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Quest Means Business
EU Outlines Plan To Soothe Rattled Energy Markets; EU Countries Work To Fill Gas Storage For Winter; Truss Grilled In Parliament Over Cost-Of- Living Crisis; Pakistani Prime Minister Says Parts Of Country Look "Like A Sea"; Apple Unveils iPhone 14 At Keynote Event; Unilever Prestige Recorded Strong Growth First Half Of Year; Arab Countries Warn Netflix Over Violating "Islamic Values"; Kim Kardashian As Wall Street Investor. Aired 3-4p ET
Aired September 07, 2022 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:00:29]
ZAIN ASHER, CNN INTERNATIONAL HOST: A positive session on Wall Street. Let's take a look and see how the Dow is faring right now. Up about 465
points or so. Today's gains come off the back of a bruising couple of weeks of stocks.
Those are the markets and these are the main events: The EU President proposes capping Russian gas prices ahead of an Emergency Energy Summit on
Friday.
Apple unveiled the iPhone 14 and it is even bigger than its predecessor.
And Kim Kardashian launches her own private equity firm.
Coming to you live from New York, it is Wednesday, September 7th. I'm Zain Asher, in for Richard Quest, and this is QUEST MEANS BUSINESS.
Good evening.
Tonight, the EU blames Russia for global energy shock and has now laid out a plan to stop it. The President of the European Commission says she will
propose a price cap on Russian natural gas. Ursula von der Leyen says the move will put a dent in Russia's energy profit.
European natural gas futures settled 13 percent lower after her announcement the price is back to its level. In early August, oil is down
to its lowest prices since early this year. Natural gas in the US is down as well.
Measures to counter a Russian energy squeeze come as the future looks even more perilous for Europe as suppliers are cut off and winter looms. CNN's
Anna Stewart tells us where Europe stands now.
ANNA STEWART, CNN REPORTER: The EU is facing an energy crisis even before Russia stopped the operations of Nord Stream 1, so it has really gone from
bad to worse, and there is no indication of when or even if gas supplies will resume down that pipeline.
On Wednesday, the EU Commission President, Ursula von der Leyen spoke ahead of an emergency EU energy meeting that's going to be held in Brussels on
Friday, and she laid out some proposals and I also think she made clear to Russia as much as the bloc that Europe has already weakened Russia's grip
on their energy.
(BEGIN VIDEO CLIP)
URSULA VON DER LEYEN, EUROPEAN COMMISSION PRESIDENT: At the beginning of the war, if you looked at the imported gas, 40 percent of it was Russian
gas since a long time. Today, we are down to nine percent only. So, these are the five measures we will discuss with the member states at the
informal Council Energy Minister Council on Friday.
These are tough times and they are not over soon, but I am deeply convinced that if we show the solidarity, the unity, and we have the determination
for that, we have the economic strength, we have the political will, that we shall overcome.
(END VIDEO CLIP)
STEWART: The five measures the EU will be putting to member states include reducing the bloc's electricity consumption, particularly looking at
reducing use at peak times. For some time now, analysts have told me it's critical not just to bolster energy supplies, but also reduced demand;
putting in place a revenue cap for non-gas generators who are profiting from higher energy prices and implementing a windfall tax on fossil fuel
generators, using that money to support vulnerable people and businesses.
Liquidity help for energy suppliers who are also paying such high prices for wholesale gas. And finally, a price cap on Russian gas. It is a lot for
EU member states to consider on Friday, but that last proposal, a price cap on Russian gas will, at least according to Russian President, Vladimir
Putin, who also spoke Wednesday simply mean no Russian gas being supplied at all. He warned that the West will freeze.
So, EU member states will potentially be signing up to a total cut up of Russian gas if they approve all of these proposals when they meet on
Friday.
Anna Stewart CNN, London.
ASHER: While the EU works on collective action, some countries are taking stock of their own suppliers.
Earlier Italy's Minister in charge of energy told CNN how he sees the chances of the country having enough fuel this winter.
(BEGIN VIDEO CLIP)
ROBERTO CINGOLANI, ITALIAN MINISTER FOR ECOLOGICAL TRANSITION: Our storage approximately -- has reached approximately 84 percent now, so progressing
quite well. The target is to reach 90 percent storage by in October. That's approximately 12.8 billion cubic meter.
