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Quest Means Business
Norway, Ireland And Spain To Recognize Palestinian State; British Prime Minister Announces July 4 Election; Kenyan President Ruto To Visit White House; Nvidia Reports Record Q1 Revenue Of $26 Billion; China Uses AI-Powered Videos To Promote Its Global Agenda; Interview With Colavita USA CEO Giovanni Colavita. Aired 4-4:45p ET
Aired May 22, 2024 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:11]
RICHARD QUEST, CNN INTERNATIONAL HOST: There is your bell ringing on Wall Street. The Dow is off over 200 points. The Fed Minutes are spooking the
market strong, though a gavel there. We are waiting for the video results. They should be out in about 10 to 15 minutes.
The markets and there is an enormous amount for you and I to chew over during the hour.
Norway, Spain, and Ireland to recognize Palestinian statehood. They call it an important step towards peace.
The British Prime Minister Rishi Sunak has called a snap general election, July the 4th is the date, as the Tory Party seeks to defy serious
headwinds. The polls suggest defeat.
And you might as well call this liquid gold. It is olive oil, extra virgin olive oil. Only the best on QUEST MEANS BUSINESS. Well, it is up more than
40 percent, the price of olive oil in the last year. The CEO of Colavita will be with me, but then, you know, the price is up because you've seen it
in your supermarket.
Together, we are live. I'm in New York. It is Wednesday. It is May 22nd. I am Richard Quest. I mean business.
Good day to you.
We begin with Ireland's foreign minister who tells me the time is right to recognize a Palestinian State. Ireland is one of three European nations
that have announced plans to formally recognize a Palestinian state. Here are the two countries: Spain and Norway, the first governments in Western
Europe to take this measure.
The decision has sparked fury in Israel with the Prime Minister Benjamin Netanyahu saying it rewards terrorists and will encourage more attacks like
the one carried out by Hamas last October.
Ireland's foreign minister, Micheal Martin said he believes the move will actually help speed up a two-state solution.
(BEGIN VIDEOTAPE)
MICHEAL MARTIN, IRISH FOREIGN MINISTER: There is a growing impatience with the lack of any political will on behalf of Israel towards a political
track and towards realizing that in our view, a two-state solution is the only way that Israelis and Palestinians can live in harmony side-by-side.
That's ultimately the way forward.
There cannot just be a military solution to such a complex issue in terms of nationhood, identity, and an absence of conflict.
QUEST: In terms of the timing, we come back to this idea, yes, even if one accepts that the principles of the two-state solution, you have half the
Palestinian territories, Gaza being, until now recently governed, ruled by Hamas which doesn't even accept the right of Israel to exist.
So I get the nuance of what you're doing at the moment. I guess the question is its timing at a time when Hamas is still in a sense a force to
be reckoned with.
MARTIN: But I believe that the timing is important in terms of empowering moderation within Palestine. our view is that Israeli strategy and they
have their views, but our view was that their strategies have actually empowered extremism within Palestine and the moderates have been
marginalized.
I think European Union states coming forward and saying, we believe, and we will recognize a Palestinian state gives strength to, for example, the
Palestinian Authority, it gives strength to those who in Palestine recognize an Israeli State, who renounce violence and are prepared to enter
turn into an negotiations to develop a resolution of this.
So, and also, we are very conscious of the efforts being made by Arab States to present the comprehensive peace framework and about 14 states
will meet on Sunday, next Sunday, and other than European, to discuss the ideas that Arab States have for a peaceful resolution of this issue.
(END VIDEOTAPE)
QUEST: Aaron David Miller was listening to that, senior fellow at the Carnegie Endowment for International Peace, and former Middle East
negotiator for the State Department.
Let's not get into too much to the politics. The US doesn't like it. This, that and -- but in reality, do you think that what those three countries
did is helpful or not.
AARON DAVID MILLER, CNN GLOBAL AFFAIRS ANALYST: I understand the sentiment, and I think it reflects the growing isolation of both Israel and the United
States in the wake of the October 7th Hamas terror surge and the prosecution under those war against Hamas in Gaza.
[16:05:02]
It is just, Richard, that Palestinian statehood right now in May of 2024 is better suited to a galaxy far, far away than the realities back here on
Planet Earth and they are crude realities for Palestinians, I understand the importance of symbolism, but if you take a look at the Palestinian
predicament right now, Mahmoud Abbas, 88-year-old man in the 19th almost 20th year of a four-year term controls no more than 40 percent of the West
Bank.
