TheChek News Flow

Each country wants to avoid looking weak, and that is raising the risk of a regional war

TEL AVIV—Israel’s military has long followed a clear policy: When enemies hit us, we strike back so hard they won’t do it again. That deterrence is no longer working.

Iran, after launching a massive missile-and-drone attack on Israel over the weekend, is threatening to strike again if Israel retaliates. Lebanese militia Hezbollah fires at Israeli forces almost every day despite frequent poundings by Israel. And Hamas continues to launch rockets at Israel even after being bludgeoned following its Oct. 7 attack, which killed 1,200 people, according to Israeli officials.

With no side willing to compromise for fear of showing weakness and all players seeking greater deterrence, the risk of stumbling into a regional war increases.

“If they continue to exchange blows, it’s a slippery slope to a real escalation,” said Ofer Fridman, a former Israeli officer and scholar of war studies at King’s College London.

Deterrence—the principle that any attack will be met by a far more punishing response—is the foundation of defense for most countries. It has been one of three pillars of Israel’s strategic culture for decades, Fridman said.

If deterrence fails, then Israel relies on early warning of any attack. If both fail, then Israel seeks to rapidly inflict a crushing, even humiliating defeat on the battlefield so that deterrence is restored and the adversary doesn’t dare strike at Israel again—at least for many years.

Before Iran’s attack, Israel threatened a major retaliation if Tehran struck. After Iran launched drones but before its more dangerous ballistic missiles took off, Israeli Prime Minister Benjamin Netanyahu said in a video statement, “Whoever harms us, we will harm them.”

Iran is now using similar terms about potential Israeli retaliation. “The smallest action against Iran’s interests will definitely be met with a severe, extensive and painful response against all its perpetrators,” said Iranian President Ebrahim Raisi.

Iran’s drone-and-missile attack on Israel departed from a yearslong regional military strategy, in which it built up a network of proxy militia groups that have allowed it to strike militarily stronger adversaries, particularly the U.S. and Israel, while minimizing the risk of attacks on Iranian soil.

“We have decided to create a new equation,” said the head of Iran’s Islamic Revolutionary Guard Corps, Maj. Gen. Hossein Salami, on Sunday, adding that any strike on Iran’s interests in the region would be met with direct attacks from Iran.

The attack has now raised the risk of an Israeli response and further cycles of violence between the two countries, military analysts said.

“Iran’s moves are very calculated and choreographed. But at the same time, they’re not risk-free,” said Hamdi Malik, an associate fellow with the Washington Institute for Near East Policy and an expert on Iran’s militia network. “Iran is willing to take some calculated risk.”

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Israel’s deterrence failure became painfully clear on Oct. 7, when it was stunned by an invasion of thousands of militants from Gaza.

Until that morning, the prevailing assessment across Israel’s security and political echelons was that Hamas wasn’t interested in battling with Israel. Netanyahu and security chiefs said Hamas had taken a forceful blow in a 2021 fight and was deterred.

Israel, confident it had defanged Hamas, switched to a policy in which it slowly increased work permits for Gazans. Israel hoped its economic leverage would deter Hamas from further conflict. What Netanyahu and his advisers failed to appreciate was that economics didn’t sway Hamas.

“The basic problem here is we face ideological players,” said Michael Milshtein, a former Israeli intelligence officer for Palestinian affairs.

Hamas is different from Israel’s other enemies, he said, because conventional deterrence doesn’t work with the movement. It is too committed to its goal of defeating Israel, has nurtured a culture of sacrifice for the cause, and has no real space for internal dissent, he added.

“It’s a zero-sum game,” Milshtein said, meaning that either Hamas is fully defeated or will remain a threat. “When you confront such players, you can temporarily buy a calm situation or a more-quiet period, but at the end of the day they have ideological goals and you have no way to escape.”

Fridman said Israel needed to pivot from the idea that it can perpetually deter its enemies.

“Since the establishment of Israel, it’s been moving from one conflict to another, assuming if we beat them hard enough they will stop attacking us,” Fridman said. “It doesn’t work. We need to find a political solution.”

Washington is now advocating a change in Israel’s approach, which could slow escalation. The Biden administration is effectively telling Israel to be satisfied with the security offered by early warning of Iran’s attack, bolstered by cooperation with the U.S., European allies and some Arab countries, and not retaliate.

