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US tax law 'error' delays investment; Mars plans to adopt greener practices

TOP NEWS

* A coalition of U.S. retailers and restaurants asked the country's congress to fix the "drafting error" in December's tax bill saying that it is delaying investments across the economy, Reuters reported. Members of Congress admitted that the law, which requires depreciation to be stretched out over 39 years, was an error. The alliance includes companies like McDonald's Corp., Target Corp., Macy's Inc. and Red Robin Gourmet Burgers Inc. The officials at the tax-writing panel could not be reached for comment immediately, Reuters added.

* U.S.-based confectioner Mars Inc. plans to spend $1 billion on adopting greener practices that add to sustainability and help increase profits, Bloomberg reported. The company intends to invest in increasing the efficiency of its operations when it comes to the usage of water and energy. The confectioner also plans to use a part of this fund to simplify its supply chain and buy directly from the farmers, the report added.

FOOD RETAIL AND DISTRIBUTION

* South Korea's hypermarket chain E-Mart Inc. signed a letter of intent with the Philippine department of agriculture to expand sales of the country's agricultural products in South Korea, Yonhap News Agency reported. The deal is likely to boost the company's sales by 10%, the report said.

* Australian grocer Metcash Ltd. expects to book an A$352 million impairment to goodwill and other net assets for the year ended April 30, due to plummeting sales. The company said the impairment charge comprises A$318 million of goodwill and other intangibles and A$34 million of other net assets in its supermarkets and convenience arm.

PACKAGED FOODS

* Hindustan Unilever Ltd., the Indian subsidiary of Anglo-Dutch consumer goods company Unilever NV, announced its plans to integrate its foods and refreshments categories in South Asia, effective July 1. The company said the integration would increase its organizational agility and better serve local consumers while generating synergies.

* Italy-based Barilla G. & R. F.lli S.p.A. is injecting €1 billion, over five years, as a part of its strategy to expand and launch new products amid the burgeoning consumer demand, Reuters reported. The company, whose pasta and sauces account for about 60% of its total sales, is also set to invest in pasta plants in the U.S. and Russia, which are the key markets for the group, Reuters added, citing Barilla's chief strategy officer.

* Swiss chocolatier Barry Callebaut AG signed separate letters of intent with Ghana Cocoa Board and Côte d'Ivoire's Conseil Café Cacao to work together on a model for sustainable cocoa farming. Under the arrangements, Barry Callebaut and the African groups will focus clearing and replanting cocoa trees infected with the swollen-shoot virus, as well as on agroforestry, particularly on income diversification for cocoa farmers and planting shade trees. The parties also agreed to collaborate on making cocoa cultivation more attractive to women cocoa farmers and young cocoa farmers. In addition, they will work on community-led initiatives to eradicate child labor.

BEVERAGES

* Pernod Ricard SA CEO Alexandre Ricard expressed his optimism in the Chinese market amid growing demand for premium drinks, Reuters reported. The French distillery estimates sales in China to grow by as much as low-double figures in percentage terms in the coming years, Ricard told the news agency in an interview.

* Six Australian winemakers including Treasury Wine Estates Ltd. urged Prime Minister Malcolm Turnbull to visit China and end trade tensions between the two countries as it is impacting the export market, Reuters reported. Australia's trade minister Steven Ciobo said Turnbull had "indicated a willingness" to visit China, but any trip had to be "married against a number of other competing demands in terms of time," the report added.

AGRICULTURAL PRODUCTS

* Mexico unveiled a detailed list of tariffs on U.S. food and steel products in retaliation for U.S. levies on aluminum and steel. A tariff of 20% will be imposed on a list of pork goods, including legs, shoulders and ham; 20% to 25% on different types of cheese; 20% on cranberries, potatoes and apples; and 25% on bourbon whiskey, according to the list included in a decree published in the government's official gazette. A White House economic adviser said June 5 that U.S. President Donald Trump was looking to deal with Canada and Mexico separately as it renegotiates the North American Free Trade Agreement.

* India is planning measures to cut a growing sugar surplus and to support loss-making sugar mills and cane growers across the country, Reuters reported, citing country's food minister Ram Vilas Paswan. The government plans to build a 3 million stockpile and grant soft loans worth 45 billion Indian rupees to help millers expand their ethanol production capacity, Reuters added.

INDUSTRY NEWS

* Global dairy prices slipped from a nine-month high at a fortnightly auction held early June 6, after strong supply curbed buyers' willingness to pay for products such as whole milk, Reuters reported. The global dairy trade price index dropped 1.3%, with an average selling price of $3,487 per ton, after jumping 1.9% at the previous auction, the report said.

* Japanese food, beverage and pharmaceutical company Yakult Honsha Co. Ltd. agreed to develop and commercialize Verastem Inc. cancer drug duvelisib for use in Japan, the U.S.-based biotechnology company said in a release. As part of the exclusive licensing agreement, Yakult will release a one-time up-front payment of $10 million to Verastem, plus an additional $90 million in milestone payments, in exchange for rights to commercialize and develop duvelisib in the country.

The day ahead

Early morning futures indicators pointed to a mixed opening for the U.S. market.

In Asia, the Hang Seng was up 0.53% to 31,259.10, while the Nikkei 225 rose 0.38% to 22,625.73.

In Europe, around midday, the FTSE 100 rose 0.37% to 7,716.06, and the Euronext 100 shed 0.14% to 1,061.64.

On the macro front

The bank reserve settlement report, the MBA mortgage applications report, the international trade report, the productivity and costs report, the EIA petroleum status report and Treasury STRIPS are due out today.

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