Brexit now affecting supermarkets?

[e1y1]

Tesco has dropped all 200 of Unilever's brands from store shelves, over a dispute over pricing.

Unilever is blaming Brexit as the reason for wanting a 10% price increase for supply of it's products.

Whereas, MPs are saying Unilever are just using Brexit as a smokescreen to raise prices.

Unilever own some of the biggest brands in the UK - Persil, PG Tips, Dove, Hellmans etc.

And with Tesco's being the UKs biggest supermarket chain, this can't be good (other supermarkets have also said they would drop the brands as opposed to absorbing a price hike).

Do you think Brexit is really now affecting our supermarket shelves?

Sorry for the source (but would imagine it's in others too as heard it on the radio) HERE

[Akire]

Sounds like Tescos are being pain in the ass. They have buying power so not paying? If they buy from Europe and it's now more what's problem?

Supermarkets constantly move prices anyway it would be hard to tell. Unless of course tescos don't want this coming out of their profits.

It's going do damage long term to have empty shelves surely they just have to pay what it costs. Not like just doubled price for no reason

[Brokenbiscuit]

I don't know a great deal about unilever, but I'd have thought that the falling value of the pound is very likely to push prices up. Indeed, it would be surprising in many ways if we didn't see supermarket prices starting to rise.

On the other hand, I guess the low pound will be good for British exports.

[HelenaDove]

No strawberries or raspberries at all in our local Tesco yesterday. I know its got nothing to do with Unilever but ive noticed shortages on other things.

[cricketballs]

Given Tesco's bullying antics when it comes to suppliers I applaud Unilever for standing firm

[WamBamThankYouMaam]

It's happening with smaller manufacturers too. Basically, the cost of raw materials has increased a lot in a short space of time. In a lot of instances, the manufacturer cannot absorb the increase because it would mean producing for a negative profit.

So the distributor (e.g. Tesco) has to take it and either absorb or pass on to end customer.

Also, a company like Unilever will probably produce very little in Britain for export. Theyll produce at other sites in Europe for those markets.

You'll also start seeing more of this next year. Lots of companies bought a reserve of euros when brexit was imminent, which will run out in the next 6 months.

[ProfessorPreciseaBug]

Helena...
That is more likely due to the poor roads interrupting deliveries of perishables..
On Tuesday evening we were stuck in a traffic jam on the road between the channel ports and the midlands. The cars were in the right lane but the left land was solid line of refigerator lorries... All heading north towards the supemarkets main distribution hubs in Beds and surrounds. Many of those deliveries will have failed as drivers ran out of hours and were forced to park up.

[KathArtic]

Helena..also it not the season for the berries - the UK just coming to the end of summer.

[Onthedowns]

Sainsbury's have also said they expect prices to increase in items due to low pound! Nice to see they won't suck up difference! Feel sorry for market traders and independents

[JassyRadlett]

Sainsbury's have also said they expect prices to increase in items due to low pound! Nice to see they won't suck up difference!

Why should they? They're a business, not a charity. For how long would you expect them to 'suck up the difference' and to what level - in contravention of their duty to their shareholders?

[MrsTerryPratchett]

PG Tips and Marmite shortages? They are the only things I ask people to bring from the 🇬🇧 I will have to put up with poutine and coffee.

[GreenandWhite]

That's just how the market works isn't it? This was entirely predictable no matter how much the DM shout Blackmail. It's only the beginning. If it bothers you eat less processed food.

[Ifailed]

As the £ has dropped against the euro & US $ since Brexit, importing anything from the Euro area will cost 14% more - of course prices will go in the shops as we import most of our food.

[Creampastry]

Tesco's are refusing to pay on a hike of 10% on Unilever products, most of which are made in the UK and should not be subject to price fluctuations. So for once Tesco's are doing the right thing

[Brokenbiscuit]

I don't really understand why some people think that the supermarkets should suck up the extra costs instead of passing them on to the consumer. They weren't the ones who voted for this situation, after all.

[Brokenbiscuit]

Cream, even if some of the products are made in the UK, I guess the transportation costs etc will have increased.

[IamWendy]

It also seems to be getting darker earlier! Has brexit stolen summer!?

[Hoppinggreen]

If only there was a way of just charging people who voted FOR Brexit an extra 14% for everything rather than all of us!!!

[topcat2014]

@MrsTerry - you must be in Canada then? I used to eat Poutine when travelling there for work.

To be honest, it cheered me a bit to see Unilever sticking to it's original guns with Tesco. I often feel Tesco is a bit of a malign influence in the economy.

Don't forget three former executives are or have been recently on trial for all sorts of fraud stuff.

[FranHastings]

Of course prices are going to go up. Brexit is going to really hurt. I don't know why people think it won't.

[CeeCeeEnnEss]

Totally agree hopping. We joke at work about a badge or something with 'I did this' on it so they pay the higher prices.

Don't want to start a bunfight, it's lighthearted, we're in this together etc.

Unilever's price increases are unreasonable because they're so blanket applied across all categories of product, even those which have seen decreases in commodity costs of raw materials. I applaud Tesco, and if all other supermarkets did the same then it would send a strong message about protecting the consumers. It would also allow wiggle room for absorbing cost price increases from smaller producers.

[Brokenbiscuit]

Exactly, Fran. It isn't as if we weren't warned....

And yes, Hopping, pity that the extra costs couldn't be passed on only to those who voted for this situation!

[Creampastry]

Marmite - British made with British ingredients. No currency fluctuations yet 10% for brexit?!

[JassyRadlett]

A flat 10% increase suggests that some products' costs have increased more than 10% and others less.

I'd suspect that the packaging and transportation costs are not an insignificant part of the production cost, but it's also possible that Marmite is costing say 5% more but other products are costing 15% more to produce.

Remember too that we're likely to see energy prices rise. That will have a big knock on to consumer prices.

[GreenandWhite]

"If only there was a way of just charging people who voted FOR Brexit an extra 14% for everything rather than all of us!!!" Great idea!!

[Anicechocolatecake]

It hasn't surprised me at all.

I don't think most people have any idea generally just how much of what's in the shops is imported. Long term prices are very much going to go up.