Weak Link in the (Food) Chain?

24:22Felicity Hannah:Let's talk about AI now, because we're talking about growth. And a lot of people think that AI will save us or doom us or, you know, have some sort of impact. And at the start of this week, the governor of the Bank of England, Andrew Bailey, warned that there could be a global economic downturn if there is any collapse in the AI sector. And of course, with rapid growth, there come trade-offs. Antonio Neri, CEO of HPE, which is one of the world's largest suppliers of AI infrastructure, was chatting to Sean on Wake Up to money yesterday. And he told us that the technology driving the AI boom is far, far ahead of any government policy to regulate it.

25:03The reality is that the government needs help from the private sector because they are not equipped to understand all this technology evolution, because the technology in many ways is far ahead of the policy.

25:15Felicity Hannah:Carleen, is that a concern that you have? And does it kind of sit alongside those Andrew Bailey comments that perhaps this is just moving so fast that regulation, that economic risk management can't keep up with it? I would say so. And that has quite a few areas of impact. One is security. So with new models of AI coming out, they're having to sort of almost slow down to give even tech companies time to catch up and make sure that people's systems are and solutions are secure. but earlier every week in my business we have what we call an AI literacy club and what I found fascinating was when I did a poll of everyone who has their own private AI in addition to the ones that we provide co-pilot as a Microsoft partner to everybody they all said that they had their own private AI and then that made me think wow in all the organizations across the UK what data are people putting in there is it the right data you'd want to make sure that there's really good policies and not just that, but understanding about what are we doing with AI and what's the impact on our businesses.

26:22Felicity Hannah:But people are sort of charging into using it, aren't they? And yet, Colleen, we've had this open letter signed by over 100 tech firms, including Google and Microsoft, warning that governments and businesses need to boost their global cyber defences before AI tools get so strong that they can overpower almost anything. Is that something that you look at at Cloud9? Are you considering cybersecurity? Is it a big focus? Oh, absolutely. Yes. And we're probably one of the early adopters of the new ISO AI standard as well, because we just need to be aware of what's the governance that you need to put in place.

26:58Felicity Hannah:And we work with our clients in implementing AI and agents. When you've got autonomous AI working, you just need to be really clear on what data are you surfacing. That's always been an issue, but I think AI is just really accelerating that to the forefront where organisations need to just really think about security of their data and how their team are using that across the business and what access is there. Anna, have we seen that AI build out, that AI investment? Is that behind the quite remarkable at times growth we've seen in global stock markets and particularly in things like the S &P 500?

27:40Felicity Hannah:Yeah, we have seen really significant flows into those AI related stocks, particularly the big hyperscalers. And so now you have quite a relatively small number of companies driving a really quite large share of the market returns. So investors do have to be aware of that. And we would always say, you know, you want to make sure that you're diversified outside that trade as well. So it's important to be aware of that concentration. But you think a lot of investors, a lot of retail investors, they don't necessarily know where they're invested. You know, they're not thinking, oh, I must move my money into this fund or that fund.

28:20Felicity Hannah:They just chuck their money in their pension and hope it's going somewhere safe. Well, I mean, if they're doing that, they are hopefully, they can be doing it in either two ways. They can be investing it themselves, in which case they might have a good knowledge about what's in there. And I think there's been quite a lot of work to try and sort of make it a little bit more obvious what your underlying investments are. If you're paying a professional to do it for you. And a lot of those workplace pensions, they will be managed for the scale of the stage you're at in your life. The underlying asset mix should be quite well diversified, but it will depend.

28:57Felicity Hannah:And you can actually look at your pension, which I'm sure you do every day, Flir. Oh, I mean, naturally, naturally, it's very much my hobby. But I think our listeners may be, well, some of our listeners, I'm sure. George, it's interesting listening to Antonio Neri there, sort of warning that the AI boom is beyond any government's policy to regulate it. I suppose you've got these enormous hyperscaler businesses. You've got your Amazons, your Alphabets, so absolutely massive that it can be really difficult for governments, especially cash strapped governments to regulate. So it's interesting, those hyperscalers in the same saying, you know, don't let us destroy the world.

