Oil prices rose $3.67, to settle at $54.44 a barrel in New York trading.
The energy sector was the leading gainer among industry groups, following the surge in crude oil prices. Analysts said a move by the Chinese government to cut interest rates could stimulate the country’s economy and revive demand for energy.
OPEC ministers are set to meet over the weekend to discuss measures to support oil prices.
Exxon Mobil jumped $2.78, or 3.6 percent, to $80.89 a share, and Chevron rose $3.40, or 4.44 percent, to $79.93.
The Treasury’s 10-year bill rose 1 4/32, to 106 19/32. The yield, which moves in the opposite direction from the price, was at 2.98 percent, down from 3.11 percent Tuesday.
Stocks dropped in Europe and stayed mixed in Asia, amid a worsening outlook for the global economy. The FTSE-100 in London lost 0.44 percent; the DAX in Frankfurt was unchanged; and the CAC-40 in Paris fell 1.24 percent.
“There’s starting to be a sense that by the end of 2009 the light will be visible at the end of the tunnel in the U.S. economy,” said Franz Wenzel, deputy director for investment strategy at Axa Investment Managers in Paris. But investors in Europe expect 2009 to be “a lost year,” he said, with a “substantial recession.”
The collapse of a $66 billion hostile bid by BHP Billiton, the world’s largest mining company, for its rival Rio Tinto also weighed on sentiment, he said. BHP announced on Tuesday that it was ending its bid because the credit crisis had made a deal too risky.
The NYT also reports that for more than a year, food manufacturers have been shaving package sizes and raising prices, declaring that they had little choice because of unprecedented increases in the cost of raw ingredients like corn, soybeans and wheat.
Now, with the price of grains and other commodities plunging, it may seem logical that grocery prices will follow. But while prices for some items like milk and fresh produce are dropping, those of most packaged items and meat are holding firm or even increasing. Experts warn that consumers should not expect lower prices anytime soon on most items at the grocery store or in restaurants.
Government and industry economists project that the overall cost of food will continue to climb in 2009, led by increases for meat and poultry. A big reason, they say, is that food companies still have not caught up with the prolonged run-up in commodity prices, which remain above historical averages despite coming down from their highs early this year.
The Agriculture Department is forecasting that food prices will increase 3.5 to 4.5 percent in 2009, compared with an estimated 5 to 6 percent increase by the end of this year.
Some economists project even steeper increases next year. For instance, Bill Lapp, principal at Advanced Economic Solutions in Omaha, said he expected food prices to jump 7 to 9 percent next year.
“For the last 21 months, food manufacturers, restaurants and livestock producers have been absorbing significant costs that in my view are likely to be passed on to consumers in 2009 and beyond,” said Mr. Lapp, a former chief economist at ConAgra Foods.
While predicting future food prices is an inexact science, data released by the Labor Department last week suggested the forecasters might be right.
Overall consumer prices recorded the biggest drop in the history of the Consumer Price Index, but food prices continued to inch upward, albeit at a slower pace than in previous months. The C.P.I. showed that grocery prices rose 0.1 percent in October.
Some of the more visible items on grocery shelves, including produce and dairy products, dropped sharply in recent weeks, but not enough to offset the general trend of rising prices. Restaurant prices rose 0.5 percent in October.
Commodity prices began climbing rapidly in the fall of 2007, and food companies were hit hard by the increases. They tried to slow eroding profit margins by cutting operating costs, making packages smaller and raising prices.
Some companies, like Kellogg and Heinz, have managed to offset the higher ingredient costs and post robust profits by using shrewd commodity hedges and by raising prices without losing many customers. They also benefited from a trend of consumers eating out less and buying more groceries.
But other food companies have struggled. Hershey, for instance, locked in high cocoa prices this year only to see prices drop this fall, analysts say. And meat and poultry companies have been hit by higher feed costs and a limited ability to charge higher prices, at least in the short term.
Now, even though costs for ingredients like corn and wheat have dropped, meat and poultry providers say they still have not raised prices enough to cover their increased costs. And packaged food manufacturers are unlikely to lower prices because commodity costs remain relatively high and they are still trying to rebuild eroded margins.
Michael Mitchell, a spokesman for Kraft Foods, said that the company’s food ingredient costs this year were running $2 billion higher than in 2007, a 13 percent increase, but that the company had raised its overall prices by only 7 percent.
William P. Roenigk, senior vice president and chief economist for the National Chicken Council, said his industry had been losing money for more than a year. Chicken producers are now trying to recover those costs by reducing production, which will eventually alter the balance between supply and demand. “The time is coming when we’re going to see a very significant increase in the retail price of chicken,” he said.
The restaurant industry, which has been battered by a sharp drop in customers, also says it has not been able to raise prices enough to keep pace with the cost of ingredients.
People in the restaurant business said they did not like raising prices during an economic downturn. “If anything in this environment, one would be looking at the ability to offer much greater emphasis on value pricing in restaurant menus,” said Hudson Riehle, chief economist of the National Restaurant Association. “In contrast, exactly the opposite is happening. Our operators are being forced to raise menu prices at the highest rate since 1990.”
Predictions about food prices are subject to change because commodity prices are unpredictable. Ephraim Leibtag, an economist for the Agriculture Department, said food inflation would slow by the middle of next year if commodity prices remained low. “Right now the forecast is about 4 percent, but that would be lowered if we do not see any surge in commodity costs over the next few months,” he said.
A reason that overall food prices are expected to continue increasing is the lag between price increases for basic commodities and for finished food products in the grocery store, particularly for meat and processed foods. Consider the price of corn, an ingredient in things like cereal and breaded shrimp. It was not too long ago that corn hovered around $2 or $3 a bushel.
But corn prices began climbing last fall and peaked around $8 a bushel in June. They have since dropped to about $3.50 a bushel, still above the historical norm. Some food manufacturers locked in prices for corn and other commodities in the spring and summer, fearing that prices could go even higher. But prices fell instead, and they are now stuck with the higher prices until their contracts expire.
When costs go up for livestock producers, they are often unable to immediately raise prices because those prices are set on the open market, which is dictated by supply and demand. Instead, they begin reducing the size of their herds or flocks, which eventually leads to less meat on the market and higher prices. But reducing livestock production can take months to years, and in the interim it can actually suppress prices as breeding animals are slaughtered to reduce production.
The prospect of more food inflation is inflaming a debate over its causes. Many food manufacturers and economists maintain that one culprit is government policies promoting the use of ethanol fuel made from corn.
About a third of the corn crop is used for ethanol, putting ethanol producers in competition with livestock farmers and food manufacturers. The result, they contend, is that prices for corn are now higher and more volatile.
“The connection of oil prices to agricultural commodities is new as of 2007, and it’s a major game changer for those in the food production business,” said Thomas E. Elam, president of FarmEcon, a consulting firm.
But ethanol advocates counter that the food industry’s arguments have been proved false, saying that corn prices have declined as ethanol production is increasing. Matt Hartwig, spokesman for the Renewable Fuels Association, an ethanol industry group, said food companies were “very quick to tell the American public that they had to raise food prices because corn was so expensive, and that the reason corn was so expensive was corn-based ethanol.”
Mr. Hartwig added: “Now, clearly, we know that relationship doesn’t exist. If ethanol isn’t the reason, what is the real reason for food prices going up?”