Hamas controlled Gaza up until October 2023 and the notion somehow that statehood could take some sort of meaningful manifestation right now, the
chances of that are slim and one last point, I know we are not nearly on the cusp of any sort of negotiated solution between Israelis and
Palestinians.
But if in fact the Palestinian State is to come into being, it will come into being as a consequence of those negotiations, and an Israeli
government and a Palestinian authority willing to tackle the core issues, Jerusalem, borders, security, refugees, and the end of conflict. None of
that stuff is even close to resolution.
And I think like so many other things this is going to drive parties to their respective corners.
QUEST: You see, I was surprised Norway went with this, the Oslo Accords and all of that. It is surprising -- I mean, the Irish dressed it up as being,
you know, they have their own independence issues in the 1920s, they could identify with it, and Spain bearing in mind the Catalan whole issue, it
sort of re-begs the question, why on earth would they even want to be putting their head above the parapet on this?
MILLER: The Norwegians played such a critical role in the Oslo process, which held out the promise of the possibility of negotiations between
Israel and the PLO, and the Norwegians really were custodians of this process.
I think the Norwegian foreign minister made it unmistakably clear in his press interviews that he has done this in part because -- or Norway has
done this in part because they saw no possibility the current government of Israel is interested even before October 7th in any sort of negotiated
solution.
The Irish ambassador to Israel wrote, I thought a very balanced piece explaining Ireland's position. It wasn't hostility toward Israel she
claimed, but in essence, a way to boost the morale of a very depressed Palestinian population. It is just that the prospects of this coming into
being are slim to none and I think the two most important parties in order that could facilitate Palestinian statehood, the government of Israel, and
clearly the United States are adamantly opposed.
QUEST: David Miller, I am grateful to you, sir. Thank you.
The troops in Ukraine are holding out to protect one town that they can't afford to lose. If Russian forces take this town, their artillery will be
in range of Ukraine's second largest city.
CNN's Nick Paton Walsh, with this exclusive report which has graphic images, I need to warn you.
(BEGIN VIDEOTAPE)
NICK PATON WALSH, CNN CHIEF INTERNATIONAL SECURITY CORRESPONDENT (voice over): Some towns they can never let Putin take, and this Lyptsi is one of
them.
Destroyed artillery on the streets, homes aflame from an airstrike, they can only move at night.
UNIDENTIFIED MALE: Lots of --
WALSH (voice over): It's a perilous grip they keep, but lose here and Russian artillery will be in range of Ukraine's second city, Kharkiv.
WALSH (on camera): You can still smell the smoke here from an airstrike that landed just in the last hour or so.
WALSH (voice over): This is life under the drone. We are the first reporters into the heart of the town, only soldiers left here underground.
The Khartiia 13th National Guard first tackled Russia's new offensive.
(UNIDENTIFIED MALE speaking in foreign language.)
TRANSLATION: You saw it is all burning. It's like that every night.
WALSH (on camera): Do you think there were good enough fortifications here?
(UNIDENTIFIED MALE speaking in foreign language.)
TRANSLATION: Nothing was prepared here. Nothing. Just nothing.
All the positions are being built by the hands of the infantry. The Russians are trained professional soldiers, we can see it from their
equipment, from their tactics.
WALSH (voice over): There were eight airstrikes just in the last hour, so we leave soon.
A buzzing noise near us, very close, and the only way they know whose drone this is, is if it attacks.
(NICK PATON WALSH speaking in foreign language.)
TRANSLATION: Is it your drone?
(UNIDENTIFIED MALE speaking in foreign language.)
TRANSLATION: Who knows?
WALSH (voice over): All around Kharkiv, they don't have enough guns and the Russians have too many drones.
[16:10:10]
The 92nd Assault Brigade show us something that isn't even theirs --
WALSH (on camera): Russian artillery piece that they captured in the first year of the war in the fighting in the Kharkiv region, and now they use
strangely French mortar rounds to fire from here, just a sign of how little appropriate ammunition they have available to them.
This wire as a protection from FPV drones.
WALSH (voice over): Above, he sees a drone with two battery packs, a long- range scout.
WALSH (on camera): Run, basement.