29:41And in the same breath, they're saying we're better than our competitors and faster. Okay, what we're experiencing is a singularity. I think. Sounds comfortable. Well, yes, it is though. It is. AI has been hypothesized about and considered as an issue for decades. And now it's finally here. And it's changing the world much faster than regulation could ever adapt. So again, it's all a choice. You can be United States, the UK, or China who let the technology run and see what they can do with laws after they hit the snag. or you can be Europe, which tries to regulate something before they even know what it is.

30:27Okay, and you see the growth in the United States and then you see the growth in Europe. It's a choice. It's a choice. But as long as this thing is out there, I don't think that it's prudent to say, oh, I'm going to be the country that regulates it if another country does not. Unfortunately, we're in this arms race. And that means that somebody will need to finish first. It's a geopolitical and geoeconomic arms race, mainly between the United States and China. And somebody is trying to reach the finish line.

31:06Felicity Hannah:So all the businesses that want to be regulated, they want their industry to be regulated. They don't want to regulate themselves because that might hamper their ability to outcompete their competitors. And then you've got the same issue with global governments then, George, wanting this sector to be regulated, but also not wanting to hold back their homegrown talent. Where does that end? Where do arms races end? Let me think historically. No, we're really good, if we're honest. I mean, the space race in the 60s ended with the economic strangulation of the Soviet Union. The arms race in the 1910s ended with World War I.

31:54So there is an arms race towards gaining an advantage over an adversary. OK, it isn't for good purposes. This isn't for the improvement of humanity. So where it ends is probably either the reaffirmation of the present geopolitical and geoeconomic order, should America win, or a change in the geopolitical and geoeconomic order, should China come on top?

32:25Felicity Hannah:I feel like that's quite an Armageddon-y kind of ending to the first half of the programme, but it's always, always very, very interesting. These are important, massive conversations that we have here on Wake Up To Money about AI. But we are now going to be a little bit late to the news. So, Carleen Jackson from Cloud9 Insights, stick around. Anna MacDonald from Hargroves Lansdowne, likewise. George, this is where we let you crack on with your Friday. Thank you so much for being part of Wake Up To Money. Thank you very much. Thank you, George Ligaris there, Chief Economist at Forvis Mazurs. Lots of you getting in touch on all the stuff that we're talking about this morning.

32:58Felicity Hannah:Sue in Portsmouth says, government can provide basics for equality, but it depends on family support to materialise. Somebody who doesn't give their name says, the only thing growing in the UK economy is the cost of welfare. Labour will not address that, so prepare for a huge tax increasing budget. And somebody else who doesn't give their name says, why doesn't the government deal with the elephant in the room and reduce the massive cost of defined public sector pensions? that are unaffordable and unsustainable, hence why the private sector moved out of them. Last year it cost, this person says, more than£54 billion.

33:27Felicity Hannah:Keep your thoughts coming on this, on everything that we're talking about. 85058. September's always busy. Whole Foods Market can help. Their September Stock Up event makes it easy to load your pantry and freezer with flavourful, nourishing food. Even better, there are hundreds of sales. Get dinner going with canned soups and veggies. Lean on frozen pizzas, pastas and seafood everyone loves. Their Build Your Own Family Meals feeds four for just$35. Stock up at Whole Foods Market. How many streaming subscriptions do you have? Is it the same for your business? Avoid it by having all your business on one platform.

34:07Try Odoo for free at odoo.com. That's O-D-O-O dot com. Wake Up to Money with Felicity Hanna.

