Rising prices: Companies paid higher prices for tobacco, pickup trucks and pharmaceuticals in July, driving underlying wholesale inflation up by the most in six months. This measure of inflation, which excludes volatile food and energy prices, is known as the core Producer Price Index. It rose 0.4% in July—the biggest increase since January. The overall PPI, which measures all price changes before they reach the consumer, rose 0.2% last month, the Labor Department says. That follows a 0.4% drop in June, the first decline in 17 months. A key reason for the increase in the core index was a 2.8% surge in tobacco prices—the most in more than two years. The PPI has increased 7.2% in the past 12 months. “Modest inflationary pressures are building, although they are likely to recede … over the balance of the year as last year’s energy price surges” taper off, says Steven Wood, an economist at Insight Economics.
On tap: SABMiller, one of the world’s largest brewers, has launched a hostile $10 billion bid for Australian rival Foster’s Group Ltd. after its board rejected a takeover offer. The maker of Miller Lite, Peroni and Grolsch says it is taking the $5.13 per share cash offer, minus any dividend Foster’s chooses to pay out, straight to shareholders and that the offer would be funded by existing resources and new debt. The London-headquartered company says Foster’s had so far declined to consider a similar offer made in June. The Australian brewer says the bid significantly undervalued the company. SABMiller said in June that Foster’s was attractive because it was Australia’s leading brewer, with seven of the top 10 beer brands, and that buying the company was consistent with SABMiller’s strategy to spread globally. It considers Australia an attractive market because of its population growth and economic connections to Asia.