I think if the winter will be reasonably cold, I mean on the standard, on the average of the last few years without big sacrifice and without
touching industrial activities, we should be able to carry on.
(END VIDEO CLIP)
ASHER: Rina Sikkut is the Minister in charge of Estonia's energy policy. She joins us live now from Tallinn. Rina, thank you so much for being with
us.
Before we talk about Estonia's situation, in particular, which is slightly different from the rest of Europe. I just want to get your thoughts on
what's happening in Europe right now, because the EU is facing an energy crisis of epic proportions.
What's at stake? And what's next for the EU as we head into the winter months?
RINA SIKKUT, ESTONIAN MINISTER OF ECONOMIC AFFAIRS AND INFRASTRUCTURE: Yes, hello. And if anyone was still thinking, what is the game that we are
playing, then Putin has made it all clear that it is a war situation, and since we know that democracy is terrifying for voting, I've told my
colleagues that democratic states think united even during tough times. It's a weapon Putin can never match.
So, the challenge for Europe is to be united to find the solution, to reduce our energy demand, to tap Russian energy sources and actually come
off of Russian energy as quickly as possible.
And I agree with Ursula von der Leyen that we have the political will, if we keep the solidarity and the unity, we can survive the tough winter.
ASHER: Estonia is, I guess, lucky in this situation, because it has alternative sort of fuel sources in the form of shale oil. Just walk us
through that. I mean, it's not the cleanest form of energy, but it certainly can protect you from what other countries in the EU are going
through right now.
How are you trying to revitalize this industry, given what's happening with Russia?
SIKKUT: Shale oil or oil shale that we use to produce our energy, it has a lot of CO2 waste, and it's a source that we would like to come off and we
have plans for that, to increase the investments into renewable energy sources, but temporarily, this winter, and that might be during the next
winter as well, that yes, the oil shale production has gone up and we use it to survive during the winter.
But in addition to that, we also have combined this heat and power cogeneration plants that use local biomass. But the reason we use local
sources is that we have been skeptical about the ties -- energy ties to Russia and we have come off Russian gas during the past 10 or 15 years. So
we were in a much better situation than other European member states. So, the platform we started from was different.
So it's easy to take the position that we should lose any ties to Russian energy and sanction Russian oil and gas. This is the Estonian position. And
I hope, sooner or later, we can get to that, but phasing out Russian fossil fuels, it is necessary now. But it drives us to the right direction.
The long-term plans, these haven't changed. Investing into renewables and reducing demand. Otherwise, it might be very difficult to explain to people
why do we have to reduce energy demand, but now, we're in a war situation enduring very tough times. It's easier to communicate this type of
behavioral change in Estonia and I think other European member states as well.
ASHER: Yes, certainly highlighted really the importance of a gradual shift -- more of a shift towards renewables. But as you point out, Estonia was
somewhat forward thinking in weaning itself off of Russian energy long before this war with Ukraine.
But in terms of the reliance now, in the short term, at least on oil shale, just walk us through what that means for climate goals for Estonia, because
obviously, as you point out, it isn't the best for the environment, this form of energy.
SIKKUT: Yes, I think Estonia has the most wasteful energy production in the European Union and this -- it can't be a long-term solution and before
the energy crisis, oil shale, it wasn't really -- it didn't stand any chance in our energy markets, because renewables, they were much cheaper.
[15:10:17]
But now, since anything that can give us electricity is on the market, then oil shale has like a renewed chance. But we understand that this is
something that is forced on us and any investments should be done into renewables, but in addition to the production, it is very important how to
divide the energy, and it's through market.
And at least in Estonia, this popular voice is saying that the high prices that come from the energy market, so there's something wrong with the
market. It is not the market system. It's just the lack of energy that we face and the quick phasing out of Russian fossil fuels, so keeping trust in
the market system is a common challenge for all European member states, and the Estonian position is that any decision of changes that will we should
be done in 27 countries, similarly.
Making 27 different systems or different changes at the same time, it doesn't give us the results. So keeping unity in terms of answering
Russia's threats, but keeping unity in how we make the necessary changes in the energy markets is also important.
ASHER: Yes, that is a really good point, actually. And obviously, there have been lessons learned on the over reliance and over dependence on one
country for an entire continent's energy needs. The EU is of course learning that lesson the hard way.