34:17Felicity Hannah:Good morning. If you're just joining us on Wake Up To Money, we've been having, as I said, quite an Armageddon-y conversation about AI. But we're always here for your thoughts as well. Do get in touch. Do text us on 85058 if you want to join in any of the conversations we're having this morning, including the conversation we're about to have about UK food supply, because the UK's food supply chain is ill-prepared for an increasing number and severity of risks. This is according to a new report from the National Audit Office. It says recent disruptions have shown the resilience of the supply chain, but it's warned that the Department for Environment, Food and Rural Affairs, DEFRA, must work more closely with households, communities and industry to make sure it can withstand the higher number of severe shocks, different kinds of shocks that we're experiencing.

35:08Felicity Hannah:Things like extreme weather events, the risk of cyber attacks, disease outbreaks. Phil Pluck is CEO of Cold Chain Federation. Joins me now. Phil, good morning. Good morning. This is a worrying thing for people to hear, isn't it? People obviously very, very concerned about supply of something as essential, as important as food. Can you just explain to us, is our supply chain fragile? How close are we at any given time to a crisis? We're pretty close to it. There's a difference really between resilience and efficiency. And since the Second World War, what we've really concentrated on in the UK is the efficiency of supply.

35:49So we have something called just in time. And just to give you an idea of how that works, we've got around about 70 million people in this country. And those people now insist on a huge variety of food, around about 30 ,000 different food products. And with those 70 million, we need to have a supply chain that gives them food every single day. and we have in the cold chain we have around about 50 percent of all of the food that you and other consumers consume but that comes to around about 100 million meals that we store or the equivalent of which is an impressive figure but it's not so impressive when you think 70 million people access that food so if you look at things like tins and beans and things like that plus all the fresh and frozen food, we've got around about 200 million meals that are ready to go.

36:44But that's only two days, maybe three days worth of food supply. So we're good at supplying lots of different food. But the resilience for that food, and we've been campaigning with government or to government for some time about this now, the resilience is virtually nil, two to three days worth of food.

37:02Felicity Hannah:So what do you when you say you're campaigning? What is it that you want to change? Well, for the last two to three years, we've been campaigning, particularly with DEFRA, to say, look, there is a real issue here. Because just over the last few years, we can look at global shipping destruction, wars, pandemics, as you mentioned, cyber security or cyber attacks. So the number of threats that are now sitting over our food supply are larger than they ever have been. And at the same time, our food supply is as fragile as it ever has been. So we've been pointing that out to DEFRA to say, look, there are other countries here like Poland, like Finland, like Sweden, like Switzerland, who have got this.

37:52They've worked this one out. But we we need your help and we need your support, government, to get to a position where those countries are already heading to.

38:03Felicity Hannah:So what is it that's needed? Is it more warehouse space, more tins? What sort of practically can be done? Not necessarily more. I mean, if we were to go down the route of let's build more warehouses and fill them with food ready for an emergency, that would be prohibitively expensive and probably very impractical. The reality is that we've got probably the most efficient food storage and food supply system in the world. The sort of numbers I described earlier suggest that we're really good at supplying lots of different food to different places within time. So the real key here is for government to understand how to protect the current food supply system, not necessarily create a new one.

38:54Felicity Hannah:So it's not an issue then that there are 100 million meals and 70 million people. That's not the concern that you have. The concern is that it's not protected enough. That's exactly it. You've hit the nail on the head. And so if we look at recent cyber attacks, we have as an industry been attacked by Russian cyber attackers over the last few years successfully. And if you remember back to last Christmas, there were two major supermarkets that were hit by cyber attacks. And then the supply chain that I represent leading up to those retailers has also been constantly attacked. The reason for that is that the Russian cyber attackers, some of whom are state funded, know that there are pinch points in the food supply system.

39:41The cold chain is one of those. We've only got 460 warehouses storing that 100 million meals or equivalent. So what we're saying to government is work with us to give us your expertise on further cyber protection. Work with us to allow us to access fuel, because I've got 100 ,000 vehicles out there as we speak, delivering food, pharmaceuticals and blood. So work with us to protect that fuel supply for food supply, forgive me. People will be listening to this, though.