In Israel, however, there is a strong desire to restore deterrence, not just rely on sharp eyes and a big shield. “Iran crossed a red line,” said Danny Danon, a senior lawmaker from Netanyahu’s Likud party. “I think now the dilemma is how to respond in a way that will not escalate the situation.”

The USA’s world Nos 2 and 3 grandmasters, Fabiano Caruana and Hikaru Nakamura, have launched a late surge as the Candidates in Toronto reaches its final four rounds. The €500k tournament will decide which of its eight contestants challenges China’s Ding Liren for his world title later this year.

Caruana, 31, and Nakamura, 36, have lagged behind the front runners, Russia’s Ian Nepomniachtchi, 33, and India’s 17-year-old Gukesh Dommaraju, for most of the event. 

Caruana was unbeaten, but lacked his usual sharpness, while Nakamura suffered two costly losses to India’s Vidit Gujrathi. 

Monday’s tenth round (of 14) brought crucial victories for the US pair as both won after long, complex, and fluctuating battles. Nakamura defeated Azerbaijan’s Nijat Abasov, while Caruana outplayed France’s Alireza Firouzja in his best strategic style.

The race is close, and is likely to go to the 14th and final round on Sunday, or even to speed tie-breaks on Monday. Games start at 7.30pm BST on all days, and there is free and live coverage with grandmaster and computer commentaries on major chess websites as well as on the official channel.

After 10 rounds (of 14) Nepomniachtchi (Russia) and Gukesh (India) led on 6/10, followed by Praggnanandhaa Rameshbabu (India), Nakamura and Caruana (US) all 5.5, Vidit (India) 5. The leaders played a cagey draw in round 10, after Gukesh chose a defence to the Ruy López 1 e4 e5 2 Nf3 Nc6 3 Bb5 a6 4 Ba4 Nge7 (instead of Nf6).

Tuesday is a rest day, followed by round 11 on Wednesday when the top pairing will be Gukesh v Caruana.

The Women’s Candidates, to find a challenger to the world champion Ju Wenjun, has effectively become China v Russia: Tan Zhongyi and Lei Tingjie (both China) have 6.5/10, ahead of Aleksandra Goryachkina and Kateryna Lagno (both Russia) 5.5. Four other women trail behind.

Tan scored the fastest win of the tournament in round nine when the bottom marker Vaishali Rameshbabu (India) blundered into defeat in just 21 moves. The opening is well worth a look as Tan secured easy equality with an unusual counter to the 2 c3 Sicilian, which is popular in English club chess and online games.

Nepomniachtchi, who won both the 2020-21 and 2022 Candidates, has the remarkable record of having led, alone or jointly, in all 38 rounds of the three events. This time his margin of superiority has been slim and he was unable to win either of his games against the tail-ender from Azerbaijan, Nijat Abasov.

Gukesh, 17, has been the revelation of the Candidates, and is now in serious contention to become the youngest world champion in chess history, a record currently held by Garry Kasparov at age 22. The teenager had been considered an outsider due to his youth and his unstable performances in the months leading up to the event. At the London Classic in December, he finished only third behind England’s Michael Adams. In Toronto his only loss was an unlucky one against Firouzja, where his subsequent despair was captured on video.

Some European governments rebuff calls to designate Revolutionary Guards a terrorist organisation

The EU is drawing up expanded sanctions on Iran’s missile and drone programme in response to the Islamic republic’s attack on Israel, but the UK and European governments are resisting pressure to designate the elite Revolutionary Guards as a terrorist organisation.

A growing majority of EU capitals support the new sanctions, which would target the Iranian networks that supply Iran-backed militant groups across the region, according to four people briefed on the matter.

But some officials are wary of further escalating tensions with moves that target the axis — which includes Hizbollah in Lebanon, Hamas in Gaza, Houthi rebels in Yemen and Iraqi militias — during such a volatile period in the Middle East.

“There’s an understanding we will have to broaden the scope of sanctions against Iran [by] targeting their drone programme . . . [and by] targeting others outside Iran,” said an EU official briefed on the negotiations, adding that it was important to send “a signal” to Tehran.

“Those still against are afraid this could destabilise the relationship with Iran and deprive us of leverage over Tehran,” the official said.