WALSH (voice over): It is not friendly. If you can tell it is an attack drone, hide.
This seems to be a scout so running is better before it calls in shelling.
Another artillery unit wants to show us something not even Russian, but Soviet. Made in the 1940s, it can still fire newer Polish shells. In the
autumn, it was a hundred a day, now, it is ten.
WALSH (on camera): Extraordinary to see something here that's three times the age of either of these two guys holding back a new Russian offensive in
2024.
They say the metal is so old that that limits the number of times --
WALSH (voice over): That sound warns another drone is incoming and back in the bunker, they show us the online bought, $30.00 gadget that is their
best warning mechanism.
The team here embody Ukraine's exhaustion and resilience. Older guys, wounded infantry. Artur (ph) has drone shrapnel in his arms still.
(UNIDENTIFIED MALE speaking in foreign language.)
TRANSLATION: Moving towards Lozova.
(UNIDENTIFIED MALE speaking in foreign language.)
TRANSLATION: Yes, yes.
(UNIDENTIFIED MALE speaking in foreign language.)
TRANSLATION: Orlan, don't go out at all for now.
WALSH (on camera): We just saw an Orlan, Russian drone passing overhead, so he is saying better stay inside.
WALSH (voice over): On the way back into the city, we see what fuels this defense. This was a lake side resort, football, cocktails, the beach --
WALSH (on camera): Extraordinary devastation and they had to collect the bodies.
WALSH (voice over): A seven months pregnant woman was among the seven dead here. Another body found later, just fragments in the mulch.
Russia's advance looms over whatever life persists here, belching out over homes. The dark is little salvation, this may be a drone being hit, but
they killed two when they crashed in failure.
Flares breach the enforced blackout, Moscow is getting nearer again and there are always too many blasts before dawn.
Nick Paton Walsh, CNN, Kharkiv, Ukraine.
(END VIDEOTAPE)
QUEST: The British Prime Minister Rishi Sunak has called a general election in the UK for July, July the 4th. The polling suggests his Conservative
Party is on are hiding to lose. Well talk about it in a moment talk.
(COMMERCIAL BREAK)
[16:15:48]
QUEST: The British Prime Minister Rishi Sunak has announced a general election that's a couple of hours ago. It will take place on July the 4th.
The prime minister was required to hold a vote by January, and he laid out some of the issues facing UK voters.
(BEGIN VIDEO CLIP)
RISHI SUNAK, BRITISH PRIME MINISTER: This election will take place at a time when the world is more dangerous than it has been since the end of the
Cold War. Putin's Russia is waging a brutal war in Ukraine and will not stop there if he succeeds. That war is also made it all too clear the risk
to our energy security.
In the Middle East, the forces of Islamic extremism threaten regional and ultimately global stability.
(END VIDEO CLIP)
QUEST: Now, the recent polls suggest that his Conservative Party is likely to lose and will leave power after 14 years in office.
His announcement, the prime minister claimed victory with the UK's fight against inflation, but the opposition Labour Party, which is in the lead,
is quick to note the country's anemic growth.
Mohammed Hussein is with me. He is the president of Edelman Global Advisory UK, former chief press officer for David Cameron.
First of all, as a press officer, were you surprised, horrified as the rest of us that the PM decided to have a press conference to announce this in
the pouring rain? I mean, it is a headline writer's delight and dream, drowning street, wiped out, wet.
I mean, what were they thinking?
MOHAMMED HUSSEIN, PRESIDENT, EDELMAN GLOBAL ADVISORY UK: Yes, it was really, really bad optics and in these situations, having dealt with
similar things in my career, you always have a wet weather option but, I think it is symptomatic of the wider mood within the Conservative Party.
And in the UK, there was some speculation the prime minister could call it in the summer, but the prevailing orthodoxy was very much, let's wait a bit
longer, see if something turns up, see if some of the better economic data and she has an impact on people and their voting intentions.
And it just feels like that has been seen a too big a risk and they've decided to go earlier.
QUEST: Essentially, they've gone earlier because the situation could get worse. Look at the polls. Look at the polls, I mean, this the one we were
looking at in the moment, Tories 25, Labour 39, undecided, even if all the undecided goes to Tories, they still lose.
Is there any way -- I mean, of course there is a way, but is it at all likely that they win? They can win?
