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Pound falls below $1.22 as Brexit sparks Marmite price row – business live Pound falls to $1.22 as Brexit sparks Marmite price row – business live
(35 minutes later)
1.11pm BST
13:11
We could get an explosion of rows between retailers and suppliers over price hikes early next year, reckons Markus Kuger of Dun & Bradstreet, the credit and risk firm.
He says UK firms are on “high alert”, and need to assess the impact of the weaker poudn on their customers and supplier now.
Companies, and particularly retailers, will be keen to reach the end of the year with little or no price increase. What happens in the new year is yet to be seen: Article 50 is likely to be invoked, and consumers will likely begin to feel the impact of the falling value of the pound.
12.37pm BST12.37pm BST
12:3712:37
Money transfer firm AFEX has cut its forecast for the pound, as the push towards Brexit continues.Money transfer firm AFEX has cut its forecast for the pound, as the push towards Brexit continues.
Analyst Trevor Charsley reckons sterling will lose another 5% over the next five months, even if a legal challenge launched today succeeds.Analyst Trevor Charsley reckons sterling will lose another 5% over the next five months, even if a legal challenge launched today succeeds.
“Sterling is going to remain under severe pressure in the near term as it continues to act as the release valve for market sentiment over the Brexit process. At the moment, the UK government is facing a legal challenge over parliamentary approval for Brexit.“Sterling is going to remain under severe pressure in the near term as it continues to act as the release valve for market sentiment over the Brexit process. At the moment, the UK government is facing a legal challenge over parliamentary approval for Brexit.
If the government loses in the high court, there will be pandemonium and the possible start of a constitutional crisis while if it wins, the ‘hard’ Brexit course will be pursued and we’ve already seen what the market thinks of that. Either way it’s a lose-lose for sterling.If the government loses in the high court, there will be pandemonium and the possible start of a constitutional crisis while if it wins, the ‘hard’ Brexit course will be pursued and we’ve already seen what the market thinks of that. Either way it’s a lose-lose for sterling.
We think that we could see Sterling reach $1.15 against the Dollar by the end of Q1 2017.”We think that we could see Sterling reach $1.15 against the Dollar by the end of Q1 2017.”
UpdatedUpdated
at 12.38pm BSTat 12.38pm BST
12.05pm BST12.05pm BST
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Prime minister Theresa May’s spokeswoman has confirmed that the government aren’t taking sides between Tesco and Unilever.Prime minister Theresa May’s spokeswoman has confirmed that the government aren’t taking sides between Tesco and Unilever.
“It is a decision for companies how they market and sell their products ... It is a commercial decision.”“It is a decision for companies how they market and sell their products ... It is a commercial decision.”
11.53am BST11.53am BST
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Conservative backbench MP David Davies* has launched a one-man Marmite boycott.Conservative backbench MP David Davies* has launched a one-man Marmite boycott.
So Unilever using Marmite prices to punish us for Brexit. toast-spread fight back starts here. From now on It's Aussie made Vegemite for me. pic.twitter.com/vHHxNeoloySo Unilever using Marmite prices to punish us for Brexit. toast-spread fight back starts here. From now on It's Aussie made Vegemite for me. pic.twitter.com/vHHxNeoloy
* - Not to be confused with David Davis, the Brexit secretary, whose views on yeast-based spreads are unknown* - Not to be confused with David Davis, the Brexit secretary, whose views on yeast-based spreads are unknown
11.51am BST11.51am BST
11:5111:51
Wise words from the Bishop of Burnley:Wise words from the Bishop of Burnley:
The real story here is not Tesco v Unilever but rising food prices and impact on the poor. Let's hope the food banks are Brexit-ready.The real story here is not Tesco v Unilever but rising food prices and impact on the poor. Let's hope the food banks are Brexit-ready.
Is the disappearance of Marmite from Tescos really more important than the laying-waste of Aleppo?Is the disappearance of Marmite from Tescos really more important than the laying-waste of Aleppo?
