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Quest Means Business
Anthony Kennedy Retiring from U.S. Supreme Court; U.S. and Russia Agree to Trump-Putin Summit; Germany Eliminated from World Cup Tournament in First Round; Brazil Overcome Serbia 2-0 to Take on Mexico in Round of 16; Switzerland Draw Against Costa Rica to Take on Sweden in Round of 16; Joe Jackson, Father to Pop Icon Michael Jackson Dies at 89; Business Groups Call for "Urgent Progress" on Brexit; U.K. Beer Rationed Amid Carbon Dioxide Shortage; England's World Cup Success Gives Boost to U.K. Pubs; Food Brands Combine in Mega Merger; Over $200 Million Worth of Goods Seized from Former Malaysian PM's Properties. Aired 4-5p ET
Aired June 27, 2018 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, HOST, QUEST MEANS BUSINESS: What started as a good day of gains has evaporated after lunch, and the market is off over half a
percent. Tech stocks dragging the market lower. One, two, three. Lost it, it wouldn't have been good on Wednesday, it's June 27th.
Tonight, a historic shift in the US government, Donald trump will now have a chance to pick his second Supreme Court justice, and in doing so could
fashion the court for the next several decades.
Italy's Deputy Prime Minister slams the dictatorship of finance, our exclusive interview on tonight's program. And the US takes on measures for
Chinese trade. A moderate approach which promises to hit everyone.
I'm Richard Quest live in the glorious New York City, the world's financial capital, where of course, I mean business, even on a bad day.
Good evening, tonight the search for the next US Supreme Court justice is now underway as Anthony Kennedy announced he was retiring. Kennedy,
Justice Kennedy is 81 years old. Although largely conservative, he has been seen as the swing vote in key decisions of the court. For instance,
on gay marriage, on abortion, on affirmative action, it has been Justice Kennedy siding with the more liberal justices has given them their
majority.
However, in the big picture, this is the extraordinary event. It gives Donald Trump a chance to shift the US Supreme Court, the highest court in
the land, the ideological balance for generations to come.
The President announcing that Kennedy is to leave, so is the search begins now. Now, Ariane de Vogue is outside the Supreme Court in Washington. We
can sum up this in one simple sentence, Ariane, this is the chance for Donald Trump to bake in a 5-4 conservative majority for the foreseeable
future.
ARIANE DE VOGUE, US SUPREME COURT REPORTER, CNN: Well, you are absolutely right, Richard because he was put on the bench by a Republican. And
Kennedy did vote with the conservatives, as you said. But he was considered the swing vote, particularly on issues like abortion and
affirmative action.
So now President Trump in this second vacancy, not only does he get to choose somebody who will probably be more conservative, but this is what's
key -- younger, because four of those Supreme Court justices are in 70s and 80s, so we're talking about a change that could last for decades in
this building behind me, Richard.
QUEST: The argument and let's get into the details of this. The argument that two years ago, the Republicans refused to allow Obama to have a
nominee considered because it was an election year. Now, obviously, that argument is going to be thrown back in the Republicans' face.
DE VOGUE: It is going to be thrown back into their face, but they are in control. And it is a very tight control, but they are in control. And
already, the fight has started. I've already been getting e-mails from conservatives who say, "Yes, we'll have hearings and he'll be on the bench
by October." And then by the progressive groups who are still so scarred by the fact that President Trump's nominee, Merrick Garland never did get a
hearing. And I've just been covering the last couple of weeks of this Supreme Court term, and there have been so many 5-4 cases, including as you
saw, the travel ban. And today, a really big case concerning unions. Those were 5-4 and they really show how important one vote on this court can be.
QUEST: Ariane, I mean, let's just develop that for our final part of the discussion. To viewers around the world that do not fully appreciate the
significance of today, this has been the issue, this has been the big talking point. This has been the -- if you like, the most controversial
moment that was always going to happen in Donald Trump's presidency, when would he get another Supreme Court justice nominee? Wouldn't you agree?
DE VOGUE: I would agree, and I would tell you this, when Justice Antonin Scalia suddenly died, he was a conservative and eventually, Trump replaced
him with a like-minded conservative. Now, some would say, Gorsuch might be even more conservative than Scalia, but look what's happening here. Now,
he is getting the seat of moderate conservatives. Somebody who sometimes sides with the liberals, not this term, but he has in the past.
So what President Trump is getting is a chance to move things to the right, not replace somebody who is like minded with somebody else.
[16:05:16]
DE VOGUE: He's getting a chance to move the court to the right. And as we are seeing, so many of Trump's policies in the courts right now lighting up
the courts across the country, that's where it makes the difference. That's why this is such a big deal today.
QUEST: Really appreciate your analysis and explanation tonight, Ariane for putting it into perspective for us, thank you.
DE VOGUE: Thank you.
QUEST: What a day. What a day. Sporting downfalls. Well, look before the Kennedy decision to retire came out, there really was only one lead
story that we were going to bring to your attention, it had to be the sporting downfall of Germany, the reigning world cup champions being
knocked out in the group stage, the first round of the World Cup.