HUSSEIN: No, I think it is very, very unlikely. I think the debate right now is how do you limit the scale of the damage? How do you potentially
save ten, twenty, thirty MPs, 30 Conservative seats, rather than winning outright. Nobody you talk to, and when you talk to people privately in
government or members of Parliament thinks winning for the Conservatives on the agenda.
And it is about no real easy choices like the question I think really is, is it going to get any better than it is now? You had a bit of a clue if
you had better news and then do you squander it and take risks by going long? And I think that has been the debate in Downing Street for the last
few days.
QUEST: Where did it go wrong? I mean, was it defenestrating Boris? Was it what happened of course, with Liz Truss? Which bit of all of this finally
did them in?
HUSSEIN: I think it is all of the above. The Liz Truss mini budget and the debacle of her premiership, people are still feeling the impact of it. It
does have real-world consequences and that's why the economy has had to have a lot of work done to it and the prime minister on inflation has been
marking that today, but that gets us back to where things were before the Truss economic experiment.
And you don't really get thanked for solving problems when it comes to elections. At the ballot box, people want to know, well, what are you going
to do for us next? The people still feel worse off on a slightly worse economic situation that has consequences.
[16:20:07]
And I think also, fatigue. You know, 14 years in power. People feel that perhaps you're running out of ideas or you're just recycling.
It is the same faces into different jobs. And sometimes people are looking for something else.
QUEST: There was this devastating article recently, I forget exactly what economist or -- it was somewhere, which basically said Britain today is
worse off than it was 14 years ago. It was fairly devastating.
HUSSEIN: Yes, it was, and this will be something you'll hear lots of in the campaign going forward. It is now the main attack lines from the Labour
opposition and the government would say, there have been geopolitical events and things, and nobody predicted in terms of the pandemic and the
response to that, the government spent billions and billions of pounds paying for furlough, paying for jobs, trying to secure people's lives and
livelihoods or the impact of the Ukraine war and Russia's aggression in terms of energy prices and various things.
I think the problem with that argument is that a lot of people, a lot of countries are in that position and actually, again, when it comes to the
ballot box, people want to know what it means for them and their families, what puts money in their pocket.
They don't really want to hear about the big geopolitical issues which are valid, but don't translate at election time.
QUEST: We will talk about this much more with you as the election moves on. I am grateful to you, sir.
Thank you very much indeed.
HUSSEIN: Thank you.
QUEST: That article I was referring to was actually in "The New Yorker," I just wanted to clarify that.
Thank you very much.
Kenya's President William Ruto has arrived at the White House for a state visit by an African leader to the US nearly 16 years.
The US are Kenya are working to improve economic and security cooperation. Russia and China are both investing more heavily in the continent.
Larry Madowo reports.
(BEGIN VIDEOTAPE)
LARRY MADOWO, CNN CORRESPONDENT: Kenya's President William Ruto beginning a historic state visit to the United States in Atlanta.
His American charm offensive following last month's meeting with the US Commerce Secretary, Gina Raimondo in Nairobi.
GINA RAIMONDO, US COMMERCE SECRETARY: I said to him, we are not here to lecture. We are here to partner, we are here to learn from you. We are here
to invest.
MADOWO (on camera): Why is the US the best over, say, China or Russia that are also making big moves in to the continent?
Why is the US the best for African countries?
RAIMONDO: There aren't strings attached. It is an opportunity to partner together so that's why we think we are the partner of choice.
MADOWO (voice over): China has built major infrastructure projects across Africa despite criticism from western countries about lack of transparency
and predatory loans.
Russia's influence is also expanding, especially in weapons sales and military ties. The Kenyan president is a key US ally in the continent and
this week's state visit is the first by an African head of state in 16 years.
But William Ruto did not pick a favorite partner nation when asked directly ahead of his trip to Washington.
WILLIAM RUTO, KENYAN PRESIDENT: The best partner for us is the one that accepts to have a deal that is a win-win.
We will be having conversation about the Africa Growth and Opportunities Act, the AGOA, that gives us duty-free, quota-free access to the American
market with our goods.
MADOWO (voice over): African nation's want the 24 year-old AGOA renewed before it expires next year.
But some, like Rwanda have been blocked from accessing the US markets. That country's president Paul Kagame stood his ground in a dispute linked to
2019 ban on some clothing imports, a move designed to develop its local textile industry.