SIKKUT: Yes.
ASHER: We will have to leave it there. Thank you so much. Appreciate you being with us.
All right, up next, Britain's new Prime Minister promises to fix the cost of living prices, the latest from Westminster on her first full day in
office, that's next.
(COMMERCIAL BREAK)
ASHER: Britain's new Prime Minister promised speedy action on her first full day on the job. In her first Question and Answer session before
Parliament, Liz Truss said she would unveil her energy crisis plan on Thursday.
[15:15:05]
Households and businesses are desperate -- desperate for help soaring fuel bills. Liz Truss ruled out paying for it by putting more tax on the soaring
profits of energy firms.
(BEGIN VIDEO CLIP)
LIZ TRUSS, BRITISH PRIME MINISTER: We can't just deal with today's problem. We can't just put a sticking plaster on it. What we need to do is
increase our energy supplies long term, and that is why we will open up more supply in the North Sea which the Honourable Gentleman has opposed.
That is why we will build more nuclear power stations, which the Labour Party didn't do when they were in office, and that is why we will get on
with delivering the supply, as well as helping people through the winter.
(END VIDEO CLIP)
ASHER: Bianca Nobilo joins us live now.
So as you all know, Bianca, Prime Minister's Questions PM Qs are daunting, even for the most seasoned of Prime Ministers. This is only her first full
day in office A. How did she do? And B. What did she say about her plans to combat Britain's energy crisis?
BIANCA NOBILO, CNN INTERNATIONAL CORRESPONDENT: She didn't seem nervous at all, Zain, and perhaps that's because she does have a lot of experience
behind that dispatch box in other capacities, just not Prime Minister.
She was deliberate and focused. There was no sparkle, rhetoric, or bombast, like with Boris Johnson at times, but she did exchange a couple of barbs
with Keir Starmer, the opposition leader, and she has admitted before that she isn't the strongest communicator, she can be quite wobbly in that
respect.
So, I think many were sort of worried about how she would perform today, and she seemed to please the benches behind her, something we could have
witnessed as the fact that they were all waving their order papers, which is the government agenda around and a sign of enthusiasm, but we would
expect the Conservative Party to try and be banding together to support her in this moment.
Because if there is one thing that that party can do, it is to try and be pragmatic to repair their brand and increase their electoral favorability.
In terms of what she said, it was fascinating to see the traditional economic ideologies and dividing lines reemerge in the House of Commons
because even though Boris Johnson is often associated with being on the right of the Conservative Party, actually, that's because he often played
to the culture wars, but in terms of public spending, he wasn't really on the right of the Conservative Party.
But we had Liz Truss saying again and again, you can't tax your way to growth, making those arguments about the economy whereas Keir Starmer
opposite her was saying that progressive taxation is the only way forward and it simply isn't fair not to tax big companies at this time, and to let
other people in Britain shoulder that burden.
ASHER: Bianca Nobilo, live for us there, thank you so much.
And as Bianca just mentioned, Truss' planned tax cuts to boost the economy are making headlines. Now, a new paper says that that though could --could
-- potentially make inflation worse and argues that Central Banks cannot tame prices by setting higher rates if governments continue to spend and
borrow. It warns of a spiral in which rate hikes cause a recession, which means less tax income and governments borrow to make up for shortfall in
the budget in shunting inflation.
Francesco Bianchi co-wrote this paper. He is a Professor of Economics at Johns Hopkins University.
Francesco, thank you so much for being with us. So, how important is it for monetary policy to work in tandem with fiscal policy in order to curb
inflation? Because a lot of people focus heavily on the monetary policy aspect of it, including interest rate hikes, but not enough focus on the
fiscal policy element.
FRANCESCO BIANCHI, PROFESSOR OF ECONOMICS, JOHNS HOPKINS UNIVERSITY: It is an excellent question. So, our starting point is that persistent movements
in inflation are ultimately a fiscal phenomenon.
So our starting point is the analysis of inflation in the 1960s and 1970s. There was a persistent period of high inflation and what we point out is
that certainly monetary policy was established, but this was also combined with a rapid acceleration in spending with big welfare programs.