Things have gone badly pretty much from start to finish. The Germans needed a win. Didn't even come close. That was the first one. That was
the first. And to add insult to injury. South Korea pulled off a stunning upset in the final moments. Two (inaudible) goals sealed Germany's fate
and leaving them at the bottom of the group. For many fans, German fans, shock. In Berlin, the mood was somber and critical.
(START VIDEO CLIP)
ROBERT KOESCHINGER, FAN: (Through an interpreter). The entire group stage played poorly from the very beginning. The first match was weak. The
second as well. And we don't even have to mention today. We definitely deserve to be out. This has to be said clearly. Certainly there have to
be some changes.
(END VIDEO CLIP)
QUEST: Now, it's always useful and often dangerous to make mass prognostications about a country as a result of its football performance,
but for Germans, the timing of this loss is especially painful. Angela Merkel's government is in danger of disintegrating if she can't quell the
dissent over migration within her coalition. The nation looked to its football to offer relief, expectations were high. Commerce Bank and UBS
each predicted Germany would win. And now the German newspaper bell, "Our World Cup nightmare has become a reality."
It is difficult to talk to the next two guests on this program. One doesn't want to intrude onto private grief and misfortune. Fred Pleitgen
is in Moscow, and Julian Reichelt is the Editor-in-Chief of "Bild" who joins us live via Skype from Berlin. Julian, start with you. The mood in
Berlin tonight?
JULIAN REICHELT, EDITOR-IN-CHIEF, BILD: Well, Richard, Berlin is pretty much in shock. What happened tonight is something that has never happened
to Germany before. It's a truly historic night in a very bad way. Being eliminated in the first round of such a time was something that was just
unthinkable. The debate before the tournament here was, "Are we going to make it to the final? Who are we going to face in the final and how are we
going to be able to defend the title that Germany won four years ago?" And as you can tell from my language, I still haven't recovered. I still say,
"we." That is how pretty much every German approaches this tournament. It's not a team. It's us. That's how Germans see it, and so every German
tonight feels like being personally eliminated from the tournament.
And the streets of Berlin literally are empty. You see a few fans walking home from Fanmeile, what we call the public viewing. The mood there was
depression. And, you know, the city really is really in shock, that's also true for all of the country.
QUEST: And Fred Pleitgen, forget journalistic neutrality for the moment. Not a good day for you, mate, not a good day?
FREDERIK PLEITGEN, CORRESPONDENT, CNN: Yes, no, I've certainly had better days, Richard, than this one. And I have to say I fully agree with Julian,
I think that the whole country in Germany is looking and sort of soul searching a little bit, and I think that there's sort of three areas that
in my grief that I've had since this happened that I'm sort of identifying. I think on the one hand, I think that Germany's coaching staff might have
gotten a little complacent over the years, especially after the success in 2014.
I think that the strategy and the tactics that worked in 2014, that passing game and then waiting for their chance is something that worked back then.
I think other teams may have figured that out. And then also, I'm not sure that the folks who were watching this believe that the players were really
in it as much as they were in 2014. But I also think, Richard, quite self critically, I think that the fan base also will be asking itself some
questions as well. I think a lot of German fans were very critical of the team when things weren't going well at the beginning of the tournament. I
think Germans have become very, very used to their team winning.
[16:10:07]
PLEITGEN: And I was at a couple of friendly matches, it actually was before the last (inaudible), but it was sort of in the run up to all of
this, and it really feels as though, there is much less noise coming from the fans. I think people are just so used to winning that it's something
that they expect too much.
QUEST: Right, let's take that idea. And I am trying -- Julian, I'm trying not to stretch the analogy too far. But I think it is valid. Because I
remember being in the UK, of being obviously in England, and having similar analogies about the English team. There is a feeling at the moment that
Germany has lost its way. Economically, it's still maybe the strongest country, but you've got the issues with trade and cars. You have the
appalling diesel gate scandal which has got to -- though, we really don't know the full length of it.
You've got Angela Merkel's coalition hanging on by a thread. You have got the migration question where nobody else seems to be able to work out
what's next. And now, you've got this. Germans must be wondering why things are going wrong.
REICHELT: You know, I couldn't agree more, Richard. We've never been in this situation, in Germany, that you know, with Angela Merkel on the other
side, and (inaudible) on the other side, who seem to be there basically forever, and now within one week we wonder who is going to get fired first
of the two of them. That is certainly the situation no one would have expected three or four weeks ago.
The fun fact, last time Germany was eliminated in the first round in a tournament in 1998, that was the year that Chancellor Helmut Kohl didn't
get re-elected so that may be a bad sign for Merkel there, but there is another interesting and maybe more economic point that you also brought up.
What we are seeing in this tournament in which Germany wasn't ready for is kind of the globalization of football.
There are no weak teams anymore. Everyone is adapting to tactics. There is a system of playing football. Football has become a systematic sport
that every -- that also small nations in the world is adapting. So South Korea or Sweden or Mexico would have been easy opponents a few years ago,
but today, they are almost even and we cannot rely on our job in this just FIFA, you know, we have to make an effort and that effort wasn't made in
this tournament.