Here’s our latest piece on the atrocities taking place in Syria’s second-largest city:Here’s our latest piece on the atrocities taking place in Syria’s second-largest city:
Ground down by savagery – the agony of AleppoGround down by savagery – the agony of Aleppo
11.33am BST11.33am BST
11:3311:33
Professor Andrew Fearne, of the University of East Anglia’s Norwich Business School also expects more Brexit price rows.Professor Andrew Fearne, of the University of East Anglia’s Norwich Business School also expects more Brexit price rows.
The price dispute between Tesco and Unilever is the first of many stand-offs that are inevitable as the implications of Brexit kick in and companies try to navigate a sustainable way forward.The price dispute between Tesco and Unilever is the first of many stand-offs that are inevitable as the implications of Brexit kick in and companies try to navigate a sustainable way forward.
The problem is that some companies will use the exchange rate as a vehicle for negotiating price rises that are a) avoidable and b) could leave some of their customers un-competitive, if they agree to pay more when others refuse.The problem is that some companies will use the exchange rate as a vehicle for negotiating price rises that are a) avoidable and b) could leave some of their customers un-competitive, if they agree to pay more when others refuse.
11.03am BST11.03am BST
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The government isn’t keen to be dragged into the Tesco-Unilever Brexit price battle:The government isn’t keen to be dragged into the Tesco-Unilever Brexit price battle:
*Breaking*Leader of House David Lidington: "it's not for the Government to intervene" in dispute between 2 commercial companies.#Marmite*Breaking*Leader of House David Lidington: "it's not for the Government to intervene" in dispute between 2 commercial companies.#Marmite
However, Lidlington may smell a Marmite-scented rat:However, Lidlington may smell a Marmite-scented rat:
BREAK David Lidington, Cabinet minister tells MPs: "The ingredients (of Marmite) are not imported but are manufactured and supplied here."BREAK David Lidington, Cabinet minister tells MPs: "The ingredients (of Marmite) are not imported but are manufactured and supplied here."
UpdatedUpdated
at 11.16am BSTat 11.16am BST
10.57am BST10.57am BST
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High street chain WH Smith has revealed that it is also facing a hit from the slide in sterling.High street chain WH Smith has revealed that it is also facing a hit from the slide in sterling.
The company took out a hedge against a stronger dollar, but it runs out next year, meaning imported stationary will cost more.The company took out a hedge against a stronger dollar, but it runs out next year, meaning imported stationary will cost more.
CEO Stephen Clarke says Smiths is hoping to negotiate better prices from suppliers, and squeeze costs where possible.CEO Stephen Clarke says Smiths is hoping to negotiate better prices from suppliers, and squeeze costs where possible.
“Since June 24, we have been talking to our suppliers and factories, looking at how we can reduce cost that might come through by consolidation of factories or through other productivity initiatives.”“Since June 24, we have been talking to our suppliers and factories, looking at how we can reduce cost that might come through by consolidation of factories or through other productivity initiatives.”
10.48am BST10.48am BST
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The government responds....The government responds....
David Lidington tries to calm fears of marmite shortage - reassures Jeremy Corbyn there is a "wealth" of organic alternatives in IslingtonDavid Lidington tries to calm fears of marmite shortage - reassures Jeremy Corbyn there is a "wealth" of organic alternatives in Islington
UpdatedUpdated
at 11.02am BSTat 11.02am BST
10.46am BST10.46am BST
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The Marmite crisis has spread to the House of Commons, with shadow leader of the House Valerie Vaz raising the issue:The Marmite crisis has spread to the House of Commons, with shadow leader of the House Valerie Vaz raising the issue:
FINALLY THE ACTION WE NEED: Labour's Valerie Vaz demands the Govt does everything it can to keep Marmite on supermarket shelves.FINALLY THE ACTION WE NEED: Labour's Valerie Vaz demands the Govt does everything it can to keep Marmite on supermarket shelves.
That didn't take long - Valerie Vaz mentions the national marmite shortage in the Commons. Says "first week back and there's a crisis..."That didn't take long - Valerie Vaz mentions the national marmite shortage in the Commons. Says "first week back and there's a crisis..."