PAUL KAGAME, KENYAN PRESIDENT: I wanted to clarify, there is hypocrisy and all kinds of stuff we have to deal. You know, they forced it upon. They you
say, you must accept the secondhand clothes and we told them, we will not.
They say, okay, we will strike you off AGOA, which they did.
MADOWO (voice over): America's influence has declined in Africa.
JOE BIDEN, PRESIDENT OF THE UNITED STATES: Africa is an indispensable global partner.
MADOWO (voice over): China has overtaken the US in soft power on the continent according to a recent Gallup poll.
Larry Madowo, CNN, Nairobi.
(END VIDEOTAPE)
QUEST: Now, in a moment, can't beat a bit of olive oil, particularly on a really nice, crusty bread, but olive oil prices are skyrocketing. This
olive oil is in this man's blood, Giovanni Colavita, third-generation family to win the Italian improved company.
I want to know, sir, after the break why is it so expensive? Why are prices going up? In a moment.
(COMMERCIAL BREAK)
[16:28:40]
QUEST: Lots of ships, besides the Staten Island ferry. It is the first day of Fleet Week here in New York. Navy ships, Coast Guard cutters and academy
patrol boats, ships from Germany will also be joining. That's a live picture of the beautiful harbor and the ships Fleet Week underway.
Investors are waging more from NVIDIA. The chipmakers has just announced earnings moments ago, the company beat revenue estimates quite handsomely.
Its shares are up by about four percent after hours.
The investor call is in just around half an hour from now.
Let's look at the way the stock price nearly doubled this year, driven by enthusiasm for AI.
Clare Duffy is with me.
I read the first three or four paragraphs of the announcement, they've been up 300 percent, two hundred, whatever. I mean is it as good as it seems?
CLARE DUFFY, CNN BUSINESS WRITER: I mean, look, Richard, I think this is sort of what investors were expecting, although it did beat expectations in
terms of the actual numbers, but a number of the major tech companies -- Microsoft, Alphabet, Meta -- have announced in recent weeks that they are
investing billions of dollars into artificial intelligence capital expenditures.
And this is the company see where they are going to be spending the majority of that money. NVIDIA is still unmatched in terms of its ability
to produce these chips that power AI tools -- generative artificial intelligence.
And so it is not totally surprising to see that NVIDIA is still on a rise here, but I do think there had been questions about whether it could
continue this momentum. There are questions surrounding the US restrictions on exports of artificial intelligence chips to China, as well as just
really like how long can this rally go?
[16:30:21]
But it is clear that this rally is continuing, at least for now at NVIDIA. I mean, you do have revenue beat by about $2 billion, what Wall Street was
expecting, up 262 percent year-over-year and profits beat by about 460 percent year-over-year. So really significant growth.
The company also announced a 10-for-1 stock split so that may be a welcome sign for investors, as well as non-investors in this company who want to
get in on it, but haven't been able to because the price has been too high.
QUEST: Right. Now, now, hang on. I didn't see that in the announcement, but if I'm not mistaken, they did a 6-for-1 stock split not that long ago.
DUFFY: It's just a sign of what meteoric rise this company has been on. That the stock is growing so quickly that it's going to split yet again.
QUEST: Right.
DUFFY: And look, I mean, the other thing that investors will be happy to hear here is that the company increased its quarterly dividends.
QUEST: Yes.
DUFFY: So it's looking to sort of pay out investors for some of these gains that it's seeing as it continues on this really tremendous rise, Richard.
QUEST: And I noticed that during the week Samsung has replaced its chip boss. Obviously trying to improve his competition.
Clare, glad you were there to read these results for us. I'm grateful. Thank you.
Investors are excited about AI's potential. Now how can it be misused? China has been employing deepfake videos to promote its foreign policy and
some of them are based on real people. And those people, as you might expect, are not very happy.
CNN's Will Ripley is in Taipei.
(BEGIN VIDEOTAPE)
WILL RIPLEY, CNN CORRESPONDENT (voice-over): On Chinese social media what you see --
UNIDENTIFIED FEMALE: I am Chinese.
RIPLEY: -- may not be what you get.
UNIDENTIFIED FEMALE (through text translation): Single men in China, I have good news.
RIPLEY: The women in these videos supposedly Russian with messages appealing to the romantic fantasies and nationalist pride of some Chinese
men.