QUEST: Gentlemen, thank you, I commiserate with you having been there with England on many occasions. I commiserate with you. I'm sure Germany will
be back before England will be. Who knows? All right, as we continue tonight, it's crunch time for Angela Merkel at Thursday's European Summit.
The German Chancellor has to reach an agreement -- a compromise, if you like, on immigration with the European counterparts. It's eluding them so
far. The consequences back home could be very severe. She will have to convince Italy's new populist government that it's a label that the
Interior Minister Matteo Salvini says he wears proudly. He is populist and proud of it. As he told exclusively Melissa Bell.
(START VIDEO TAPE)
MATTEO SALVINI, INTERIOR MINISTER, ITALY: (Through an interpreter). We have to understand what we mean by populist. It's used as an insult, but
for me, it's a compliment. If there is a lesson from Italy, it is that people want identity, security and jobs. There is a beautiful reaction of
the people against the dictatorship of finance that wants an immigration out of control.
MELISSA BELL, CORRESPONDENT, CNN: That's how Matteo Salvini explains his rise to power. Power that his far right anti-immigrant lead party now
shares with the populist five-star movement. On the campaign trail, Italy's new Interior Minister used hard line rhetoric to fire up the
voters.
Now some fear that in power, it could lead to a return to some of the darkest days of Italian history.
SALVINI: (Through an interpreter). My problem is to enforce the law everywhere, even in that Roma camp in Turim that the (inaudible) have
checked in the last hours finding every kind of illegality. We are talking of 40,000 people living in Roma camps who have problems with an easy
solution, who is entitled to be in Italy stays in Italy.
BELL: Which has why the Interior Minister has closed Italy's ports to NGO ships carrying migrants. His aim, to force the rest of Europe to make the
migrant crisis its own rather than leaving it on Italy's door step. By getting tough, Salvini believes that Italy is finally calling the shots,
not only on immigration but also, on the future of Europe itself.
SALVINI: (Through an interpreter). With nice words we never obtained anything. And with this month of government, with our actions, we managed
to be listened to. The Spanish intervened, Malta must intervene and so do the French, the German, the Dutch, and then it's clear that we need a
different kind of politics. We need to revisit the Dublin rules. We need to invest in Africa, but I think, we obtained more in this month than the
previous six years of chatter.
BELL: Europe as Emmanuel Macron has said represents values as well. Values that you don't share with Presidents like Emmanuel Macron. How is
that going to play out in the future? It's difficult to see how the whole project can survive the kind of challenge that you are presenting it with?
SALVINI: (Through an interpreter). There are people who speak of values, but don't put them into practice. We, as leaders propose to include in our
Constitution, our Judeo-Christian roots because we have a history, we have an identity, language, culture, tradition.
[16:15:13]
SALVINI: So people like Macron who talk about values but then doesn't recognize these values cannot give lessons to anyone, certainly not Italy.
BELL: It is a message that Italy will be taking to EU Summit this week, that it is not the populists that need to change, but rather time that
Europe listened to the populists. Melissa bell, CNN, Rome.
(END VIDEO TAPE)
QUEST: President Trump is handling the trade war battle into Congress. The White House wants permission to block more foreign deals with American
companies. It's the way in which they are going to do it, which is fascinating. And the gas, that is in the industry drinking beer, and there
is a shortage of CO2, and that's giving a World Cup headache.
Look at the numbers, they tell the story, but Donald Trump appears to be de-escalating the trade war with China at least for now. The White House
decided it won't put a blanket limit on the number of Chinese investments allowed into the United States. Now, when that was all made clear this
morning, the markets really liked that. As you can see early on, we get a nice spike just about 11:00. And tech was even rallying.
However, when you and I were together for the "Quest Express," the FANGs were up by a quarter of a percent or so, but as the day went on, everything
sort of turned pear-shaped. The FANGs stalled off and the selling accelerated to where I do believe, we're at the low point of the day, down
165 points. People didn't want to go overnight being short.
Energy stocks rose sharply on the back of a 3 percent rise in the price of oil. But that of course was the result of the decision by US to ask
countries not to import Iranian oil, so higher oil prices will affect the US economy, but they also boost it. So you can see straight away, Chevron
is up 1 percent, ExxonMobil. But if you look anywhere else, now even those stocks that would gain as a result of the more mild action being taken
against China, such as Boeing, Cisco, United Healthcare and Caterpillar, they still were not able to counteract the selling pressure that was
clearly felt in the market today.
And so they are down just a fifth of a percent or a quarter of a percent or whatever. The big losers are right at the bottom. They are tech stocks.
Intel is done. Microsoft was down. Imagine Technologies was down, IBM was also off sharply. So, instead of curbing Chinese investments, the Trump
administration is turning to Congress and it's asking it to beef up what's known CFIUS the Committee on Foreign Investments in the United States.
CFIUS invests any deal giving foreign investors control of American businesses.
[16:20:05]
QUEST: So, for example, China's financial -- Ant Financial wanted MoneyGram, when Ant Financial wanted MoneyGram, the United States said no.
CFIUS refused and didn't approve. Canyon Bridge Capital was another example, it wanted Lattice which is a US chip maker, in that case, CFIUS
blocked it. Canyon Bridge didn't get Lattice. We need to report about this, how significant is the use of CFIUS as opposed to any other
instrument -- perfect man for the job is Patrick Chovanec who joins me. Good to see you, sir.