UpdatedUpdated
at 10.46am BSTat 10.46am BST
10.34am BST10.34am BST
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The Breaking View’s team at Reuters reckon that Tesco has the upper hand in the Brexit price war.The Breaking View’s team at Reuters reckon that Tesco has the upper hand in the Brexit price war.
The maker of Dove soap wants supermarkets like Tesco to pay more for its goods as the pound weakens. They can’t easily pass that cost on to shoppers.The maker of Dove soap wants supermarkets like Tesco to pay more for its goods as the pound weakens. They can’t easily pass that cost on to shoppers.
Grocers have two reasons to play tough: Unilever’s 15% operating margin, and their access to the consumer.Grocers have two reasons to play tough: Unilever’s 15% operating margin, and their access to the consumer.
10.21am BST10.21am BST
10:2110:21
Expert: More Brexit price rows are comingExpert: More Brexit price rows are coming
There’s a serious risk that more suppliers and retailers will clash over price rises in the months ahead.There’s a serious risk that more suppliers and retailers will clash over price rises in the months ahead.
That’s because the financial safety measures that some companies took, to insulate themselves from a sterling crash, would typically only last a few months.That’s because the financial safety measures that some companies took, to insulate themselves from a sterling crash, would typically only last a few months.
Roy Williams, managing director of supply chain firm, Vendigital, explains:Roy Williams, managing director of supply chain firm, Vendigital, explains:
“More disputes over prices are likely in the coming months, as many of the currency hedges that suppliers put in place to protect them from exchange rate changes, start to run out. Ultimately, the effect of these cost increases will be felt by consumers.”“More disputes over prices are likely in the coming months, as many of the currency hedges that suppliers put in place to protect them from exchange rate changes, start to run out. Ultimately, the effect of these cost increases will be felt by consumers.”
Williams also has some sympathy for Unilever:Williams also has some sympathy for Unilever:
“Anyone that thinks Unilever is just trying it on, are wrong. The cost pressures facing many UK suppliers are very real at the moment. Deep falls in the value of the pound since the EU referendum are cutting deeply.“Anyone that thinks Unilever is just trying it on, are wrong. The cost pressures facing many UK suppliers are very real at the moment. Deep falls in the value of the pound since the EU referendum are cutting deeply.
“However, Unilever may not have thought its position through carefully enough. Pursuing across-the-board price increases from customers is a blunt attempt to offset rising costs and this kind of approach would not stand up to detailed cost analysis by Tesco.“However, Unilever may not have thought its position through carefully enough. Pursuing across-the-board price increases from customers is a blunt attempt to offset rising costs and this kind of approach would not stand up to detailed cost analysis by Tesco.
UpdatedUpdated
at 11.13am BSTat 11.13am BST
10.14am BST10.14am BST
10:1410:14
A handy list of what’s at stake:A handy list of what’s at stake:
Tesco products at risk:MarmitePot NoodleBen & Jerry'sComfort conditionerHellmann’s mayoKnorr cubesPersilDove Colman’s mustardTesco products at risk:MarmitePot NoodleBen & Jerry'sComfort conditionerHellmann’s mayoKnorr cubesPersilDove Colman’s mustard
10.08am BST10.08am BST
10:0810:08
Bernstein analyst Bruno Monteyne reckons Tesco would typically hold one to two-week’s worth of stock. So it might avoid serious shortages in stores, if it can kiss and make up with Unilever quickly.Bernstein analyst Bruno Monteyne reckons Tesco would typically hold one to two-week’s worth of stock. So it might avoid serious shortages in stores, if it can kiss and make up with Unilever quickly.
Monteyne adds:Monteyne adds:
“While politicians can deny reality, a shampoo produced on the continent is now 17 percent more expensive.“While politicians can deny reality, a shampoo produced on the continent is now 17 percent more expensive.
This isn’t about Tesco or Unilever but about all UK retailers and suppliers.”This isn’t about Tesco or Unilever but about all UK retailers and suppliers.”
