Return to Transcripts main page

Quest Means Business

FC Barcelona says Messi is Leaving the Club; Joe Biden to Sign EO Setting Voluntary EV Sales Targets for 2030; Victoria Enters Lockdown, Sydney Lockdown Expanded; Kellogg's Warns of Continued Supply Chain Pressure. Aired 3-4p ET

Aired August 05, 2021 - 15:00:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[15:00:24]

RICHARD QUEST, CNN BUSINESS ANCHOR, QUEST MEANS BUSINESS: There are 60 minutes between you, me, and the closing bell. So, we'll spend the next

hour together as the Dow pushes for 35,000 in this final hour of trade. It's exactly the opposite of yesterday. It went up in the morning and it's

held those gains all day. Neither one thing, not another. It's the markets and the way they are looking, if you see, against the 15,000.

The markets and the main events.

Let the bidding war begin: Leonel Messi will not return to Barcelona a week before the start of the new season.

U.S. automakers at the White House as the President makes new pledges on emissions-free cars. How much is smoke and mirrors literally?

And Melbourne is back in lockdown. Australia's former Prime Minister Kevin Rudd with us on the new COVID set back.

To get them -- well, I am live in New York on Thursday. It's the 5th of August. I'm Richard Quest and of course, here, I mean business.

Major breaking news tonight in the world of football. The Messiah is moving on. FC Barcelona says Lionel Messi is leaving the club because of financial

and structural obstacles. Remember that phrase, "financial and structural obstacles." We're going to refer to it again and again.

What it means is, one of the greatest and highest paid players ever to take to the pitch is now a free agent only a week before the start of the

European football season. Messi has won 10 La Liga titles, four Champions Leagues with Barca since 2004.

The club says it reached agreement with him, but Spanish Liga regulations got in the way.

Don Riddell is with me. This is a run business. So, he was out of contract since earlier in the summer. They have been negotiating. By all accounts,

both sides wanted to do the deal. We can argue about that. But it would seem to be that way, but these fair play rules got in the way.

Don Riddell, explain.

DON RIDDELL, CNN WORLD SPORT: Well, I'll try and explain it, Richard. I mean, remember, this all goes back actually to last summer when it did seem

as though Messi was going to be leaving, he agreed, somewhat reluctantly to play one more season with the club. He said he didn't want to have to go to

court to force his way out of the club that he has loved for all of his life. So, he played one more season, as you say, out of contract at the

start of July in negotiations.

It had seemed as though he was prepared to sign on again, until 2026, so, for another five years. It had seemed as though he was prepared to take a

pay cut, reportedly half of his wages. But the final piece of the puzzle that needed to be figured out was that Barcelona needed to further cut

their payroll by reported $240 million. And this statement has broken, literally within the last hour,

I suspect, confirms that they've not been able to do that.

QUEST: Right. But Don, as I understand it, and I've just been, you know, talking about my knowledge of La Liga's fair play rules is an inch thick

and a mile wide. As I understand it, it's all to do with what your income and your earnings have been, et cetera, et cetera. And that is going to --

I mean, even though it is -- it was the first billion dollar earnings club. This is based on last year, where earnings and ticket revenues and the like

were sharply depressed.

So, are we sort of playing here -- pardon the pun -- with a sort of an unfair game in some sense, to some extent?

RIDDELL: You know that may be the case. I mean, clearly the whole world has just been completely tipped on its head within the last 12 to 18 months.

There is no doubt about that.

But the fact is, Barcelona as a business, you know, people that pay close attention to these things will tell you that it's not a particularly well-

run business at the moment; and on the pitch, the club has not been performing well for quite some time, and we've just rattled off all of

Messi's achievements -- four Champions League titles, 10 La Liga titles, that is all in the rearview mirror.

They're just not that competitive on the field anymore, both in Spain and on the continent. They wonder, the Spanish Cup last season, which was kind

of a token trophy for them that their expectations would be much higher than that. And of course, they're going to struggle with the revenue as a

result.

QUEST: So, who and how much? Who will buy and how much will he go for? I won't hold you to the second or the first.

[15:05:06]

RIDDELL: Well, we were talking about this again last summer when it seemed as though he was going to be leaving, and even then, there were only really

two clubs in the conversation, two clubs with the kind of money that could afford Lionel Messi. They were Manchester City and Paris St. Germain.

So, if he is leaving, if indeed he really is leaving and they don't somehow pull a rabbit out of the hat, and he does stay on for another five years. I

think those clubs would be in the conversation again. It remains to be seen what his salary would be if he was prepared -- if he really was prepared to

take a 50 percent pay cut of Barcelona, perhaps more clubs could afford him.

But you look at a team like Manchester City, where it would seem to be an obvious fit, his former coach, Pep Guardiola now is in charge at Manchester

City, but they are very interested in Jack Grealish. It looks like they're about to land him any day now for a massive fee. They're talking about

Harry Kane from Spurs. It might just be that even Man City with the business they're doing this summer, it has come too late for them or they

now can't afford Lionel Messi.