And what we argue is that when you want to bring down inflation that has a fiscal measure, that is the result of overspending, you need the
cooperation of both the monetary and fiscal authorities, exactly because of what you were saying, because if the monetary authority is certainly able
to push the economy into a recession if it wants to, but this can backfire in a couple of years.
If the result is farther debt accumulation, then this farther debt accumulation is also going to lead to what we call fiscal inflation.
ASHER: So if you think about, you know, the countries around the world that are dealing with super-high inflation. Now, let us just talk about the
UK, the UK inflation is at 10 percent. What is at stake if you tighten monetary policy, which obviously a lot of governments are doing in the form
of higher interest rates, but you, at the same time allow spending to sort of run away with itself. What's at stake for the global economy here?
[15:20:09]
BIANCHI: Yes, I mean, I think that's a very dangerous path that we might be taking because we could enter what we call this fiscal stagflation
dynamics, for which you have the Central Bank that is adamant at bringing inflation down. It is trying hard and it tries to increase rates, push the
economy, cool down the economy, at the same time you have a force that moves in the opposite direction.
And so you basically have that you're -- you keep slowing down the economy, but at the same time, you're not really addressing the root cause of
inflation, that is a lack of long-run fiscal sustainability.
And so here, I think what I want to be clear isn't that we need to increase taxes, like crazy immediately and instantaneously, but at the very least,
we should have a plan for the medium run on how we are going to deal with the rapid accumulation of debt that we saw in the US and in many other
countries, especially in the UK, the UK has some additional problems due to the conflict in Ukraine, and also to the fact that part of its debt is
indexed to inflation.
ASHER: So, what do you make of how the US is tackling inflation? I'm just curious whether or not you think that -- your thoughts on sort of monetary
policy and fiscal policy sort of working in tandem, being married together, it should be a greater part of the US economic policy. On the one hand,
obviously, we know that the US is raising interest rates in this country.
However, at the same time, just recently, the US also unveiled a massive, super expensive climate change bill. That was very expensive, in the
billions of dollars. Just walk us through your thoughts on how the US is handling this inflation crisis it finds itself in?
BIANCHI: Yes, I think at the very least, it's fair to say that US policymakers are sending some ambiguous signals. So, the Central Bank and
the Federal Reserve has been very forceful in its claim that is going to bring inflation down, that is going to increase rates, even if this means
an increase in unemployment.
On the fiscal side, I feel like the signals are a little bit less clear, and just to be precise, here, it is totally fine to have an ambitious plan
for the transition to the green economy, as long as we have a clear path of how we are going to finance it.
And the US has already the fiscal situation that in the long run is not stable in the sense we there are really commitments to a large amount of
spending, and to add to these additional amount of spending without again, making clear how these programs will be financed, it can be a little bit
risky.
Again, I want to be clear here, not taking a political stance, you can definitely implement these programs as long as you know how you're going to
finance them, and you know, typically this is done through taxation.
ASHER: Francesco Bianchi, live for us there. Thank you so much for being on the program.
All right, Kenya's President-elect, William Ruto will be sworn into office on Tuesday, in about five days or so from now. The Supreme Court just
upheld the official results of last month's presidential election, which gave Ruto a narrow victory. He is going to be taking office in a region
that is grappling with drought, food crisis, all of that, of course, worsened by the war in Ukraine.
In an exclusive interview, Christiane Amanpour asked him whether he blamed Russia, for the food shortages.
(BEGIN VIDEO CLIP)
WILLIAM RUTO, KENYA'S PRESIDENT-ELECT: I do not think it helps any situation, finger pointing, and blame game, I think we just need to sort
out what we have to sort out and we need to do what we have to do.
I would encourage that instead of the finger pointing and blame game as to who is responsible for what, we should sort out collectively as the
international community the conflict in Ukraine, so that whether it is that conflict, or it is whatever else that is responsible for the shortage of
grain, we put it behind us.
I would be part of the leadership that will work with other partners in the international community for the resolution of the conflict in Ukraine, and
so that we can get on with doing what we are doing because climate change is already a big enough problem. I do not think blame game would help in
that equation.
CHRISTIANE AMANPOUR, CNN INTERNATIONAL HOST: But let me ask you this then, you mentioned the cost of living, the pain of the Kenyan people like so
many others around the world. There are so many reasons for it.