PATRICK CHOVANEC, CHIEF STRATEGIST, SILVERCREST ASSET MANAGEMENT: Good to see you.
QUEST: Were you surprised, Patrick that they went for using CFIUS plus, if you like, by enhancing this existing body rather than using new executive
orders or administrative measures?
CHOVANEC: So there has been some talk for some time about both expanding and tightening up CFIUS, and this actually goes back before the Trump
administration. There have been battles between Congress and the White House during the Bush administration, during Obama administration about how
tough to be on foreign investment, how tough to scrutinize it. So it doesn't surprise me at all that Congress is looking at passing a law to
adjust or change CFIUS.
What did surprise everyone, surprised markets at the beginning of the week was this new proposal which was talked about of a ban on any company that
had 25 percent Chinese investment investing in any US company with strategic technology, which could pretty much mean anything.
QUEST: The White House decision to go the CFIUS route in that sense.
CHOVANEC: For now.
QUEST: For now.
CHOVANEC: But a lot depends on how much tougher they make it. I mean, I suppose what I'm suggesting is you could have the same effect by a
different route?
CHOVANEC: Yes. So, some of the things that they are talking about are -- there has been talk for sometime about expanding the definition of national
security. Traditionally, the US has -- CFIUS has defined national security very narrowly, by the things affecting the military and things affecting
law enforcement.
QUEST: But we know from the tariffs on steel and aluminum, national security was used under section whatever it is -- that you can -- whatever
it is, trade sanctions.
CHOVANEC: So the Trump administration, much like China has a much broader view of national security and the things that are affected by it. Perhaps
extremely expansive. The other thing that they are talking about is applying the CFIUS review process to outbound investments. So it's always
been about if a foreign company wants to buy a US company, now if a US company wants to make an investment in another country and it involves some
kind of transfer of technology, they might be able to veto that.
QUEST: But I want to just take you into an area we haven't discussed before but I'm sure you'll have some thoughts in terms of the business
environment. Donald Trump is going to get to appoint a second Supreme Court nominee with Kennedy retiring. You are all obviously familiar with
this. What would the financial world want? I mean, on the one hand, a conservative tends to be better for business. We saw today a 5-4 decision
on union dues that came down from the Supreme Court.
CHOVANEC: Right, so the Roberts Supreme Court has been business friendly already. That was even with Kennedy who tended to be a swing vote more on
social issues. And, actually tended to side on the pro business side with the conservative majority. So, in terms of business issues, it probably
isn't as much of a swing vote as it is for some of these social issues that obviously strike a chord.
QUEST: Good to see you, sir. Thank you very much indeed.
CHOVANEC: Thank you.
QUEST: Disney has received approval from the US Justice Department to buy most of 21st Century Fox. That's going to make life difficult for Comcast
which still has a rival bid at the table. Hadas Gold is in Washington.
We talked earlier on "Quest Express" about the rather unusual situation where regulatory approval has been given, but the 21st Century board still
has to formally accept and shareholders hasn't voted yet.
HADAS GOLD, POLITICS, MEDIA AND BUSINESS REPORTER, CNN: That's unusual. What's probably even more unusual, Richard, is the speed at which this was
approved. This was approved just about six months after the merger was announced. Compare that to AT&T trying to buy our now former parent
company Time Warner now called WarnerMedia, that deal took two years to close partly because of that trial that we went through where a judge
ultimately ruled that the Justice Department in the US failed to prove that this deal would be anti-competitive or violate anti-trust law.
And that's -- a lot of people are paying attention to that timeline of how this was so quickly approved. Now, Disney has agreed that it would divest
22 of Fox's regional sports networks because of anti-competitive concerns because Disney already owns ESPN, and so they will do those. Those are
actually quite profitable, but they have readily agreed to that, and as you said, this is a big problem for Comcast, because one of the concerns that
21st Century Fox...
[16:25:15]
GOLD: ... had about Comcast coming in was the regulatory issue. Comcast said, "Well, if AT&T and Time Warner was approved, we'll be approved as
well." But this is just another notch in Disney's column as being sort of the favored one to ultimately possibly own these 21st Century Fox assets.
QUEST: And of course on the disputed question of a horizontal merger versus a vertical merger, the Disney deal is quite straightforward
horizontal merger because Disney already has studios and it has networks and it has cable stations. There is less of a horizontal nature, it's more
vertical on the other side.
GOLD: Exactly. I mean, if you think about the movie studios, you're pretty much losing one of the major movie studios now all being combined
into one. Now some fans might be a fan of that, they might have some interesting crossovers, but for anti-trust experts, this does raise some
interesting questions.
QUEST: But we are getting ahead of ourselves, Hadas. We are getting ahead of ourselves. The Board of 21st Century Fox hasn't accepted.
GOLD: That's true. You are right.
QUEST: They've said they are going to accept it, but they haven't accepted it yet.