So I mean, the timing of this is absolutely fascinating because if he was going to go to a club like Manchester City, it would have been better for

all concerned if this news had broken six weeks ago.

QUEST: Don, we will follow on. Thank you, sir. I always appreciate it.

Now, with so much success on the pitch and generational talents emerging from the E.U., Academy Barcelona should have been positioned for years of

massive profits and more football championships.

Simon Kuper from "The Financial Times" details a stunning series of management failures that led to this. Before the pandemic, Barcelona became

the first club in any sport ever to surpass one billion in annual revenues. Now, its debt is about as much and a half again, one and a half billion,

and it is short term.

Simon is with me now. When you heard -- I saw your new book about the club, "The Barcelona Complex" that is out later this month. So, you're the man,

you're absolutely the right man in the right place to discuss the right story. Are you surprised that Messi has come to this?

SIMON KUPER, AUTHOR, "THE BARCELONA COMPLEX": I am surprised. I think last year when he wanted to leave and he wasn't allowed to, they wouldn't let

him out of his contract, he wanted in the end to stay for family reasons as well.

When he told his wife and sons last summer that he was planning to leave the club, everyone burst into tears. He said it was a drama. I think he'd

resigned himself to spending the rest of his career with Barcelona, and that was his plan. And so he had agreed to halve his pay to get a new

contract. Even that was impossible because their spending has just been out of control for years.

So, I think he's been forced into this, if you like.

QUEST: So, is this a real financial crisis of Barcelona that has led to it? Or is this a sort of an accident of the numbers, last year's earnings

weren't that good because of COVID, therefore the amount they can spend on players is diminished by half. Therefore, they can't go ahead.

Is it an accident? Or is this by sheer incompetence?

KUPER: I would say it's more than competence. I mean, look COVID hit every football club because the stadiums were closed. It was worse for Barcelona,

because a lot of games, a third of the seats in the stadium are occupied by tourists who also buy in the megastore, the museum, it is such a tourist

city. But if they had been incompetent, I mean, in the book, I detail how over about five years, they spent more than a billion dollars on transfers,

buying players more than any other club in soccer and they have ended up with this aging, rather weak team if you -- except Messi -- if you leave

him out of that.

So they just systematically bought the wrong players, they stopped producing good players. In the end, they were spending more of their entire

revenue on wages and their wages got out of control. So, the club is to blame for the situation that they've got themselves in.

QUEST: Do you think -- to allude to what you'll have heard Don Riddell say, that a rabbit can be pulled out of the hat?

KUPER: It's possible. I mean, there's all sorts of things swirling around. CVC Capital wants to put about $3 billion into La Liga in exchange for a

sort of 40-year mortgage. And you know, Barcelona have said no to that, but Barcelona is desperate. It is possible. I would not be amazed if a month

from now he is still at Barcelona.

But right now, it looks like the exit and then the most likely candidate I would say is Paris St. Germain.

QUEST: And for how much?

KUPER: Well, I mean, the thing is, he is a free agent. You know, the beauty of it for any buying club is you don't have to pay a transfer fee at all.

It's zero euros. You only have to pay his massive salary, which even halved is still the highest salary of any soccer player in the world, it is

probably about 50 million euros. So, it's just a salary proposition now.

QUEST: Does this turn the season on its head? Or is this just an interesting curiosity?

KUPER: It's not a curiosity. I mean, you know I've spent years inside this club. This is amazing. This is the biggest sports transfer I would say in

any sport of, you know, the 21st Century.

[15:10:11]

KUPER: Here is the best player in football. He'd been 17 years at the club, with the happiest marriage in a way between club and player in the history

of soccer. He had wanted to stay, the club wanted to keep him, and now suddenly, it seems that he is leaving. I mean, this is big. This is really

shocking.

QUEST: Right. Sorry, my question was really in terms of the whole idea. No, I can see that for Barcelona. What I meant for the whole, if you like, for

the whole -- for the La Liga, the European soccer football. Is this -- is the fact he is leaving Barcelona, going to upend, because of the ripple

effects that will happen elsewhere.

KUPER: I mean, La Liga had already been on the slide relative to the Premier League. The Premier League clubs in the last three or four seasons

have become more successful than Spanish club.

Real Madrid and Barcelona for about a decade had the two best players in the world, Cristiano and Leo Messi. Cristiano left Spain about three years

ago, and it looks like Messi is following him now.

And then, you know, Spain is a football league with huge financial problems. It's a medium-sized European country. I would guess that Spain's

period of dominance is over now even if Messi stays. Remember, he's also 34. He was coming to the end anyway.

QUEST: Thirty four. Thank you, sir. It has aged the rest of us on the process. Good to see you, Simon. It is nice to have you with us. Thank you.

The World Health Organization is now urging wealthy countries not to give COVID booster shots right now. The countries in question are pushing ahead

anyway.