You, yourself come from a pretty hard scrabble, rags to riches background. You called yourself and your road to success like the hustler. What do you
mean by that? Give me a little bit of your own background on what you think positions you and places you for this particular job at this particular
time?
[15:25:16]
RUTO: Like America, it was called the land of possibilities. Kenya, with my candidature and with winning this election, the child of every Kenyan
can know that they can live their dreams and actualize their dreams, irrespective of whatever background they come from.
And we are elevating Kenya to the next level that ethnicity cannot be a barrier. Your social status cannot be a barrier. The religion you profess
cannot be a barrier. That's all my candidature speaks to.
And when I ran for this office, there are many people who thought you needed a name recognition, a brand, a big family to come from, a big
community to come from, but with my candidature, the child of any Kenyan, small community, big community, irrespective of their social status, can
actually journey to success and journey to the pinnacle of any success, because it is possible, and the people of Kenya have made a decision that
any Kenyan can be the best they can, so long as they work hard, and they work at it.
(END VIDEO CLIP)
ASHER: Christiane Amanpour speaking with the Kenyan President-elect William Ruto there.
Pakistan pleads for greater international help as the country struggles to find land dry enough to bury its dead. That's next.
(COMMERCIAL BREAK)
[15:30:00]
(MUSIC PLAYING)
ASHER (voice-over): Hello, everyone, I'm Zain Asher.
Apple is releasing a new watch and iPhone, as well. We have the details and the latest features. Kim Kardashian is taking more steps into the business
world, now launching a private equity fund. Before that, this is CNN.
(MUSIC PLAYING)
ASHER (voice-over): Russia's President Putin will meet with China's president Xi Jinping next week at a summit in Uzbekistan. It will be Mr.
Xi's first foreign trip since the beginning of the pandemic. The two leaders have established a close relationship. They last met when President
Putin attended the Beijing Winter Olympics.
The U.S. President Barack Obama and ex first lady Michelle Obama are at the White House as I speak as their official White House portraits are
unveiled. It's the Obamas' first joint visit since the 44th president left office in 2017.
Temperatures in several cities in California have reached all-time highs on Tuesday. In the capital, Sacramento, it hit 47 degrees Celsius.
California's grid operators urging people to conserve energy for the eighth straight day.
The Red Cross says 15 people were killed when heavy rain triggered a landslide in Western Uganda. Most of the dead were women and children. Six
other people were hurt. Uganda's weather agency is warning the country could see unusually heavy and damaging rain from August all the way until
December.
(MUSIC PLAYING)
ASHER: Pakistan's prime minister says the floodwaters make parts of the country look like a sea. The scope of the disaster is astounding. A third
of the country is underwater. More than 1,300 lives have been lost and much of the country's crops and food supplies are ruined. Anna Coren reports --
and, a warning, this story contains disturbing images.
(BEGIN VIDEOTAPE)
ANNA COREN, CNN ANCHOR AND CORRESPONDENT (voice-over): A metal box is pulled through the floodwaters.
"What's in the box?" asks a bystander.
"A dead body," replies a man.
They open the lid and show the body of a man crammed in. The family doesn't have money for a funeral, he explains. There is no place to bury the dead.
That is how bad the situation is.
They continue to haul the makeshift coffin through the brown, murky water, searching for higher ground to bury the corpse.
In another district, a group of villagers drag a makeshift raft with another man's body through the floodwaters.
"We came across an official with a tractor," says a man, looking distressed. "We requested help to transport the body but he denied. There
is no ambulance, no support by anyone."
As Pakistan's catastrophic floods continue to inundate one-third of the country, the province of Sindh in the country's southeast is now bearing
much of the brunt of this climate-change induced disaster.
With the water unable to drain away, there is nowhere to give the dead a dignified burial. Instead, these villagers hold a funeral procession for
their relative in the very waters that claimed his life.
Pakistan's unprecedented monsoonal rains, that have been falling since June, have affected at least 33 million people across the country. That's
15 percent of the population.
Millions have been displaced, having lost their homes and crops in the floodwaters. And the government and aid agencies are struggling to provide
enough food, medical care and shelter to those who've lost everything.
The ferocity of the flash floods has been the biggest killer. More than 1,300 people have died, one-third of them children, including a 3-day-old
baby girl, whose family tried to escape their home as the water almost reached the ceiling.