40:17Felicity Hannah:Sorry, they'll be sitting there eating their cornflakes, wondering if they should be putting extra boxes in their cupboards. I mean, you talked about the just-in-time supply chain and it is working for the most part, isn't it? We've only really seen supermarket shortages where people have panicked and bulk bought, for example, during COVID. Well, that's an interesting one. So COVID, you're absolutely right. We saw some shelves becoming empty in COVID, but actually what we did was manage to fill those shelves pretty quickly. But you've got to understand that what happened was it was the private sector that filled those shelves.

40:52And that was one pandemic. Now, what we are looking at here is El Nino, global shipping disruption, other pandemics. And so a combination of those means that actually can you just rely on the private sector coming through every single time? And I will say to you, and I represent that private sector, I will say, no, now is the time where we have to do what other countries are doing and work together to protect some of the energy that we use, to protect the fuel, to protect the infrastructure that we operate in. So we're not asking government for more money. What we're saying to government is based on this National Audit Office report, which confirms what we've been saying, let's just work together so that you can understand what we need in order to continue to supply all of that food.

41:44Your question was, should we be stocking? And the answer is that yes, we should. There should be some sensible stocking in each household. And the government in the autumn will be telling all of us to do that.

41:58Felicity Hannah:Phil Pluck, CEO of Coal Chain Federation. Thank you very much indeed for joining us. I've heard a message from Joe in South Yorkshire saying, on food, address the approximately 25 % per household food waste in the UK and help the shortage problem, the purse and the planet. No brainer. Thank you very much indeed for that. Right, from food then to water. The boss of the world's largest water company says her company would consider operating UK water assets if they were brought into public ownership. Veolia employs 15 ,000 people in the UK, works with local authorities and businesses to manage wastewater treatment and energy services.

42:35Felicity Hannah:And the BBC's climate editor, Justin Rowlett, spoke to its chief executive, Estelle Bracklianoff, for Big Boss Interview podcast. And he started off by asking whether she thinks Thames water isn't fit for purpose. I would put it another way around. I think, you know, you have a... It's not for me, it's for really the government to decide what type of model they want for running the water companies in the UK. The actual model is, you know, the assets are owned by the private sector, as well as the assets are run, if you want, by the private sector. A lot of models where the assets are actually owned by the public, it's public ownership and the public, whether it be the government or a specific dedicated regional body of some sort.

43:25But the private sector brings innovation as well as know-how to run them. So in a way, you can have the best of both worlds, in my opinion, when you have, you know, like private sector do what they do well, which is bring innovation. But Veolia is not here specifically to bring money. In a way, we're here to help save money. So Andy Burnham, the new UK prime minister, has said he doesn't think the water industry in the UK is working. And I have to say, I think a lot of the UK public would agree with that. So are you saying, you know, listen, Andy, if you nationalise the assets, if you make the physical assets of the companies a public good, then we, Violi, would be happy to come in and use our expertise to manage them better?

44:13Is that what you're offering? It could be an option, yes. Yes, you know, by running some specific plants. Why not? Some plants, I mean, you know, drinking water units or wastewater treatment plants or network management. That's what we do in some different countries. But again, I am not at all opposing public and private sector. I think the public as in the government or, you know, public bodies are exactly where they should be in deciding what to do. then we're here to provide our expertise and innovation so that we deliver at the best cost possible. And I think, you know, we need both in other terms.

44:53And I think that if the water sector is giving this direction, we'll be very happy to support, again, running in a very efficient way

45:03Felicity Hannah:using the innovation we've developed everywhere. So that was Veolia Chief Executive Estelle Bracklianoff. And you can hear more of that interview and of course others from our Big Boss interview podcast series on BBC Sounds or wherever you get your podcasts. Still with me is Carleen Jackson, Chief Executive of the Digital Consultancy Cloud9 Insight. Carleen, we were talking about AI earlier. Water is a really big part of the AI story, isn't it? And I know that in that interview, she also flagged the growing demand for water from data centres to cool them down. and she said that UK data centres could consume Birmingham and Glasgow's combined water by 2030.