9.58am BST9.58am BST
09:5809:58
The pound has dipped by 0.25% against the euro this morning, to €1.106.The pound has dipped by 0.25% against the euro this morning, to €1.106.
That means sterling has shed more than 15% against the single currency since June’s referendum (when one pound bought you €1.30).That means sterling has shed more than 15% against the single currency since June’s referendum (when one pound bought you €1.30).
That has a serious knock-on effect on a company, such as Unilever, which reports its financial results in euros.That has a serious knock-on effect on a company, such as Unilever, which reports its financial results in euros.
UpdatedUpdated
at 9.59am BSTat 9.59am BST
9.50am BST9.50am BST
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Tesco runs short on Marmite and other Unilever goods: share your photosTesco runs short on Marmite and other Unilever goods: share your photos
Is your local Tesco out of Marmite? What about Persil, Surf, Dove, Comfort, Ben & Jerry’s ice cream, Elmlea, Colman’s, Helmann’s, Knorr, Bertolli, Flora, Comfort and Pot Noodle?Guardian Witness want to know if the row between Tesco and Unilever is causing problems in the aisles.Is your local Tesco out of Marmite? What about Persil, Surf, Dove, Comfort, Ben & Jerry’s ice cream, Elmlea, Colman’s, Helmann’s, Knorr, Bertolli, Flora, Comfort and Pot Noodle?Guardian Witness want to know if the row between Tesco and Unilever is causing problems in the aisles.
Has there been a run on marmite and other staples in your local supermarket? Share your photos of empty shelves with us - we’ll post a selection of them in the blog.Has there been a run on marmite and other staples in your local supermarket? Share your photos of empty shelves with us - we’ll post a selection of them in the blog.
9.40am BST9.40am BST
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Today’s selloff is pushing the pound close to the levels hit on Tuesday evening, when sterling suffered quite a wobble.Today’s selloff is pushing the pound close to the levels hit on Tuesday evening, when sterling suffered quite a wobble.
It’s currently trading at $1.216, down 17% since June’s referendum.It’s currently trading at $1.216, down 17% since June’s referendum.
9.22am BST9.22am BST
09:2209:22
Conservative MP Sir Gerald Howarth has warned Unilever not to try to profiteer from the slump in sterling.Conservative MP Sir Gerald Howarth has warned Unilever not to try to profiteer from the slump in sterling.
He said the firms’s reputation would be damaged “if they seek to use the fall in the pound to exploit the consumer”.He said the firms’s reputation would be damaged “if they seek to use the fall in the pound to exploit the consumer”.
(that’s via the Press Association)(that’s via the Press Association)
9.18am BST9.18am BST
09:1809:18
The sight of Pot Noodles, PG Tips teabags and Knoor stock cubes vanishing from Tesco’s shelves could be the moment when the pound’s vicious tumble hits home to the public.The sight of Pot Noodles, PG Tips teabags and Knoor stock cubes vanishing from Tesco’s shelves could be the moment when the pound’s vicious tumble hits home to the public.
Currency expert Kit Juckes, of French bank Societe Generale, says:Currency expert Kit Juckes, of French bank Societe Generale, says:
Yesterday, the implications of the pound’s fall on prices and retailer margins hit home for the wider public as the country’s leading supermarket engaged in a war over prices with its highest-profile supplier of branded goods.Yesterday, the implications of the pound’s fall on prices and retailer margins hit home for the wider public as the country’s leading supermarket engaged in a war over prices with its highest-profile supplier of branded goods.
Either UK consumers will eat store-branded yeast extract, or they’ll pay more for Marmite, or the impact of the pound’s fall will be shared between supplier and retailer.Either UK consumers will eat store-branded yeast extract, or they’ll pay more for Marmite, or the impact of the pound’s fall will be shared between supplier and retailer.
And other Marmite substitutes are available:And other Marmite substitutes are available:
So this is what sovereignty looks like. #Brexit #Marmite pic.twitter.com/6RMajJ8rwoSo this is what sovereignty looks like. #Brexit #Marmite pic.twitter.com/6RMajJ8rwo