PETER OPHOFF, IFRC: The wife had the baby in her hands. And jus at the end, she couldn't hold it, because the water was too strong. And the baby
swept away. And they found the baby but, unfortunately, the baby died.
COREN (voice-over): The people living near Lake Manchar, Pakistan's largest freshwater lake, a looming disaster supposedly averted, has come at
a very high price. Officials were forced to breach it due to dangerously high water levels.
[15:35:00]
But tens of thousands of villagers downstream have now been left homeless and further flooding is still expected.
"It destroyed our crops and houses. No one informed us it was happening. No one warned us," explained this farmer, tending to his cattle, barely
keeping their heads above water.
"The village is submerged. There is no way to get to our village," says this man. "Some families are now stranded. We appeal to the government to
send rescue teams and help these people."
A plea to an already overstretched government, grappling to deal with this unprecedented calamity -- Anna Coren, CNN, Hong Kong.
(END VIDEOTAPE)
ASHER: The next bite of Apple. The tech giant unveils new toys, including a high ed watch and a new range of iPhones. That's next.
(MUSIC PLAYING)
(COMMERCIAL BREAK)
(MUSIC PLAYING)
ASHER: The eyes of the tech world were on Apple, who unveiled its latest products. The highlight of the keynote event was the next generation of
smartphones. I'm talking about the iPhone 14 and the 14 Plus. The new models have eliminated the need for a physical SIM card.
There's also a new high end Apple Watch, called Ultra, which is designed for outdoor adventure. And Apple has also updated its popular headphones.
So far, investors certainly like what they see. Apple stock is up 1 percent. CNN's senior business writer Samantha Kelly joins us live now.
So let's talk about the iPhone 14. I am sure most people were focused on that.
How different is it from previous iterations, despite the fact that they eliminated the use of a physical SIM card?
SAMANTHA KELLY, CNN BUSINESS SENIOR WRITER: That's right. Yes, basically the model that they are doing now is there is two 6.1 inch devices and then
there is two 6.7 inch devices, which is the larger one. They're doing away with the iPhone Mini, which is something they've been testing out.
Basically you can have a standard phone or a bigger phone and, as you suggest, for the premium you have to pay a lot more for the bigger phones.
This year, the pro model is, as you would expect, faster, smarter, sleeker. They have more capabilities. What is really funny is the tagline for the
event this year was "Far out."
[15:40:00]
But I almost feel like it should be we've got your back or we've got you covered. So many of these new features that revolve around health, crash
detection, satellite technology, if you are lost or you don't have service, if you're off the grid, you're hiking, you need to contact emergency
services, you can use it without being connected to cellular.
So there's a lot of fascinating and small but really important puzzle pieces that have been laid in this framework here of helping people out
when they might not expect to need that support.
ASHER: And the Apple Watch is, more specifically, can do everything from track fertility to even detect car crashes, according to what I have read.
Just walk us through that. It's called Ultra, the new Apple Watch.
KELLY: That's right. Yes, there are three models now. There is the Series 8, which is kind of your baseline model. And then there is the SE, the more
affordable one. And then there is the Ultra. And you know it's funny.
This device is supposed to be for your sports enthusiasts, people who do the triathlons, they do deep sea scuba diving.
And we were following along with the news on Twitter, like, who is this device actually for?
It seems like it's very niche for the people who are really super outdoorsy. And the price is quite high, too. But they have three models
now. So it is aimed to reach pretty much everybody.
So the Apple Watch did get a lot of hype. But the star of the show is always the iPhone. There's a ton of new camera features as well this year.
So there are certainly lot of things to talk about.
ASHER: I understand over 300,000 people were tuned in to Apple's YouTube page, streaming this event.
How important is the launch of these new products, going into the U.S. holiday shopping season?
Walk us through that.
KELLY: Oh, my goodness. So these events are for any company -- Apple, Google, Samsung. They are basically infomercials. It used to be just for
press and that's how they got the information out.
But as these dedicated, loyal fan bases want to check out what's new and whether they're going to upgrade or not, they want to know what's coming
down the pipeline and maybe that will entice them to upgrade now or in the future.
An analyst group recently said that there is 1 billion iPhone users out there. And one-fourth of that, 250 million users haven't upgraded in the
last 3-4 years. That's a pretty massive group of people.