UNIDENTIFIED FEMALE (through text translation): I love this land. I love China.
RIPLEY: Below the videos, comments like this, welcome to China, Russian beauty.
OLGA LOIEK, YOUTUBER: This is so creepy.
RIPLEY: Olga Loiek is a student at the University of Pennsylvania. She claims in this video on her YouTube channel, someone cloned her image in
China and is peddling products and propaganda with AI generated deepfakes of her.
LOIEK: The narratives, my clothes, voicing sounded like blatant propaganda.
RIPLEY: Deepfakes designed to build a narrative of alliance and admiration between China and Russia. Largely untouched by the government's heavy
handed censors.
CNN cannot independently verify the videos, which have now been taken down, but not before Loiek says they racked up thousands of views.
LOIEK: Here, she already has 140,000 fans and she has a ton of videos with my face where she likes saying how much she likes Russia and how much
Russia needs Chinese economic support. As Ukrainian, this has obviously been infuriating for me.
RIPLEY: How this happened? Loiek says she has no idea. CNN showed Loiek's real and fake videos to people in Taipei.
Couldn't tell the difference? How's her Chinese?
UNIDENTIFIED FEMALE: AI.
RIPLEY: AI? You can tell?
UNIDENTIFIED FEMALE: Yes.
UNIDENTIFIED MALE: No. I have no idea.
RIPLEY: Can't tell which one is AI?
UNIDENTIFIED MALE: No.
RIPLEY (voice-over): Artificial intelligence is advancing so quickly experts say you need AI detection software just to identify some deepfakes.
TYLER WILLIAMS, DIRECTOR OF INVESTIGATIONS, GRAPHIKA: A general kind of undermining of a source of truth.
RIPLEY: Amplifying the power of disinformation and not just in Chinese.
UNIDENTIFIED MALE: Staged by the Filipino side --
RIPLEY: Chinese state media is using AI enhanced videos on TikTok, altering the reporters' voice and face. A disclosure on screen for just a few
seconds. Easy to miss.
UNIDENTIFIED FEMALE: The Chinese jurisdiction.
RIPLEY: The videos pushing Beijing's narrative on the South China Sea.
Is this a threat to democracy?
FELIPE SALVOSA II, JOURNALISM PROFESSOR, UNIVERSITY OF SANTO TOMAS: Most definitely. I think China has found a more cost effective way to get its
message across.
RIPLEY: Turning today's digital landscape into a battleground for truth where seeing is no longer believing.
Will Ripley, CNN, Taipei.
(END VIDEOTAPE)
QUEST: Now I need to just clarify of course. I'm talking about Nvidia where the stock prices up from 4 percent or something. The actual stock split was
a 4-for-1 stock split back in 2021.
Now not too many big major companies are doing stock splits these days. They're letting the share price rise up. But Nvidia did a 4-for-1 in 2021
and now apparently is doing a 10-for-1 because the stock price is essentially at $1,000 a share. Interesting.
[16:35:08]
Economic news and British inflation fell to the lowest rate in nearly three years on the same day the prime minister announced an election. CPI rose
2.3 percent. Economists had expected a sharper fall. The U.K. and global economies continue to face price pressures.
Stubborn is food prices and the cost of this -- only the graph, there you'll see that, but the cost of this, a real beauty, has jumped more than
40 percent in the past year. It's olive oil. It's fueled by climate change, which is worse in olive crops. It's forced the cost of staples higher.
I looked at how important olive oil is of course when I spoke to the CEO of the Italian foods company called Colavita just a couple of years ago.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: You can see how that sauce is getting very creamy.
QUEST: And richer. And I can feel my arteries.
UNIDENTIFIED MALE: Now, and --
QUEST: Put the olive oil.
UNIDENTIFIED MALE: Olive oil balances that.
QUEST: Olive oil -- that's what I was --
UNIDENTIFIED MALE: Got to live healthy.
QUEST: I'm just about to say exactly that.
UNIDENTIFIED MALE: I do want to say it.
UNIDENTIFIED MALE: Heart healthy. I said it, Giovanni, it's OK.
(END VIDEO CLIP)
QUEST: Olive oil is healthy. No, my arteries didn't clog.
Giovanni Colavita is the CEO of the company, which is run by his family for generations. He's with me now.