GOLD: You are exactly right. This is not over. I think that you are right that a lot of people are probably getting ahead of themselves and
seeing Disney as the ultimate owner, but we are still expecting probably a comeback bid from Comcast, and they have made all indications clear that
they're going to go down to the mat for these assets, and they really want them, and I've said, I think we are going to hit $80 billion for this.
QUEST: Can't be a good takeover bid especially in the middle of the summer. Hadas, good to see you, thank you.
GOLD: Thank you.
QUEST: The top business stories are yours in 90 seconds at the "Daily Briefing" podcast updated twice a day before and after the closing bell.
Ask Alexa or Google for CNNMoney flash briefing, and you'll hear it again and again.
Coming up, businesses are ramping up with pressure on negotiators to reach a Brexit deal and avoid what they say is a potential catastrophe.
Hello, I'm Richard Quest. "Quest Means Business." A lot more in a moment, when Malaysian police seize almost a quarter of a billion dollars worth of
goods from the former minister's house -- that's a quarter of a million. And British football fans and the heat wave and the World Cup. And
(inaudible) are running out of beer, well, at least potentially they are. You are watching CNN around the world, around the clock, and on this
network, the facts always come first.
Major developments in the US legal system with the announced resignation of the US Supreme Court Justice Anthony Kennedy. He is retiring as a
conservative who provided the key swing vote on many landmark cases.
Sometimes arguing with the equal justices and giving them a majority. Donald Trump says the search for replacement has began, it gives him a
chance to change the ideological makeup of the most important court in the United States. The change -- that change lasts for generations.
A summit between Donald Trump and Vladimir Putin of Russia has been agreed. The two men will meet. Mr. Putin and the U.S. National Security Adviser
John Bolton finalized the plans in Moscow, the details are to be announced on Thursday.
Germany has been knocked out of the World Cup in the first round. The reigning champions finished bottom of their group after a 2-0 loss to South
Korea. The Koreans got the 2 goals in the final minutes of the match. And Brazil minutes ago booked their place in the final 16, and will be leading
the group and easily, took down Serbia 2-0.
As they now faces Mexico in the knockout stage on Monday. Switzerland advances after drawing 2-2 against Costa Rica. The next in the knockout
stage is going to the Swiss, the Swiss take on the Swedes on Tuesday. This wasn't the Swedes.
Joe Jackson; the patriarch of the pop music Jackson family has died at the age of 89. He was the hard-driving force behind his children's early music
careers including the pop legend Michael Jackson. His daughter Latoya tweeted today, "you gave us strength, you made us one of the famous
families in the world."
Let's head into our top story, the U.S. Supreme Court's swing vote Justice Anthony Kennedy is retiring. He famously struck down any limits in
elections, spending for corporate citizens in United. He wrote the landmark opinion that made same-sex marriage legal in the United States.
Some of the decisions that he has made or has the led the way or on giving the vote for have now become the orthodoxy of the U.S. legal system. Joan
Biskupic is a Supreme Court -- Cnn's Supreme Court analyst, she joins me from Washington.
So why is he going? All right, he's in his 80s, but I mean, why did he decided -- I mean, he obviously knows the core issue of the potential to
shift the ideological balance of the court, so why is he gone?
JOAN BISKUPIC, LAWYER & CNN SUPREME COURT ANALYST: You know, I think you said it right when you opened the introduction. He's going to be 82, you
know, he is -- he was getting wearier, you know, we can see that from the bench. I think he was -- it just -- it felt like time, it's been 30 years.
I personally thought he would stay because of this key role he has had. You name the issue and Anthony Kennedy has dictated the outcome. You run
through some of those that were his -- he went -- fought with conservatives and liberals, he said the law is a land in America and many people called
it the Kennedy court more than --
QUEST: Right --
BISKUPIC: They did the -- you know, the Robert's court. But I do think it just comes down to age and also I'm going to mention something politically.
I know that the White House and Republicans were putting a lot of pressure on him, saying, you should go now just in case the Senate switches to a
Democratic majority, I think that's a real long shot.
But you know, maybe he --
QUEST: Right --
BISKUPIC: Thought that the political timing was also --
QUEST: Yes --
BISKUPIC: Right with the personal timing.
QUEST: We could end up with or the U.S. could end up with a situation with, you know, the five form majority is baked in because a conservative
is put in his place. And you can even get a 6-3, but you could end up in the future with the three female justices always being the ones in the
minority.
BISKUPIC: It's so true, now right now, we have a fourth liberal who happens to be male, Stephen Breyer, but he turned -- he turned 80 this
year, and you know, you just -- and also Ruth Bader Ginsburg is 85, so you don't know what's going to happen at that end of the bench.
And the -- what Donald Trump has done is exactly what --
QUEST: Yes --
BISKUPIC: Republican presidents in the past have done, look for youngsters, you know, relative youngsters. If you're -- if you're only 60
or 50 or 40, you're a Spring chicken on the United States Supreme Court.
QUEST: Oh, you made me feel young, thank you. So finally, look, help our viewers around the world understand the significance of this because all
countries have Supreme Court, high court, ultimate courts of Appeal. They rarely because of the way judges are appointed -- certainly the Supreme
Court in Britain for example, they rarely have a political or ideological bend to them in quite the same way.