Whether or not those people are going to upgrade after seeing today's event, I am sure they are going to be thinking about it in the next year or
so. So it captures everyone's attention and it gives people something to look forward to or talk about.
ASHER: Sam Kelly, live for us there. Thanks so much, Sam.
High prices for essential goods and services are eroding consumer spending power, according to the Federal Reserve's latest report. But plenty of
companies are still cashing in on demand for premium products.
Britain's Unilever has proved that recently. The arm of the company that focuses on luxury brands, Prestige, recorded double digit growth in the
first half of 2022. Vasiliki Petrou is the CEO of Unilever Prestige and joins us now from London.
Vasiliki, I see a huge smile on your face.
Is that an indication that business is doing well?
Just walk us through this dichotomy we are seeing, whereby on the one hand, you have the global economy suffering from slower growth in certain parts.
And also, high inflation, which is affecting purchasing power from ordinary consumers. But on the other, you have businesses like Unilever Prestige
that still are doing well in this environment. Just explain that to us.
VASILIKI PETROU, UNILEVER PRESTIGE CEO: Absolutely. First of all, thank you for having me with you. I'm a big fan of CNN. So I'm very happy to be
here.
Indeed, in times of recession, the beauty industry has typically been resilient. The way I explain it is that people always want to have access
to little luxuries, whether that is lipstick or a skincare cream or an amazing hair product.
People continue to date, they continue to interview, they continue to socially engage. And it's really important to feel good, to look good.
Beauty is always connected to confidence, to self-esteem but really, also to wellness. Especially after COVID, there is such a straighter line into
how people feel.
[15:45:00]
And I think this is really what underpins the kind of resilience of beauty to any kind of economic turbulence.
ASHER: So are there certain types of beauty products that do well or do better in this kind of turbulent economic environment?
What are the key ingredients for a beauty product to still do well or be recession proof, if you will, in this kind of economic environment?
PETROU: Yes, traditionally, there have been industries that were talked about, like the lipstick index. Interesting color lipsticks are selling
very well. I just had my makeup done before the session and the makeup artist was telling me that the latest Hourglass, we are always selling out.
So fragrance index is something that was generated during COVID-19 because people also turned to fragrance, because of the need to dream, to escape.
But I think what we are seeing during this period, as well, is that skin care is selling well.
And I think this is a consequence of the first COVID economy. For consumers now, skincare is actually health care. People want to treat their skin like
they are treating their health.
So there is a new index and a new name that has been created, called the beauty index. It actually reflects all the categories -- lipstick,
fragrances and skincare included. And the outlook is actually to be quite positive, despite the recession.
ASHER: It almost feels as though, despite being stuck at home for almost two years, people are eager to go out and take care of themselves and get
dressed up and wear makeup.
But what about business in China?
Because China, as you know, has had very stringent COVID policies, zero COVID policies, especially in places like Shanghai.
How has that affected business?
PETROU: For us, actually, we have grown very well in China. Probably you know that we were in close quarters until recently. But we are now in the
domestic market and we are cruelty-free. We are the first company to get a registration for domestic sell and be cruelty-free. It was the first brand
to do that.
Our business continues to be strong, despite the lockdown. China's population is very active in skin care, color cosmetics and makeup. And
while the lockdown was there for a particular period, especially in Shanghai, now we see a big rebound into the use of cosmetics in China. We
are growing quite well in China.
ASHER: Vasiliki Petrou, thanks for being with us.
PETROU: Thank you.
ASHER: OK, you're very welcome.
First, Kim Kardashian conquered reality TV and she dominated the worlds of fashion and beauty. Now she's taking on, get this, private equity. We will
explain, after the break.
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[15:50:00]
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ASHER: Gulf Arab states want Netflix to remove content that they say offends Islamic values. The Gulf Cooperation Council led by Saudi Arabia
says that it's going to be taking legal action if the streaming giant doesn't comply. Scott McLean has more.
(BEGIN VIDEOTAPE)
SCOTT MCLEAN, CNN CORRESPONDENT: This all started with a joint statement aimed at Netflix from the Saudi Arabian government and the Gulf Cooperation
Council, warning Netflix about content aimed at children that in its view violated Islamic and societal values.
