Friday, July 31, 2009

 

Organic food: Is it worth the money?

Invariably right next to the shelf filled with normal looking potatoes or onions are their neat and well packaged organic counterparts. Both the conventional and organic varieties are sold under the same supermarket brand name, so there is not much to chose between the brand as such (hey, its only vegetables after all!). But the prices tell a different story, the well packaged organic cousin is at least a £1 or more expensive. You wonder whether the price is worth it, but the thought of the pesticide scarred poorer cousin being somehow less nutritious wins the argument (at times) and you snap up the expensive organic variety and head towards the checkout.

Well if nutrition is the key decision factor for shelling out extra bucks for the organic variety then its perhaps time to think again. A recent study commissioned by the Food Standards Agency (FSA) reveals that "there are no important differences in the nutrition content, or any additional health benefits, of organic food when compared with conventionally produced food". Ouch! Among others, researchers reviewed papers published on this topic over the last 50 years before arriving at this conclusion.

As of now it appears that the global appetite for organically produced food is rising and in the U.K, the market for organic food is currently estimated to be worth £2bn. The question is whether the findings of this study and possibly others along similar lines will dent the market for organic foods in the years to come.

Proponents for organic food cite many other factors, including taste, sustainable farming, benefit to the environment etc as reasons to switch to organic food. Needless to say, in the years ahead it would be these factors and not nutrition which shapes public opinion about organic food.

On a different note, a good re-read of this blog post makes me feel like I am doing a reading comprehension/critical reasoning passage in the middle of a really long exam. The only aspect missing is a daft question on the lines of - What is the tone of the passage? or What does the passage suggest about the author's attitude towards Organic food? :-)

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Friday, July 17, 2009

 

Is the spending sustainable?

Manchester City have thrown in £50mn into the transfer market so far this summer, snapping up big name signings such as Carlos Tevez and Emmanuel Adebayor. Of course, this spending pales in comparison with the money being splashed around by Real Madrid. The question really is, signing up top players might produce results, but is this extravagant spending in transfer market really sustainable?

Sir Alex for one thinks not. In a recent statement he labelled the current transfer market as 'ridiculous'. Many believe that wages and levels of debt in clubs is getting out of hand. I guess, this in part could explain the rather prudent approach taken by the top 4 premier league clubs this time with regards to spending big money. Most of them have been quite happy to offload high profile stars to bring down debt levels and the wage-to-turnover ratio. Even big spending Chelsea have had to trim their team size to bring down the ratio from 81% a couple of years ago, to the present figure of 68%. Interestingly, Chelsea have a turnover of £213mn, the fifth highest among European clubs, yet thanks to their enormous wage costs and debt, they finished the year with a net loss in the range of a staggering £65mn. Many believe that a combination of letting academy and youth squad players break into the main team, and weaning the club away from over-reliance on soft loans (i.e. 0% interest loans) from owner Roman Abramovich, is the way forward for the clubs' long term sustainability.

At the other end, Arsenal has the lowest wage-to-turnover ratio among the top 10 teams (based on last seasons standings) at 45%, which in my opinion is a clear reflection of the abysmal amount that Arsene Wenger is spending on getting big names into the club. Wonder if Wenger has lost the plot in his attempt to keep costs under control.

The table below (courtesy: The Guardian) gives a snapshot of the key figures for the top 10 clubs in EPL. The turnover figures reveal a wide chasm between the big 4 of EPL and the rest of the cohort.

Club

Turnover

(in £mn’s)

Wage

(in £mn’s)

Wage/Turnover

Debt

(in £mn’s)

Manchester United

256.2

121.1

47%

699

Liverpool

159

80

50%

280

Chelsea

213.6

149

68%

701

Arsenal

223

101.3

45%

416

Everton

76

44.5

59%

39

Aston Villa

75.6

50.4

66.6%

73

Fulham

53.7

39.3

73%

197

Tottenham Hotspur

114.8

52.9

46%

65

West Ham United

57

44.2

76%

36

Manchester City

82.3

54.2

66%

147

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