45:44Felicity Hannah:Is that a concern that you have? Well, I'm living in Brighton in the south of England and it's definitely been more sort of like a desert in the landscape here. And in fact, there's sort of a lot of vineyards on the south that are apparently doing better than some of the vineyards in France. But I would say that there's been a lot of press coverage of villages or towns near data centres in the US and how their water supply has been disrupted. And I think that would be concerning. Typically, a lot of the data centres tend to be built further north where there's less cooling needed. And some organisations like Microsoft have even built some underwater data centres.

46:26Felicity Hannah:But I think there needs to be more done to think about where these data centres are located and access to water because that is definitely a consideration. the last thing you need to be doing is diverting some of that water from the farms or local cities. But there are many good case studies where data centres are actually doing good for the locals in terms of providing free heat sources for the local utilities or sort of schools and housing as well in Europe. Thank you very much. Also still with me throughout the programme is Anna MacDonald, Investment Strategy Director at Hargreaves Lansdowne.

47:03Felicity Hannah:I just wanted to briefly touch, Anna, on the latest figures we've had from the British Retail Consortium. It's quite interesting. They show quite sluggish footfall for shops on the high street in August. So overall, footfall was down 1.7 % in August compared to last year. Retail parks did relatively well, but overall, high streets are just clearly struggling a bit. Does it feel like the consumers just kind of not really got back to the shops, is not back spending the way they previously were? Retail parks have actually been really quite good ever since COVID. And I think they've concentrated a lot of flagship stores in them so that there have definitely been some parks that have won out.

47:50Felicity Hannah:But I think back to August, I think pretty hot, some pretty big storms, quite a lot going on. So I think that actually, if you maybe don't feel like walking up and down a high street because you're just too hot, then that might have actually been a bit of a bit of a factor, too. And maybe you head for an air conditioned. Head for an air conditioned retail park or somewhere where it's easy to park and easy to recover. Because we also we did see transport problems as well during during during the real heat waves. And that's also been an issue. Yeah, I know as a vegetarian, I actually spend a lot of time hanging out in the meat aisles at my local supermarket because it was just so beautifully chilled.

48:28Felicity Hannah:So no, I feel that. Speaking of chilled, that was a terrible segue, but it will make sense. The ice hockey team Manchester Storm are about to return to the city's AO Arena for the first time in more than two decades as the sport enjoys a boost in popularity and importantly in income. This weekend is a significant moment for a club with deep roots in Manchester and an almost sold out fixture against Sheffield Steelers on Sunday. There's a new fan base developing rapidly in the UK and it has undeniably been helped along by shows like Netflix's heated rivalry. Just last month, UK Sport announced a record investment of more than£33 million into the UK's Olympic and Paralympic winter sport athletes.

49:15Felicity Hannah:So let's talk to Ryan Finity, who's the owner of Manchester Storm. Ryan, good morning. Good morning. Thanks for having me. A pretty exciting weekend then. Yeah, yeah. What started out as an idea, you know, 16 to 18 months ago about returning to the AO and what that could look like with no infrastructure. And, you know, obviously I'm Canadian. I've been around hockey rinks my whole life, but I've always been playing or managing. and not really building them. And we definitely underestimated the amount of work it takes to put a hockey game on. And we kind of were finding out day by day. But it's been a great journey.

49:58You know, we kind of planned it for really, like I said, 16, I think about 17 months in total. But we didn't actually start working on it where we actually changed the rink over until about two weeks ago. So it's just been lots of lawyers and lots of talking and lots of planning. And then obviously they had a shutdown and then it's time to take, you got that window now to make it to a rink.