Western governments have been working on a co-ordinated response to Iran’s weekend missile and drone attack against Israel and will discuss their options at this week’s G7 meeting of foreign ministers in Italy. Yet while they are keen to be seen to be taking strong measures, they are also seeking to de-escalate regional tensions and avoid a full-blown regional conflict erupting.

The G7, as well as the EU itself, said after the Iranian attack that it was ready “to take further measures now and in response to further destabilising initiatives”.

Iran, which launched the attack in retaliation for a suspected Israeli strike on its consular building in Damascus this month, is already under hundreds of western sanctions. The new measures would expand on existing curbs against Iranian military supplies to Russia used in its war against Ukraine.

Proscribing the 120,000-strong Revolutionary Guards, the most powerful wing of Iran’s military, as a terrorist organisation would be a more severe response. But European and UK officials are worried that such a move would risk retaliation from Iran, including the potential that Tehran would cut diplomatic ties or target dual-nationals in their countries.

The Netherlands, Sweden and Czech Republic have called for measures directly targeting the Revolutionary Guards, three diplomats said, but that was rebuffed by multiple countries, including Germany and France. EU sanctions require all 27 member states to agree.

German officials say the legal conditions for putting the Revolutionary Guards on the EU terror list have not been fulfilled. In particular, the group has not carried out a terror attack in the EU.

“They’re against ‘turning over the table’,” said the EU official, adding that imposing sanctions on the Revolutionary Guards would be “a declaration of war”.

The Guards operate in parallel to Iran’s conventional army to protect the republic from domestic and foreign threats. Its Quds Force, which is responsible for foreign operations, co-ordinates training and arms with the myriad militant groups Iran backs across the region.

Sanam Vakil, Middle East director at Chatham House, said the European capitals were trying to “tread the line between de-escalation and showing a meaningful response to Iran’s attack”.

“But there’s still debate about the utility of proscription” of the Guards, “as well as the broader impact it could have on security”, Vakil said.

It is unusual for a government to designate another state’s military as a terrorist organisation, although the US gave this designation to the Guards in 2019 under then-president Donald Trump.

Rishi Sunak, prime minister of the UK, which began a review on proscribing the Guards in 2022, said on Monday that the organisation posed a “significant threat to the safety and security of the UK and our allies”.

EU foreign ministers will meet virtually later on Tuesday to discuss the bloc’s response to the crisis. No formal decision on sanctions is likely at that meeting, officials said, and the talks will continue at a meeting of EU leaders in Brussels on Wednesday.

“We’re going to talk about possible sanctions but we’re not going to raise the tension,” said another EU diplomat. “Sanctions beyond drones to include the Revolutionary Guard are completely excluded.”

Christiane Hoffmann, spokesperson for German Chancellor Olaf Scholz, said: “We already have a very comprehensive sanctions regime [on Iran]. We will now consult with our EU partners on whether and in what form the sanctions can be toughened up further.”

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As beauty becomes more crowded, investors are eyeing wellness, particularly supplements and women’s health.

Wellness is the next frontier for beauty investors.

After Unilever snapped up Nutrafol at a supposed $1 billion valuation and Compass Diversified acquired The Honey Pot Co. in a deal with an enterprise value of $380 million, investors are looking for the next opportunities in the category.

The reason? The traditional beauty market has become saturated and exponentially competitive, while the convergence of beauty and wellness is piquing investor interest. In particular, they are said to be eyeing supplements and women’s health at a pace not seen before.

“There’s huge opportunity for M&A in the category,” said Eliza Becker, vice president at VMG Partners, whose portfolio includes Goli supplements and Ancient Nutrition powders.

The trajectory hasn’t gone unnoticed by brands.

“We literally used to get rejections until very recently that were simply because there weren’t enough proven history of exits in the space,” said Nadya Okamoto, founder of period care brand August. “Exits, like we’ve seen with The Honey Pot and Knix, support the overall industry.…We’re able to take that to potential investors and say, ‘This is what multiples have looked like in the space.’”

As for who’s interested, from an acquisition point of view, traditional strategics are on the lookout — as always, including Unilever, which appointed Priya Nair as president of its beauty and well-being division uniting key pillars, encompassing hair care, skin care, prestige beauty, and health and well-being. This follows several key acquisitions over the past several years in the supplement category, such as Nutrafol, Olly, Liquid I.V. and SmartyPants Vitamins.