It didn't specifically identify the content in question but a Saudi state TV report did. The show was called "Jurassic World: Camp Cretaceous." This
is an animated spinoff of the "Jurassic Park" films and this is the scene in question.
(VIDEO CLIP, "JURASSIC WORLD: CAMP CRETACEOUS")
MCLEAN: Saudi state TV blurred that kiss and said that the show aimed at kids is calling for homosexual actions and moral corruption in its words.
The statement from the Saudi government and the Gulf Cooperation Council called on Netflix to remove the content, saying, in part, "in the event
that the violated content continues to be broadcast, the necessary legal measures will be taken."
The Emirati government also put out a very similar statement. And it seems like there has been some action taken. If you access Netflix from the
Emirates right now, you will find the show's been completely removed from the children's section. You can still access it through an adult profile,
though it now carries the rating of 18 plus.
We have reached out to Netflix for comment but, so far, we've gotten no response. Of course, homosexuality is illegal in both the UAE and in Saudi
Arabia. Earlier this year, the Saudis even started cracking down on rainbow colored toys and clothing for the same reason that they are taking aim at
this show.
This is not the first time that Hollywood has been asked to censor itself. Earlier this year, the film "Lightyear," a spinoff of the "Toy Story"
franchise, was not shown in several Middle Eastern countries because of a similar same-sex kissing scene.
In 2019, Netflix removed an episode of its show, "The Patriot Act," which was critical of the Saudi government over the killing of journalist Jamal
Khashoggi.
Streaming services are now having to adapt to the regions that they are operating in. Just last month, Disney+ said that its content should align
with local regulatory requirements. So censorship, it seems, more and more, is the price of doing business -- Scott McLean, CNN, London.
(END VIDEOTAPE)
ASHER: It's getting harder to keep up with Kim Kardashian. The reality star says that she is now breaking into private equity. She has teamed up
with a former Carlyle executive to launch a new firm called SKKY Partners.
They are looking into media, hospitality and consumer product businesses. It's also the latest addition of Kardashian's empire, which includes
shapewear company SKIMS and skincare company Skkn by Kim. Forbes last year listed her among the world's billionaires.
Chloe Melas joins us now from New York.
So how does this come about?
You have Kim Kardashian teaming up a former Carlyle executive.
How on Earth did this union come about?
CHLOE MELAS, CNN CORRESPONDENT: Look, Kim Kardashian and her family are such smart business women.
[15:30:00]
And like you said, Zain, last year, Forbes reported that Kim officially became a billionaire, thanks to SKIMS and her main makeup line, KKW Beauty.
She holds assets in cash, investments and real estate.
So honestly, for me, as someone who's been covering Kim for 15 years, this doesn't come as a surprise at all. She is a savvy business mogul. Yes, I
said mogul. So like you said, she is partnering with Jay Sammons, a former executive at the Carlyle Group.
They are launching SKKY Partners. Her mother, her mom, Kris Jenner, who many people believe is really the ultimate brains behind the Kardashian
family, she is going to be joining SKYY as a partner in this.
And now, the fund has not begun raising any money yet, Zain. But they do plan to start investing. Sammons left Carlyle, this investment group, after
being there for 16 years. He is known for investing in brands like Beats by Dre and the streetwear brand Supreme.
So he has an incredible resume. And then to partner with Kim Kardashian, I will say that this is just one example of many major, high net worth
celebrities who are doing exactly what Kim is doing.
ASHER: Right, because she's got private equity, she's got the shapewear company, she's got the reality -- I am losing track now -- the reality
show. And I think there are many, many other ventures for Kim Kardashian. She is, as we talked about, a billionaire, thanks to the shapewear line,
SKIMS.
We have to leave it there. We are out of time, thank you my. Friend.
We will have a final look at the markets after a short break.
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ASHER: Let's take a look at how the stocks are doing. The Dow is up more than 430 points. That is been green pretty much all day. Falling oil prices
may be easing inflation fears. As for Dow components, let's take a look. Green almost across the board except besides Chevron. It is down on those
oil prices as well.
3M's leading up over 3 percent as well. Retailers Home Depot and Walmart both gained over 2 percent. Apple up about 1 percent. They had their
product unveiling event today of the iPhone 14.
And that is the business news, I'm Zain Asher. The closing bell is ringing as I speak.
END