50:20Felicity Hannah:See, I'm really curious about that because the last time I was in the AO arena was to see Nick Cave. And that's what I sort of associate that kind of space with. How did you turn it into an ice rink? Yeah, lots of work, obviously. Yeah, it's been a big job. Yeah. And we're working, you know, obviously there was hockey there, you know, 20 some years ago. but the arena has gone under such a transformation. They've invested heavily in their hospitality, and when that happened, a lot of the old infrastructure where it would have sat back in the day is now either an open-style bar or a restaurant. So we've had to kind of transform how they used to do it, which was very challenging on how we get the ice plant and then how we get the glyco run, and then it's got to go under the pad and obviously lots of testing, testing, pressure testings to make sure that the pipes and everything that was there and then replacing those that weren't up this house.

51:19Felicity Hannah:It all sounds very expensive. Is there enough money in ice hockey then now? Well, yeah, I think that's the gamble. We know that there's obviously we've inherited quite an infrastructure cost. you know you're we we understand that that it's you know we knew when we walked in it was going to come at quite an elevated cost it wasn't you know no arenas are just opening their door and spending millions to to bring in hockey we occupy a lot you know we occupy over 30 dates within eight months so it's a it's a major major investment as far as time um from the AO uh to take it out of programming so again we have to we you know it's on us now to prove it we're off to a great start we just set the record uh yeah i think about six or about four o 'clock yesterday we set the attendance record for uh ice hockey and in the elite league so we're kind of closing in on 10 ,000 on sunday um and and again this is kind of what we have to replicate i think the one thing people forget is we play we can play up to 35 times a year at home so there's a lot of events coming and coming.

52:26So our marketing has to stay pretty, pretty strong because you can come to a game Wednesday and then be back at the rink again on a Sunday.

52:33Felicity Hannah:So marketing is one big part of it. What about shows like Heated Rivalry? Are they doing your marketing for you? Yeah, it's crazy. We kind of laugh at the ownership group because we, you know, like anything you strategize and you come up with ways on how we can sell hockey into a, you know, football dominated country. And then the show comes along and does what none of our brains could do in 20 years and all of a sudden we just open it up to a new genre but it it's great but it also I think it I said it before I think a lot of a lot of them came because of that you know they came and wanted to check it out and we we know in in our day in Ultram where we were a little closer to our fan base we had a ton of fans that came because of it and then they came to five four five six more games they became season ticket holders so again we know that when we get eyes on our product I always said you either like hate it and you probably don't last the game or you I absolutely love it and you want to come back.

53:25Felicity Hannah:We're going to have to leave it there. But I bet curling's like, how can we make it sexy? Ryan Finiti, owner of Manchester Storm. Thank you so much. Anna McDonald from Hargroves Lansdowne. Thank you. Carleen Jackson from Cloud9 Insight. Thank you. Thanks to everybody who's been in touch with Wake Up To Money this morning. I always appreciate your messages and your company. That's it for Wake Up To Money. Wake Up To Money from BBC Five Live. That's it from Wake Up To Money. Don't forget to subscribe on BBC Sounds or wherever you get your podcasts. And when you do, we'd love it if you'd leave us a review.

53:57Felicity Hannah:You can also contact us anytime on social media using the hashtag WakeUpToMoney.

54:20And it's the huge one. Jeez. Settle down, tough. I'm sorry. Cricket on Five Live Sport. Oh, I've lived every ball of this. Listen on BBC Sounds.

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55:22And in this new series, we're beginning with an epic voyage through the story of Homer, the Iliad and the Odyssey. And that's with Kyle Smith-Bino joining us. And then we'll be learning about Francis Galton and the racist, discredited pseudoscience of eugenics with Desiree Birch. We'll meet many medieval saints in their bone boxes with Rachel Parrott. So if that sounds like your sort of thing, listen to You're Dead to Me wherever you get your podcasts. Thank you. Bye.