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HSBC France retail bank sold to US fund Cerberus

After more than two years HSBC transferred on Monday for an undisclosed amount its retail banking network in France to My Money Group, controlled by US private equity fund Cerberus.

Published: 1 January 2024 13:05 CET

FRANCE-POLITICS-PROTEST

People at work to build a wooden wall aimed at protecting the shop window of a HSBC agency, on December 7th, 2018 on the Champs-Elysees in Paris. Photo by: Alain JOCARD / AFP

The operation will see HSBC France’s nearly 250 retail branches with their 800,000 clients and 3,500 staff become CCF, a brand that HSBC shelved when it began operations in France some two decades ago.

The move is part of London-headquarters HSBC’s efforts to simplify and refocus operations on its major region of Asia.

When announcing the planned sale in June 2021, HSBC said the transfer for a nominal one euro would see it incur a hefty charge.

But the rise in global interest rates complicated negotiations, with HSBC finally booking a charge of $2.4 billion against third quarter 2022 over the French unit.

The terms of the final deal were not disclosed.

In a statement released Monday the groups said CCF would seek to cater to professionals.

My Money Group traces its history in France back more than a century, originally helping people finance their purchases of Citroen cars, then spending two decades under General Electric’s control before the US conglomerate pulled out of finance activities. Cerberus acquired the group in 2018.

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Perrier problems: What’s going on with French mineral water?

The French love bottled water. They spent an estimated €2.5 billion and drank an average of 145 bottles each of the stuff in 2023.

The country is both the world’s biggest exporter of bottled water and the home of its most famous brands from Volvic to Evian, Vittel to Perrier.

But all is far from well in the highly lucrative bottled water market.

In January, it was reported that a third of French mineral water brands received treatments which are banned for the supposedly ‘natural’ products and, in April, France’s health watchdog demanded a clampdown at Nestlé water sites after traces of “faecal” contamination were found.

Meanwhile drought conditions last year raised concerns about overproduction of bottled water in France, with companies exempted from water restrictions that everyone else faced.

Perrier problems

Now, it has emerged that Nestlé has halted production of one-litre bottles of Perrier water at its facility in Vergèze, in the Gard département in south-west France, according to Le Monde and Radio France.

After learning in April that one of the plant’s wells had been shut down following a ‘contamination episode’ after flooding caused by Storm Monica, the investigation has found that two more wells have recently undergone disinfection operations – which the Nestlé group said was a ‘regular maintenance operation’.

Following the April contamination warning, State authorities ordered the destruction of a batch of at least two million bottles of Perrier. The final number of destroyed bottles was around 2.9 million, according to Nestlé group’s own estimates.

Officials, including members of the Occitanie regional health authority, visited the Vergèze facility on May 30th to inspect the plant, boreholes and water quality monitoring laboratory. The findings of this inspection have not yet been made public.

But of seven wells used to produce Perrier brand fizzy mineral water, most are currently out of service, the investigation found – prompting production of the famous one-litre green bottles of Perrier water to be halted until at least the end of summer.

A préfectural decree means the company can draw water from two boreholes to produce a drink called Maison Perrier, which will not have ‘natural mineral water’ status.

Water conditions

The risk to water quality is not confined to the Vergèze operation. Safety concerns have been known by health authorities for years in the Vosges region where the Hépar, Contrex and Vittel brands are drawn, the investigation found, citing a confidential report in which officials expressed concern about the withdrawal of illicit treatments, which could “expose consumers to a health risk, as the treatments were put in place to compensate for a quality defect in the resource”.

In June 2023, in a letter sent to food safety watchdog the Agence nationale de sécurité sanitaire alimentaire nationale (Anses), the director of Occitanie’s regional health authority referred to “regular bacteriological contamination of raw water in at least five of the seven drilling”.

In October of the same year, Anses alerted the government of an “insufficient level of confidence” to ensure “the health quality of finished products”.

Nestlé’s response

Nestlé said that it had initiated a plan to transform its factories, in agreement with authorities. “We have invested significantly, and will continue to do so, to protect this unique heritage and ensure its future,” the group told journalists from Le Monde and Radio France.

But unions are concerned about the future of the plant and its 1,000 employees and have triggered a clause in the Code du travail meaning they will be alerted of “facts likely to affect the economic situation of the company”, amid concerns authorities could order the shutdown of the plant for safety reasons.

So, is bottled water in France safe to drink?

There are two main types of bottled water in France – spring water and mineral water.

Spring water is subject to the same safety regulations as tap water. But it cannot undergo disinfection treatment. Be aware, a single brand of spring water can in fact come from several sources located in different regions, and the composition can change bottle-by-bottle, depending on the origin.

Mineral waters are not subject to the same safety rules as tap water – in fact, some mineral waters would not be allowed in the public drinking water system because they would not meet strict criteria. For example, fluoride levels are limited at 1.5 mg/l for tap water; mineral waters, however, can contain up to 5 mg/l.

Like spring water, mineral water should not be subject to disinfection treatments.

But, on the whole, and despite recent concerns, bottled water in France is safe to drink.

And which one is the cheapest?

Tap water. According to consumer watchdog UFC-Que Choisir it costs €0.003 per litre, on average, or less than €2 per year for a consumption of 1.5 litres of tap water every day.

And it is subjected to all kinds of routine checks – 54 different parameters are monitored pretty much all the time.

6 things to know about tap water in France

If you’re not a fan of the taste, you could always run it through a water filter. It will be more expensive, but still cheaper than bottled water – and still subject to the same number of safety checks, plus it has been filtered.

It’s also better for the planet because tap water doesn’t involve plastic bottles – the city of Paris is currently running a campaign to encourage people to drink tap water in order to reduce waste in the form of plastic bottles. The city has hundreds of drinking water fountains and businesses that display the L’Eau de Paris’ label will refill your water bottle for free.

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