[16:35:00] What cases are we looking at do you think? What issues are we looking at in the next 10 years?
BISKUPIC: OK, I'll answer that and I'll also tell you what makes the United States Supreme Court different. First of all, these individuals are
appointed for life. You know, they come on young and they stay for a long time.
And even though they're supposed to be appointed in that kind of mutual way, it's political and they end up voting in ideological and political
ways that really matter. OK, coming down the line, issues that we're all familiar with, more challenges to abortion, more challenges to racial
affirmative action on campuses.
There's a case percolating up from Harvard on that that could come before the Justices. I do not think that some things are going to change on the
fundamental rights to same-sex marriage, but where things could be different is in terms of how people can exercise their rights as your
viewers are probably familiar, we had the case this year of the Colorado Christian baker who did not want to prepare a cake for a gay couple.
And you know, he had more cases like that.
QUEST: This is a big deal.
BISKUPIC: Oh, huge, huge deal.
QUEST: Good to see you, thank you, major analysis --
BISKUPIC: Thank you --
QUEST: As I understand, thank you.
BISKUPIC: Thank you.
QUEST: This is group that sounded the alarm on Brexit, the talks and calling for urgent progress as what they see is a potential catastrophe.
In the past few days, businesses have been ramping up the pressure. Airbus has threatened to quit the U.K. unless a trade deal can be reached or
there'll be no hard Brexit.
The British auto industries warned that 850,000 jobs are at risk if Britain leaves the Customs Union, and Europe thanking authorities, now claiming
that lenders are not prepared for the stresses of a no deal Brexit scenario. Markus Beyrer is the director general of BusinessEurope which
issued a joint appeal for progress on the Brexit.
Markus, I saw your appeal, but there really is only one problem. Everything you -- everything you talk about, every forecast, every
prognosis, every possible down solution, we know this already, the politicians know this already, but they're in a difficult political
situation and they can't get agreement.
MARKUS BEYRER, DIRECTOR GENERAL, BUSINESSEUROPE: Well, I think the reason why we spoke up all together, the European business -- the European
business community and the trade unions and together with our British friends representing 45 million workers and 20 million businesses is to
make it clear that time is running out.
We have four months until the October council, we have two slower progress and we need to fix it.
QUEST: Who is to be blamed though?
(CROSSTALK)
Who is to blame? Because the Europeans, the EU side says look, we are not going to budge on anything that calls into question the integrity of a
single market. The British position is always the same thing. You will need us as much as we all -- we, you know, it helps us both to get through
this, so let's do a deal.
But the Europeans won't budge on that fundamental point.
BEYRER: Well, the business community in Europe is very much also defending the integrity of the single market on this greatly(ph). But you're talking
about the future here. What we need -- what we need to fix in the short term now is to get a transition deal for October.
Because otherwise we'll have cliff-edge next March. And this is where we all agree, business community in Britain, in Europe and the trade unions
that we need to get this transition, a status quo-like transition with the U.K. staying the single market and the Customs unit at least onto the end
of 2020.
Because all other options, we will not have time to prepare, so this is why we are pushing for this, but in a positive signal from this week and we
need the solution in October.
QUEST: You're aware of the British political situation now, the British voted to leave the European Union. A transition arrangement for two years
or I think it's less than what is it? Eighteen months or 20 months has been agreed in the last deal.
That has been agreed, but can't go further or it would frustrate the will of the British people.
BEYRER: No, I don't see it this way. I think that's absolutely scope(ph) to get the transition, and we are very far, wants to do summit, the
transition in itself is created once in the negotiations. What is still a big problem is the so-called exit agreement and the question on Northern
Ireland where we met politicians on both sides to come to an agreement.
Because it's simply, absolutely not admittable that politics has put more importance than the will of workers and business because we need to fix it,
because otherwise, it would be problem for everybody.
QUEST: Right, but if you -- OK, I hear what you're saying that if you accept that the U.K. has voted to leave, then you're really just discussing
or negotiating how bad that's going to be.
[16:40:00] BEYRER: No, I would think everybody accepts that the U.K. has voted to leave. All we are asking for is a business community on the
continent but also in the U.K. to do this in an orderly way and to provide us with the clarity what would happen and to provide us with the time to
prepare for the exit.
And this is why we need to transition because if we have a cliff-edge next March, nobody is prepared. I mean, business tries to prepare, and I think
we do our job. But the member states are not prepared, the U.K. is not prepared and the European institutions are not prepared.
So therefore, we need to get this transition done and avoid -- in order to avoid this cliff-edge and to give time to business to prepare. And
moreover, we had a very positive scenario in March where we have been doing this political deal in the transition --
QUEST: Right --
BEYRER: We had many companies with their finger on the trigger to go for containership and procedures, and they postponed it. So we need to
recreate this positive dynamic in order to make sure we don't have a negative political and negative economic out for specifically also for the
U.K.
QUEST: Markus, very grateful that you stayed up late tonight in Brussels to talk to us tonight, thank you, I appreciate you, thank you. Now, here's
some food for thought, millennials pick on taste driving consolidation in the food sector. Frozen food is back in fashion, so they tell me about
that.