Also, we'll be live in Washington where any moment now, you can see they are all gathering at the White House, the President signed an Executive

Order calling for the biggest transformation of the auto industry in decades, in a moment.

(COMMERCIAL BREAK)

QUEST: President Biden wants America to go electric. In Washington, at the moment, he is signing an Executive Order calling for the biggest

transformation of the U.S. auto industry in decades. Well, he will be when -- well, he is probably signing it now. And now, he is going to give a

speech, but there you see, everybody at the -- as you can see there, the U.S. Transportation Secretary, Pete Buttigieg also there.

He wants 50 percent of cars sold in the U.S. to be electric or hybrid by 2030. The President is going to be joined by leaders from Ford, GM-

Chrysler, and the maker, Stellantis, as well as the United Auto Workers Union.

[15:15:16]

QUEST: They say, they are on board if the U.S. spends the money on infrastructure that the administration has committed to.

Notably, not there is America's largest electric car manufacturer, Tesla. Now, the founder, Elon Musk tweeted overnight that it seemed odd he wasn't

invited.

CNN White House correspondent John Harwood is with me. John, let's not worry about the policy, let's go for the tittle tattle. Musk says he wasn't

invited, it seems a bit odd.

JOHN HARWOOD, CNN WHITE HOUSE CORRESPONDENT: It is a bit odd. But this is a non-union company, Tesla, and what the President wants to do with this

particular event is demonstrate by the presence of those three -- big three auto manufacturers and the UAW representatives, that this is a move that is

good for business's bottom line in the long run and for workers at the same time.

He has been making the case for some time that the climate agenda for him is a jobs agenda. He is trying to dramatize that with this Executive Order,

obviously not binding, but it is something that he hopes to boost with higher emission standards, rolling back some of the changes that Donald

Trump made through direct spending. The Federal fleet having the Federal government buy electric vehicles include money for development of fuel cell

and battery technology in his infrastructure plan, as well as some manufacturing improvements that would speed the development of electric

cars.

QUEST: John, I always get a bit nervous when I see Executive Orders being the vehicle -- pardon the pun being used here -- because they are a good

way of making a lot of noise that often doesn't get the exact result. It just looks good.

Is this a case of that here, do you think?

HARWOOD: Well, certainly, it's a hortatory goal for the country. There is no enforcement mechanism. He can't force American consumers to buy electric

cars, and he is already getting pushback.

Yesterday, John Cornyn, the Republican Senator from Texas, was complaining about what President Biden was doing on electric cars saying they are more

expensive than ordinary gas-powered cars, and he wants to force people to buy more expensive cars to suit his environmental agenda.

There is always a challenge to move from one kind of market to another kind of market. So, the President is saying, here's a big goal, and then he is

taking some specific regulatory and spending and Federal investment steps to try to make it happen.

But it's a huge challenge as you suggest. Fewer than five percent of the vehicles sold in the United States right now are electric cars.

QUEST: Right.

HARWOOD: Taking that up 10 times to 50 percent is very difficult to do in nine years.

QUEST: Right. Now, stay with me because I just want to go through exactly that point that you have raised. The U.S. goal of 2030 is -- well, half a

dozen European countries are set to stop registering gas-powered vehicles within the decade. Norway is the most ambitious, it will only allow battery

and fuel cell EVs to be registered starting in 2025. The UK wants to phase them out by 2035. Pakistan is aiming for 90 percent of its electric -- of

its cars to be electric by 2040.

But John, the difference I think this time is, in the past, to use the old collective noun, Detroit, didn't want electric. Detroit didn't want gas

powered. Detroit -- what Detroit didn't want, it managed to scupper through lobbying and politics.

Detroit is on board with this.

HARWOOD: Well, look, our economy has become integrated with the entire world, and these auto companies are going to be selling to the entire

world. And it is clear, this is where the world is going to combat climate change. There's no getting around it.

Question about how fast they get there? But that's the direction of the future. And these guys, these auto executives have their eyes on the bottom

line in the future. They are trying to catch up to what Europe is doing, what China is doing as well.

QUEST: Yes.

HARWOOD: All of those countries have more advanced electric vehicle segments than we do right now, and so, that's why they are getting on board

and why workers are getting on board.

QUEST: John Harwood in Washington, thank you so much. We appreciate it.

Four of the world's most vaccinated countries are ignoring the World Health Organization's call for a booster shot moratorium. France, Germany, and the

UK are all going ahead with plans to offer a COVID booster shot from next month. Israel is already providing them to people over 60.

The W.H.O. says they should all wait until every country has vaccinated at least a 10th of its population. Germany says it will donate at least 30

million vaccine doses to poorer countries while offering its most vulnerable people a third shot.

[15:20:03]

QUEST: Moderna now says its COVID vaccine is 93 percent effective six months after administering the second dose. It's almost unchanged from the

initial trial results showing 94 percent of efficacy.