Sir, why is olive oil now up 60 percent, 70 percent, 80 percent?
GIOVANNI COLAVITA, CEO, COLAVITA USA: I would call a perfect storm. So basically, the last two years, we had the significant drought in Spain,
which is the number one country for production followed by Italy and Greece. And Italy and Greece could not compensate the lack of production in
Spain. The inflation that was happening during this period. And the rising demand of olive oil in the country. The consumer in the States is becoming
more and more aware of the benefit and appreciates more and more the taste of olive oil. So those three together are causing the lack of product
availability.
QUEST: Right. OK, so the price is going up essentially, the crops not good, the weather is not good. And, but demand is also high. So are you finding
you simply can't supply enough?
COLAVITA: Yes. Basically, the production cannot -- this year we are in a situation where we think that we won't have enough product to cover until
the end of the -- until the next season, which basically at the end of October, beginning of November. So it can be a shortage of product.
QUEST: If that's the case, are you having to pay more for the producers? I mean, when you go out and buy the raw olives or the olive oil, whatever it
is, your raw material. Are you having to pay more for that to farmers?
COLAVITA: Yes. We work with producers as you're saying. And basically it's a matter of demand and offer so that's the rule of every market and in
olive oil as well. So yes, the answer is, we need to pay -- we have to pay more. And the question is that I'm sure the consumer has, is this going to
revert? Yes, it's going to revert. We expect a good crop for next season. How much it's going to revert will depend again from availability of
product for next year.
QUEST: So as the price has gone up, but from the producer to you, and you and I have talked before, margins are not high on this stuff to begin with.
So are you able to -- I mean, can you eat any pardon the pun? Are you able to eat any of that gain or are you passing the entire price rise onto the
consumer?
COLAVITA: No, what we're trying to do in this, we're actually investing during this period, trying to alleviate for the consumer the effect of the
price increase. We have the leader of the premium segment. At the same time, we don't want the consumer to leave the olive oil to go to
alternatives which have not really what we want. It's not the only the alternative we want because it won't have the same benefit, won't have the
same taste profile.
So we want the consumer to stay and we're trying to invest to protect and to reduce as much as possible the expense.
QUEST: I was staggered when I heard, and apparently I'm the only one who didn't know that olive oil prices have gone up so much. Everybody else in
the grocery shops seems to know, but you are, just finally, you are expecting it will come down next year because you think there's going to be
a better crop. Well, you can never know with the weather.
COLAVITA: Yes, it's Mother Nature. So we expect that. We're going to see now the flowering looks promising, but we love to see.
QUEST: The flowering. Thank you very much, by the way, for the bottle, which I shall sort of generously keep to myself.
I'm grateful to you, sir. Thank you very much, indeed. Thank you.
COLAVITA: Thank you very much.
QUEST: Now, Wall Street turned lower.
[16:40:02]
The reason, the Fed minutes came down -- came out. So the Fed minutes basically said that there were several members of the committee, the Fed
had doubts about how long it might take for inflation to get back to target. Also, the Fed said there were several people who actually said they
wouldn't be against an increase in Fed -- in rates if that became necessary. The triple stock shows again the way in which it all moved. The
best -- well, the actual, the Nasdaq did the best of them all.
And so did Nvidia, the company has just reported record Q1 revenue and has plans for a 10-for-1 forward stock split. That's huge by the way. 10-for-1
is massive for a stock that's in the news that would take the share price down as you see. Let's say you got to 1,000. The stock price drops to 100.
Now in strict theory, you and I have talked about this before. In strict theory a stock split is absolutely neutral in terms of the future direction
of the stock. Absolutely neutral because all you're doing is taking the same number of stocks and dividing the share price and splitting them out.
But the reality particularly with something like Nvidia is that it will get back to where it was in fairly short order and you'll see that -- I'm just
going to try and see if I can see well.
The stock split that took place, I can't see what the price was. It was about 185, the stock split round about that sort of price. And at that
moment you then get to see how the share price has risen since.
So I would expect after the stock price, after the split, you're going to see quite a lot of activity once again in Nvidia.
Plenty there for us to talk about. Exciting days. So glad that we're together to chew over the world economics business. The lot.
And that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest in New York. Whatever you're up to in the hours ahead, I hope it's profitable.
"MARKETPLACE EUROPE" in just a moment.
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