There are newish players on the hunt, too. The recent pharmaceutical spin offs, like Haleon from GSK and Kenvue from Johnson & Johnson, are expected to play a key role, and private equity is also understood to be actively pursuing the category.

Then there are international strategics, particularly those based in Asia, who want a deeper footprint in the U.S. market, as well as players out of the left field. Take New York-based Forum Brands, a one time Amazon aggregator, which bought Lola, a period care brand, in January 2024.

“Both strategic and private equity investors are actively participating in the category, but we are seeing a lot of private equity activity given early stage growth, consolidation and services components to many of these businesses,” said Sasha Radic, managing director at Jefferies.

For private equity, the scalability of some of these brands is incredibly attractive.

Lisa Wu, partner at Norwest Venture Partners, which has invested in supplement brand Ritual, said: “[Buyers are] looking for brand. They’re looking for scale. They’re looking for recurring and resilient demand.”

When it comes to hot targets, supplements and women’s health, which both drive repeat purchases, are at the top of investors’ wish lists.

Ritual, which taps heavily into women’s health and has raised $65 million to date, is understood to be garnering interest and could be ripe for purchase. The brand is available at Target and Whole Foods and has formulas for many of the top concerns identified across women’s health, including pre- and post-natal.

Similarly, Seed, a microbiome health company known for its DS-01 Daily Synbiotic ingestible, is said to be in the market with Jefferies managing the deal, though both parties declined to comment. According to sources, the gut health arena, which Seed plays in, is going to be of particular interest going forward. A report from Mintel predicts that the U.S. digestive health market will reach $6.5 billion by 2027.

Other supplement names to watch include the adaptogenic beauty and wellness company Moon Juice and vitamin line Hum Nutrition, both of which have secured funding in the past and have significant retail footprints.

Concurrently, women’s health has become especially buzzy, as brands are aiming to close the research gap in the category. According to McKinsey, investments that address the gap in women’s health “could boost the global economy by at least $1 trillion annually by 2040.” The category is inherently broad, though hot areas at the moment include period care, vaginal health, fertility solutions and maternal and pre- and post-natal offerings.

According to sources, it’s early days, but potential targets in the future include cycle syncing brand Rael, which raised $35 million in 2022; supplement and personal care brand Love Wellness, created by Lo Bosworth and now sold at Target, Walmart and Ulta Beauty, and ingestible women’s health line OPositiv, also available at Target.

In terms of menopause, experts predict an eventual wave of new product innovation, especially as new research comes out, that will expand the category, which has been slow in terms of sales. Additionally, as Millennials age into the category, the discourse will grow in a way that translates to sales.

“There’s going to be this groundswell of Millennials who are turning 40 and they’re not going to be OK with the status quo, where everyone kind of just suffered in silence, because they are finding more education online to feel empowered,” Wu said.

Brands like Womaness and Bonafide are dominating the conversation when it comes to menopausal health, while other supplement brands, like OPositiv and Hum Nutrition, are tapping into it with one-off products.

Again, product diversity will be essential, as Bonafide had leading to its $425 million acquisition by Pharmavite. Experts suggest those exploring women’s health more broadly rather than menopause alone could be more successful.

“In order to build scale, you do want to build a woman’s health platform,” Wu said.

There’s also sexual wellness and while the conversation around this category is ramping up, sales have been a bit slower.

“Devices are probably less interesting because that’s a one time sale,” said Jeffrey Barber, managing director at private equity firm TA.

Therefore, experts say sexual wellness brands tapping into routine products, like lubricants and supplements, could have a better chance in the market. For example, Maude, one of the most talked about brands in the category, has seen success in retail, particularly at Sephora, with its line of topical products including lubricant and body wash. Other players in the category that have both devices and topicals include Smile Makers and Dame.

Whatever category they choose, one thing is certain: investors are starting to make early bets on the overall sector’s future.

“There’s going to be this one seminal moment where all of a sudden, these categories are massive in the span of two or three years….It takes a long time to build categories,” Becker said.

But as the wellness market grows and investors become increasingly interested in the category, brands will have to stand out, most notably through scientific evidence per experts.

“Strategics want to see the clinical trials on the actual products in order to show differentiation,” said Wu, adding that efficacy will be the key element for both consumers and investors.