The company still expects booster shots needed this year as antibodies wane, new variants spread, and there will be production by return of a

billion doses a year. The company says it lacks the capacity to take new orders.

Jacqueline Howard is on the story. Look, this is interesting because the W.H.O. has spoken, and essentially, the big countries -- U.K., Germany,

France, I venture to imagine the U.S. Well, Jen Psaki yesterday, they are essentially sticking two fingers up at them and saying we're going to do it

anyway.

JACQUELINE HOWARD, CNN HEALTH REPORTER: Well, we haven't heard any changes from them yet, but there is still time for them to make changes in response

to what the World Health Organization has said. And to note, the World Health Organization is, you know, asking maybe at least until the end of

September, to put a hold on the third doses.

And here in the United States, health officials have not made any recommendations for a booster dose or third dose yet. So, here in the

United States, there have not been this rollout of third doses, just some of the nations that you mentioned, Richard, like Germany and the U.K.

It will be interesting to see how nations respond. The World Health Organization just came out with this announcement. So, we can expect

possibly to hear from other nations or we can expect rollouts to continue. It will be interesting to see what happens in the coming days -- Richard.

QUEST: The problem with the World Health Organization is people follow it when they like what they say, and then ignore it when they don't, and that

seems to be a classic of its kind. People are happy to quote the W.H.O. when it's supporting their arguments, and then excoriate it when it

doesn't.

HOWARD: Well, you know, the World Health Organization does make its recommendations. But just to clarify for people, the World Health

Organization has no authority, you know, so to speak to force a nation to make one move or the other.

So, you know, nations do listen and either can follow those recommendations made by W.H.O. or not so. So, that's why I said, it'll be really

interesting to see what happens in the coming days.

And the World Health Organization, you know, is making this call for a hold on third doses, really, until vaccinations increase in nations that do not

yet have access to the vaccine. So, they are really making this call from that viewpoint.

QUEST: Thank you. Good to see you.

As vaccinations pick up in Europe, so the U.K. has added more countries to its green list for travel. On Sunday starting, people arriving from

Germany, Austria, Norway, amongst others won't need to quarantine unless they test positive for COVID. The latest update makes travel easier for

people arriving from France.

CNN's Phil Black reports.

PHIL BLACK, CNN INTERNATIONAL CORRESPONDENT: The most notable change perhaps applies to France, which for some weeks now has sat in a category

all by itself, so-called amber plus. The practical difference is that for people traveling in from regular amber list countries, if they are fully

vaccinated, they don't need to quarantine at home.

That hasn't been the case for people traveling from France. They have still had to submit to quarantine, but that will no longer be the case as France

joins the regular amber list of countries.

Other countries are also going amber for example, India, Bahrain, the UAE, and Qatar. These are countries that are moving from the red list, red being

the toughest and strictest designation, the countries that are thought to represent the highest coronavirus threat.

Fly in from a red list country and you have to quarantine in a government designated hotel at your own personal expense. Some countries are now

joining that red list, notably Mexico, a popular tourist destination, and there are already reports here of British travelers in Mexico, they were

enjoying holidays and are now desperately scrambling to get back ahead of these new rules kicking in, in the early hours of Sunday morning.

The good news is, the green list is also getting longer with countries including Germany, Austria, Norway, Slovenia, and Slovakia joining that

list which means you can travel there freely to and from without any sort of quarantine required regardless of your vaccination status.

All of this has been front page headline news here because Brits are desperate to go on holidays and the local travel industry is somewhat

desperate to reopen and get moving. And so for that reason on this issue, the government has faced real criticism in recent weeks for operating a

system that has been called too complicated and too cautious.

The government believes that caution is justified and reasonable because it says, the pandemic is still going on and the gains that have been made here

need to be protected.

Phil black, CNN, London.

[15:25:07]

QUEST: Australia's three largest cities are now in lockdown. The delta variant spreading and people are dangerously under vaccinated. The

country's former Prime Minister, Kevin Rudd, who is said to have helped get more Pfizer vaccine to Australia. Well, we'll talk to him after the break.

It's QUEST MEANS BUSINESS. Good evening to you.

(COMMERCIAL BREAK)

QUEST: I'm Richard Quest. We have a lot more QUEST MEANS BUSINESS together. I'll be joined by the former Prime Minister of Australia, Kevin Rudd, to

ask how the country's early success in containing COVID-19 unravels so spectacularly.

After a year of isolation, love is blossoming again. The dating apps and engagement services are enjoying a Summer of Love.

As we continue, this is CNN and here, the facts, the news always comes first.

Iran's new ultra-conservative President has been officially sworn. Ebrahim Raisi says he backs any diplomatic effort to lift crippling U.S. sanctions.

U.S. says Iran must return to the talks about the 2015 Nuclear Deal calling it an urgent priority.

Dozens of wildfires fueled by record breaking heat and strong winds continue to burn in Greece, and the places on the outskirts of Athens has

rekindled and that has forced the evacuation of five neighborhoods.