(COMMERCIAL BREAK)
QUEST: That is the (INAUDIBLE), beer is being rationed in Britain right in the middle of the World Cup, and now the reason the shortage of carbon
dioxide, CO2. Now, obviously the CO2 makes the beer, but it's particularly in larger cases, it makes the larger fluffy and it gets the beer from the
seller.
And it also makes -- so the drinks fizzing, but several plants in Europe have been closed for maintenance, and it's not only beer that's been
affected by this CO2 shortage. Join me at the -- there about, as I show you the sort of issues. So first of all, Heineken has warned that some
cans from some brands including Amstel may not be available in Britain.
One wholesaler is rationing beer and size the sales to prevent stock piling. Coca-Cola has been pausing production for a short period,
deliveries in effect at the moment. But think about the CO2 and think about what's going to happen when somebody opens this and the CO2 gets used
up.
Here, just use for other things. For example, these animals that are being sorted, they're stunned first using CO2, pigs and chicken, the result could
be shortage of meat and poultry. And when you want to keep salad fresh, it's used to extend the shelve life of various solid items.
[16:45:00] It's even used to deliver frozen food. The delivery firm Mikado(ph) is urging customers to try fresh food instead. Whichever way
you look at it, we're seeing that things are going backwards in the cause of CO2. At least, until they manage to start production again.
Earlier, I spoke to Brigid Simmonds, the head of the British Beer and Pub Association. She's putting a brave face on the lack of CO2.
(BEGIN VIDEO CLIP)
BRIGID SIMMONDS, CHIEF EXECUTIVE OFFICER, BRITISH BEER & PUB ASSOCIATION: We definitely got shortages, but I'll be honest and say booker are just
being cautious about this, because no suggestions that they are running out of beer. What they're worried about is people stock piling.
We have got a CO2 shortage, but we are still saying there's plenty of beer to buy in the supermarket, there's plenty in the pubs and please go to the
pub and watch the games particularly England tomorrow, and if your favorite drink isn't available, then that's an opportunity to try something else.
QUEST: Always good for a bit of marketing there, Brigid, but tell me, I mean, the CO2 that goes into -- the carbon dioxide that goes into -- so I
mean, well, it gives the fees(ph).
SIMMONDS: Yes, I mean, there's two parts to this. So in Lager, you need CO2 to produce beer, you don't need to do that because yes, which we drink
a lot of in the U.K. But when you go to the pub, you need the CO2 to take the beer from the seller to the pump, unless you got a hand-puller or
you're served directly from the counter.
QUEST: Right, now, how important is the World Cup to your members in terms of increased business. Because I know obviously that various relaxing of
restrictions in terms of showing the matches, in terms of licensing laws if England obviously gets further, one would expect there to be a reduction or
a loosening of the opening hours and that sort of thing.
So how important is the World Cup?
SIMMONDS: It's really important, and actually unlike Brazil four years ago where we had to ask for extended hours because the match is but later.
This time, the first three matches are at 7:00 p.m., the one in the middle was actually at 1:00 p.m. on a Sunday afternoon, so the much more fav board
the pubs, added to that, we've got some fantastic weather in England at the moment.
So all good reasons to go to the pub. We predicted that we would -- we would actually pour 14 million extra pines of beer during the group stages
of the World Cup, and we're actually hoping that we'll have about 6 million more tomorrow night.
And if England go all night indeed, they're almost guaranteed to now into the last 16, then we would hope that would be enough, about 10 million
extra pines and that's where 42 million pounds to the U.K. economy, and probably 6.4 million to the treasury.
(END VIDEO CLIP)
QUEST: Yes, I know, those are numbers and those are beer. Food is a sector that's seen a massive rise in acquisitions to -- because it's a way
to stay ahead of shifting consumer trends. Now Conagra brands which is buying the parent company of Birds Eye and Hungry-Man Food and Frozen Food.
Frozen food, it's not very sexy, Paul La Monica.
PAUL LA MONICA, CNNMONEY DIGITAL CORRESPONDENT: It is not, but it is actually, Richard, one of the few areas in the grocery business where sales
are going up and these are two companies that are leaders in that particular segment.
So I think the merger makes sense from that standpoint, but I think the bigger picture issue here is, all the food companies -- we had merger
rumors, all this, think about Kraft Heinz essentially buying Campbell Soup, everyone is frightened by the possibility that prices which are already low
for consumers will go even lower because Amazon owns Whole Foods now.
You've got Wal-Mart putting pressure on prices --
QUEST: But these are --
LA MONICA: All these companies putting pressure on prices.
QUEST: But Wal-Mart -- I'm sorry, Whole Foods and others, they are retailers, these are manufacturers and distributors.
LA MONICA: Yes, but they all sell their products through the main retail supermarket giants. They aren't going to direct consumers, so they are at
the wimps of Amazon, Whole Foods and Whole Food and Costco.
QUEST: So how does getting bigger help you? It just means you've got more products that can eventually be clobbered.
LA MONICA: More products that could be clobbered, you could look at it that way. You potentially have more pricing power if you are a larger
customer of those companies. So I think that is potentially in the back of the minds of all the food companies that are potentially looking to merge.
