US: Congress to debate $700bn financial bailout

By just-drinks.com editorial team | 29 September 2008

A $700bn government bailout designed to prop up financial markets is vital for the US business climate, president George W Bush has said ahead of a crucial vote in Congress.

A deal on the aid package was agreed in principle by Republican and Democrat leaders at the weekend, but must be cleared by Congress.

It comes amid fears that the worst meltdown on Wall Street since the great market crash of 1929 will begin to hit consumers' pockets more heavily, as banks cut back on lending, unemployment grows and house re-posessions increase.

Bush said today (29 September) that the bailout, to be funded by US taxpayers, was an "extraordinary agreement for an extraordinary problem".

He assured the market that help was at hand: "We will help re-start the flow of credit...so American businesses can make purchases, ship goods and meet their pay rolls."

Drinks firms have become increasingly cautious about the economic climate. Two weeks ago, French wine & spirits giant Pernod Ricard warned for the first time that a "serious deterioration" in the business climate could damage growth in the next 12 months.

It said last week that spirits sales were holding up in the US, but noted a shift from the on-trade to drinking at home.

Sectors: Beer & cider, Soft drinks, Spirits, Water, Wine

Companies: Pernod, Ricard