Greece is facing one of its worst heatwaves in decades.

The President of the most powerful labor union in the United States, Richard Trumka has died. The longtime AFL CIO leader was 72, a vocal

supporter of President Joe Biden and Democrats in general. He was also known for his opposition to NAFTA and believe the trade agreement was

harmful for working families.

(COMMERCIAL BREAK)

[15:30:00]

(MUSIC PLAYING)

QUEST: A grim milestone to tell you, around the world more than 200 million COVID cases have now been recorded. And the Delta variant is driving a

global surge in infections.

Countries that had succeeded in containing earlier strains are now seeing their progress shattered by this highly contagious new strain. For

instance, 13 million people in Australia's three largest cities are now under lockdown, as the country's zero COVID strategy crumbles against

Delta.

The state of Victoria began a week-long lockdown a few hours ago. Sydney's lockdown, on for six weeks, has been expanded to more surrounding areas.

The hospitals are strained and the shops are shuttered. CNN's Paula Hancocks reports now -- and this is something many Australians thought

would never happen to them.

(BEGIN VIDEOTAPE)

PAULA HANCOCKS, CNN CORRESPONDENT (voice-over): A nurse talks a patient through his COVID-19 vaccine with the help of a translator.

At a makeshift clinic in the immigrant-rich Sydney suburb of Bankstown, this was a sports club six weeks ago when COVID-19 was almost forgotten in

Sydney, when months would go by without a single locally contracted case.

But now the Delta variant is spreading quickly, an unequal disease, hurting working class neighborhoods like Bankstown.

UNIDENTIFIED MALE: This is a hot spot in terms of the COVID disease. And it is because it's a diverse community, we needed to do our bit to encourage

people to come and get vaccinated because really that is the only way out for us.

HANCOCKS (voice-over): Here, many work paycheck to paycheck. It's a younger population, home to the essential workers keeping the city alive through

lockdown.

But despite cases rising fast in this part of Sydney, the government's messages are hard to accept. Soldiers patrol the streets, a confronting

sight for many.

UNIDENTIFIED FEMALE: A high percentage of people don't believe in the coronavirus. And the lower percentage obviously, you know, they prefer for

the lockdown to occur.

HANCOCKS (voice-over): Sydney never expected to suffer a second COVID wave. The federal government had a huge head start when it began its vaccine

rollout in February. They said "few cases," meaning time was on their side. But six months later...

SCOTT MORRISON, AUSTRALIAN PRIME MINISTER: I'm certainly sorry that we haven't been able to achieve the marks that we had hoped for at the

beginning of this year.

HANCOCKS (voice-over): The vaccination rate lags at just 20 percent of those 16 and older.

UNIDENTIFIED MALE: Yes, there's been some issues along the way. There's no doubt we're in a bit of a pickle now in terms of the lockdown. But if we

all encourage our fellow friends, our fellow citizens, our fellow community to come and get vaccinated, well, then I think we'll get back to some

normality, hopefully pretty soon.

HANCOCKS (voice-over): Business owners, like bookseller Jane Turner (ph), have been told they must survive lockdowns until the national vaccination

rate is quadrupled.

JANE TURNER (PH), BOOKSELLER: It feels endless and that's hard. That's hard to swallow.

HANCOCKS (voice-over): The Gertrude and Alice Cafe (ph)is an institution in beachside Bondi.

UNIDENTIFIED FEMALE: So I feel very buoyed by the -- our customer base after 20 years and people that have a relationship with this store and with

us, who want us to be here at the end of it.

Do other stores have that?

I don't know.

HANCOCKS (voice-over): Few in Sydney can predict the end to an outbreak the city never expected -- Paula Hancocks, CNN, Seoul.

(END VIDEOTAPE)

QUEST: Thursday was the deadliest day of Sydney's latest outbreak, the Delta variant spreading to a dangerously undervaccinated population. The

problem started a year ago.

Australia chose to rely mainly on AstraZeneca. In April, the government blamed supply shortages on the company's dispute with the E.U. And domestic

manufacturing and research suffered its own setbacks.

Then AstraZeneca was shown to have those rare side effects, blood clotting. The government was left scrambling to order more Pfizer and Moderna, not

expected to arrive until the end of the year.

If all that wasn't bad enough, now the government's had to go back to the people and say, no, AstraZeneca is fine for you all. Take it all.

Kevin Rudd was Australia's prime minister and now the president of the Asia Society Policy Institute. He joins me from the Sunshine Coast.

Mr. Rudd, thank you.

How much of this latest -- if Australia was going to have a no-COVID policy, it would only work if the vaccines were put in place so that the

inevitable didn't happen. And it has happened.

KEVIN RUDD, FORMER AUSTRALIAN PRIME MINISTER: I think there've been two major problems with public policy in this country, Richard.

[15:35:00]

RUDD: One was a failure of our national quarantine arrangements on the basis of a zero COVID approach, a lack of dedicated facilities to deal with

foreigners traveling to Australia or Australians traveling home.