QUEST: I was looking at the numbers and the suggestions are that the multiple on this one, the forward-earnings multiple is actually low at 16
compared to a General Mills deal which was done recently at 19. So is that an indication these companies are struggling in that sense?
LA MONICA: Yes, I think the food companies are struggling a little bit, the pricing pressures are hurting their profits and that is the big reason
why their stocks are all --
QUEST: Right --
LA MONICA: Plunging this year even though we've had this recent bout of merger speculation that's lifted some of the stocks, but just briefly.
QUEST: Frozen foods --
LA MONICA: Nice, thank you sir.
QUEST: Malaysian authorities now think they have a good idea what their former prime minister did with some $4 billion of which they're accusing
him of embezzling. Two hundred and eighty boxes all filled to the brim with Hermes, Prada, Rolex and Chanel.
[16:50:00] We'll be in Kuala Lumpur after the break to discuss what might actually have happened to all that money.
(COMMERCIAL BREAK)
QUEST: One million dollars worth of Hermes handbags, a gold necklace that's worth $1.5 million and put it all together, and soon you're talking
real money, $225 million in goods seized in a massive way, properties linked to the former Malaysian Prime Minister Najib Razak.
It's the IMDB scandal where Razak is accused of siphoning billions of, he denies any wrongdoing. Uma is a presenter on Malaysia's business station,
joins me now, got up early in the morning in Kuala Lumpur, good to see you Uma. And so --
UMAPAGAN AMPIKAIPAKAN, MEDIA PERSONALITY: Richard --
QUEST: They're looking for these assets. They found basically lots of trinkets and goods, but that's not really the full amount of money, is it?
Where is the real money gone?
AMPIKAIPAKAN: Well, we have no idea. I mean, from the reports we're leading to the "Wall Street Journal", this looks like a scandal of global
proportion. I don't think human history has ever seen this kind of embezzlement.
And you say trinket, I mean, they found about $200 million in jewelry alone from houses, God knows what else there's out there.
QUEST: OK, so one of the reports earlier in the week basically suggested that it was Razak's wife, Najib's wife who was behind much of the
allegations that are going on.
AMPIKAIPAKAN: That's right, so their lawyers have come out and kind of refuted that report rather mildly, however, it was reported in the "Wall
Street Journal" that kind of printed this picture that it was her greed that drove the embezzlement behind 1MDB.
I mean, there are already comparisons made between Imelda Marcos and Grace Mugabe, but I think our Rosmah Mansor is on additional level altogether. I
think there was -- I think there was comparison to someone in this place.
QUEST: Is there anybody who is not -- I mean, is it now the received wisdom in (INAUDIBLE) that -- even -- I mean, obviously the election took
place, but is it a received wisdom --
AMPIKAIPAKAN: Right --
QUEST: Razak did make off with the money.
AMPIKAIPAKAN: I think that's a general belief. Even if he wasn't necessarily I guess aware of everything that was going on, there seems to
be this belief that the family was somehow involved in this massive scandal --
QUEST: Right --
AMPIKAIPAKAN: Right, I mean, so here's the interesting thing about -- yes, coming up.
QUEST: Well, will this end up in the court? I mean, he was stopped from leaving the country, is this going to end up with him facing trial. Is
that the general belief?
AMPIKAIPAKAN: It feels like it, I mean that was the promise that this new (INAUDIBLE) government came in on.
[16:55:00] They said that they were elected to power, they would look to getting to the bottom of 1MDB, and that involves essentially three or four
people at the moment.
And I think Razak's wife Rosmah Mansor financier by the name of Jolo(ph) who is not in Malaysia --
QUEST: Right --
AMPIKAIPAKAN: Whose whereabouts is generally unknown and Najib Razak's step son or Rosmah's son Riza, he's in -- these are the kind of four major
players and the idea is that, you know, just two nights ago there were reporters camped outside his house because the belief was he may have been
arrested or he was going to be arrested.
So we don't know when that's going to happen, but that's the general belief.
QUEST: Good to see you, sir, thank you for getting up in the middle of the night, 5 O'clock in the morning --
AMPIKAIPAKAN: My pleasure.
QUEST: Thank you, good to have you on the program.
AMPIKAIPAKAN: That's right, thanks.
QUEST: We will take a short break after which a profitable moment follows.
(COMMERCIAL BREAK)
QUEST: Tonight's profitable moment. It is difficult to overstate the significance of the retirement of Justice Kennedy on the U.S. Supreme
Court. And this shows Donald Trump will have an opportunity to shape the ideological nature of the court for the foreseeable future.
We're not talking about four years, five years or ten years. We're talking 20, 30, 40 years down the road. This is significant, it's a true moment in
American jurisprudential history and of course for the society. Across all issues, whether it'd be on business, social, economic, the U.S. Supreme
Court has the final word.
And for months if not years, people have been saying when will the decisions be taken over who will be the Justices for the foreseeable
future. Now, we know the answer, at least for one of them. Expect an absolute, total fist fight in this country.
And that's QUEST MEANS BUSINESS for tonight, I am Richard Quest in New York. Whatever you're up to in the hours ahead, I hope it's profitable,
I'll see you tomorrow.
END