It just meant that Delta, as in other parts of the world, has leaked out. But the second primary failure of public policy has been, as you just

suggested, that is, ordering a sufficient spread of vaccines and sufficient number of vaccines and early enough to make a material difference.

Unfortunately, on the vaccine policy, it's come late. And, as you just indicated in your report, vaccine hesitancy has been turbocharged about

particular reports of AstraZeneca's effect on clotting.

Malcolm Turnbull, another former prime minister, has made it clear that he blames the government. He says the prime minister absolutely got it wrong.

Now, sir, I know from a different political party but having been in office in that, with all those pressures -- and you know the difficulties of

making those decisions -- do you blame the prime minister for getting it wrong?

RUDD: Well, Mr. Turnbull, the former prime minister, is from the same political party as Mr. Morrison. They're from the Conservative side of

politics. I'm from the Labor side of politics in this country. So I'll allow Mr. Turnbull to speak for himself.

But ultimately, in our democracies, Richard, the buck stops with the guy or the woman at the top. And on the question of both quarantine and on

vaccines, these are both, you know, in Australia, uniquely federal responsibilities.

Also at the time, second half of last year, there were very many warnings to the government about the diversification of vaccine supply. Bottom line

is, in 2020, Australia navigated the COVID crisis like New Zealand and a number of other countries very effectively.

But having through its own virus suppression measures, got it down to virtually zero, the failure of public policy has been, as I said,

quarantine and arrangements.

QUEST: Essentially Australia is going to be closed to the rest of the world until next year.

Does that sound fair?

RUDD: Well, the prime minister, Mr. Morrison, has indicated that the return to normal in Australia -- or, as he says, a return to freedom -- will come

when we have a national vaccination rate of somewhere between 70 percent and 80 percent.

Of course, this is based on the assumptions that what we are continuing to deal with by year's end is Delta. If our current vaccination rate continues

as it is today, through to the end of the year, then it's conceivable by that stage we begin to have a return to normality.

But I think it's fair to say, between August and December, it's going to be a pretty rough road.

QUEST: Your current role is with Asia Pacific. I saw the latest numbers-- Malaysia, terribly high numbers; Thailand, Indonesia, the whole of

Southeast Asia, limited vaccine supply, doesn't, to some extent, enjoy the ability of Australia as an island to sort of put up the barriers.

How worried are you that these developing countries, which showed great promise, are being put back decades?

RUDD: I'm deeply concerned about that. I've spent a lot of my career with our friends in Indonesia and elsewhere in Southeast Asia and South Asia, as

well. You see, as the managing director of the IMF has been warning for some time, we have a responsibility in terms of getting vaccines out across

the developing world.

That hasn't happened. It's been a failure of global leadership there. And the vaccination rates in the developing world are pitiful relative to those

in the advanced economies, leaving aside the particular problem of Australia.

If that doesn't worry you as a human being, one of the biggest headwinds against global economic recovery is what is happening in emerging markets,

which is directly, as the IMF says, attributable to low vaccination rates, as well.

QUEST: Mr. Rudd, thank you for joining us and particularly thank you for getting up. It's 5:38 where you are. So I do appreciate you getting up in

the middle of the night and I guess you could have a nice, early breakfast and enjoy the beauty of the Sunshine Coast.

Thank you, sir.

RUDD: We're still energetic in the activities.

(LAUGHTER)

QUEST: You're already on Friday. At least your weekend is closer and you can go down to the beach now and enjoy the sunrise. I'm grateful.

Now China says its latest COVID outbreak can be contained in a matter of weeks, as long as local officials take the necessary steps. And those

include Beijing approving its Sinovac vaccine for children as young as 3.

[15:40:00]

QUEST: Our correspondent David Culver on China's zero COVID strategy.

DAVID CULVER, CNN INTERNATIONAL CORRESPONDENT: Richard, the case count is climbing here in China, as health officials are battling their worst

outbreak since Wuhan. They might look at the number infected, in the hundreds since July 20 and, compared with other parts of the world, it may

not seem so serious.

But given China has had a zero tolerance approach to cases and has mostly maintained that in the past year through extreme containment measures, this

latest Delta linked outbreak is worrisome.

Strict measures are making a comeback. Millions are now part of citywide testing efforts and affected communities with tens of thousands of people

are in lockdown. Some folks are sealed inside their homes.

(BEGIN VIDEO CLIP)

CULVER (voice-over): Take a look at this video right here. It's on Chinese social media and it shows one extreme case. Folks living in a locked down

building in central China, shouting for help from their windows, asking for supplies and COVID tests.

An official from the area later denied that the residents were left alone, adding that volunteers have been working to provide them supplies and

tests. For the most part, communities in lockdown, including in Beijing, have adapted rather efficiently in providing residents with necessities.

(END VIDEO CLIP)

CULVER: What we are not likely to see is a return of the major scale citywide lockdown that Wuhan experienced last year, in which the entire

population of more than 11 million was sealed off for 76 days.

Those measures, even if effective in stopping the spread, proved crushing economically, not to mention mental health impact. Here in Beijing, the

city that will host the Winter Olympics in less than six months, there are likewise confirmed cases and communities locked down.

Officials have also announced anyone who's traveled in from high or medium risk areas will be subject to mandatory centralized or home quarantine.

China's current number of elevated risk areas is at the highest level since April of 2020. That was shortly after the Wuhan outbreak. Richard.

QUEST: David Culver in China.

U.S. markets are up on Thursday. The Dow sits 200 points, 222 points. A strong session as new warnings of cost inflation and supply chain problems

caused by the pandemic. The CEO of Kellogg's is with me after the break. Thank you.

(MUSIC PLAYING)

(COMMERCIAL BREAK)

(MUSIC PLAYING)

QUEST: New U.S. jobless claims came right bang on expectations, 385,000 this week compared to 399,000 the week before.

[15:45:00]

QUEST: The monthly jobs report for Friday comes out tomorrow. That's Friday.

The Nasdaq up more than 200 points and has been up strongly throughout the course of the day. The Nasdaq is heading towards a record close. I'll let

you know when we get there, if it does.

And the SNP is close. The markets may not be worried about the pandemic, its impact on its severe day-to-day trading. Kellogg's may have reported

sales growth before the bell. It still warned of supply chain and cost inflation headwinds. The shares are up 0.75 percent.

Steve Cahillane is the chairman and CEO of Kellogg's. He joins me.

Steve, good to see you, sir. To focus first of all on the issue du jour, which is, I think this question of inflation, because supply chain

inflation implies that companies like yours are also having difficulty getting the raw materials necessary to make the packaged goods to supply to

grocery stores.

STEVE CAHILLANE, CHAIRMAN AND CEO, KELLOGG'S: Yes, Richard. That's right. It's good to be with you.

I think a couple of things are going on behind the inflation. One is just regular commodity inflation. Commodities are spiking. We're seeing them at

quite high rates. But what you point out is the dislocation that happens in the supply chain and the ability to get labor and to get product moved from

point A to point B and to get things as simple as pallets and containers.

There's been a bit of dislocation between the supply and demand that has increased the cost level on top of the commodities, which leads to an

environment where costs are really at highs we haven't seen in really 10 years or so.

QUEST: I'm looking at your numbers in terms of distribution of the company. You're not quite 50-50 for U.S. overseas. But in fact, you're a bit off

that. But the U.S. is still the largest part of the company.

In that environment, are you concerned that the Delta variant here, which has taken hold, which is already affecting your non-U.S. operations?

CAHILLANE: Yes, so, we've been battling the pandemic like everybody from the very beginning and it's true that, several weeks back, it looked like

there was a light at the end of the tunnel in the United States. And the COVID variant has clearly changed that.

But we have to stick to our same priorities and keep our people safe and provide food to the marketplace and keep our safety protocols in place. So

from a supply standpoint we've been able to make our way through it.

From a demand standpoint, you know, more working from home and less mobility, you know, really, we're built for that. So you know, we'll

continue to battle through the pandemic, keeping our people safe and supplying food in as safe a way as possible.

QUEST: Where do you stand on vaccine mandates now?

We're getting to the point, as the mayor of New York says, if you want to take full role and play a role in society, you have to be vaccinated. It's

time.

Would you mandate?

CAHILLANE: So right now we are strongly encouraging our associates to get the vaccination. You know, we're doing that through education; we're doing

that through bringing in outside experts to talk about the science, to talk about the real facts, to remove as many hindrances as possible.

Strongly encouraging is where we are right now. We're not doing any mandates. And we're seeing very good uptake in terms of people inside

Kellogg taking the vaccination.

QUEST: And working from home, now, I understand if you're in the factory and in the production facility, you can't exactly work from home. But

obviously, you have a lot of people who are not in those positions.

Are companies going to live up to the promises that they made, that you recognize that there has been a shift in the workforce and expectations of

work-life balance?

CAHILLANE: Yes. So, Richard, I can only speak for us here at Kellogg. But what we've been talking about at the right time is a new program called

Locate for Your Day. And ultimately, I see a place inside Kellogg, where at least half the work is still done in the office, if not more.

But that means, you know, half or so time can be spent working remotely. I think it's important to focus on, when we say Locate for Your Day, what do

you need to accomplish that day?

If it's about collaboration and innovation and if it's about team building, then clearly those things are best done in person. If it's catching up on a

lot of paperwork and emails and things best done between you and a screen, then, sure, working from home and having all that flexibility is something

that we will, in fact, give to our associates.

QUEST: I think that's one of the most sensible expositions of the policy of working from home and hybrid working that I've heard, sir.

[15:50:00]

QUEST: Steve, thank you. I appreciate you giving me your time. Thank you, sir.

CAHILLANE: Great, thank you, Richard.

QUEST: Coming up next, there might be a vaccine for COVID but there is no cure for love. The business of romance is proving, once again. QUEST MEANS

BUSINESS.

(MUSIC PLAYING)

(COMMERCIAL BREAK)

(MUSIC PLAYING)

QUEST: If you're against romance and you don't like soppiness, I suggest you look away. Despite concerns about variants, there's evidence people are

beginning to feel more and more confident about reengaging in society as they get vaccinated. It's having a welcome side effect for an industry, the

love industry. Clare Sebastian is in love.

(BEGIN VIDEOTAPE)

(MUSIC PLAYING)

CLARE SEBASTIAN, CNN CORRESPONDENT (voice-over): For Shane Williams, months of COVID restrictions had been leading to this moment. And it didn't

disappoint.

SHANE WILLIAMS, LAWYER AND NEW FIANCE: I originally had it planned for actually December of 2020 in Quebec.

SEBASTIAN (voice-over): When the pandemic prevented them from traveling, the lawyer from New Jersey used that setback to save up. He hired a

proposal planning company and even added a few more diamonds to the ring.

WILLIAMS: COVID, that was such a rough year. It was just -- we were locked in the apartment the whole time and I really wanted to spend some time and

make it special. So I decided to wait until we could come to New York.

SEBASTIAN: Did he exceed your expectations?

UNIDENTIFIED FEMALE: He did.

SEBASTIAN (voice-over): For professional proposal planner Tatiana Caicedo (ph) it's been a busy summer and an emotional one.

TATIANA CAICEDO, PROFESSIONAL PROPOSAL PLANNER: Very often clients saying that his partner went through a lot this year and they want to do something

nice for them. So that's...

SEBASTIAN: Nice of you (INAUDIBLE).

(LAUGHTER)

SEBASTIAN (voice-over): After months of fear and isolation, love, it seems, is back. Jewelers report engagement ring sales are soaring. And Google says

such interest in dating hit a five-year high in July. Here in New York, around two-thirds of adults are now fully vaccinated.

So despite concerns about new variants, sunset brings daters flocking to Manhattan's waterfront.

Many who we spoke to, couples who got together during the pandemic.

UNIDENTIFIED FEMALE: It feels like we're just starting to date because we're just now getting to get out and get to know each other in other

settings.

UNIDENTIFIED MALE: Yes, we still have not seen our first movie together.

UNIDENTIFIED FEMALE: We met on Hinge, in the middle of or beginning of May last year, so right in the middle of it all.

UNIDENTIFIED MALE: She swiped left, I swiped right.

[15:55:00]

UNIDENTIFIED MALE: We've been locked up for so many -- or so many months now, I said, now we can actually enjoy love.

SEBASTIAN (voice-over): For the dating apps that made this possible, the summer brings new marketing opportunities. Dating app BLACK: , which caters

to the Black community --

(MUSIC PLAYING)

SEBASTIAN (voice-over): -- producing this remake of previous hit from rapper Juvenile.

(MUSIC PLAYING)

UNIDENTIFIED MALE: I will say since the release of that thing up we've definitely seen a spike in registrations, like 30 percent more

registrations than like four-week prior trend.

SEBASTIAN (voice-over): Like many dating apps, BLK now lets you filter for vaccination status with its vaccified badge.

UNIDENTIFIED MALE: To date we've had over 180,000 BLK users add the badge to their profile. They kind of -- well, what happened to our users, they

want to know if their match is vaccinated or not.

SEBASTIAN (voice-over): So while it's clear COVID changed the way people date, it also helped many realize what really matters is the people you

love -- Clare Sebastian, CNN, New York.

(END VIDEOTAPE)

QUEST: Oh. What can one say?

Well, since I got married during COVID, not much. Thank you. "Profitable Moment" after the break.

(MUSIC PLAYING)

(COMMERCIAL BREAK)

(MUSIC PLAYING)

QUEST: Tonight's profitable moment: how to snatch defeat from the jaws of victory. That's the story of Australia.

Having put up the barriers to create this fortress island until vaccines came along and everybody would be safe, the country then managed to

successfully drop the ball at every opportunity.

A locally produced vaccine never materialized. They bought AstraZeneca and then probably changed the rules about who could get it. And then changed

the rules, again, about who could get AstraZeneca while at the same time trying to buy Pfizer and muddling the message so that vaccination hesitancy

went through the roof.

And now Delta has arrived, as it was inevitably going to do because you couldn't have a fortress that was completely impregnable. It was inevitable

and now Australia likely to be in lockdown for many more weeks and certainly not open to the rest of the world until well into 2021, later

this year and maybe even into next.

Message for us all there really. I'm just not sure what it is. I do know that is QUEST MEANS BUSINESS for tonight. I'm Richard Quest in New York.

Whatever you're up to in the hours ahead, I hope it is profitable. There's the closing bell. Good day on the Dow.

END