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Pound falls to $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)
4.43pm BST
16:43
There not much support for Unilever in the English town where Marmite is produced.
Nazia Parveen, our North of England correspondent, has paid a flying visit to Burton upon Trent. And she found that many people believe Unilever is pushing its luck by trying to hike prices by 10%.
One resident, 70-year old Dennis, is even planning to boycott Unilever (echoing Tory MP David Davies earlier today).
“Everything about Marmite is local - the workers, the ingredients - so ultimately I do not understand their argument and it is just downright profiteering.
We do like our Marmite as a family, especially our daughter, but we’re now going to boycott their products as we’ve had enough of Unilever holding local businesses and their own workers to ransom.”
Here’s the full story:
Updated
at 4.48pm BST
4.24pm BST
16:24
This photo shows some of the scores of produces which Unilever supplies to UK retailers.
Many of them (unlike Marmite) will be produced abroad or rely on imported raw materials, thus vulnerable to the weaker pound.
4.15pm BST
16:15
Sky News’s Faisal Islam reckons Marmite lovers shouldn’t panic:
Plentiful supplies in this West London Tesco Express... don't want to encourage hoarding .... pic.twitter.com/HgPpqFsNOP
4.06pm BST4.06pm BST
16:0616:06
3.50pm BST3.50pm BST
15:5015:50
Expect New Year price hikesExpect New Year price hikes
Steve Dresser, retail analyst at Grocery Insight, expects retailers to hike prices in January - once the Christmas season is behind them.Steve Dresser, retail analyst at Grocery Insight, expects retailers to hike prices in January - once the Christmas season is behind them.
He says:He says:
“No one wants to put prices up ahead of Christmas. Others may just wait until January.”“No one wants to put prices up ahead of Christmas. Others may just wait until January.”
“It’s only going to get more painful.”“It’s only going to get more painful.”
Dresser also reckons Tesco is winning the PR battle so far, rather than being accused of bullying suppliers.Dresser also reckons Tesco is winning the PR battle so far, rather than being accused of bullying suppliers.
Is remarkable to consider that Tesco have come out well here; fighting price rises - in 2011 with Premier, was more about big bad Tesco.Is remarkable to consider that Tesco have come out well here; fighting price rises - in 2011 with Premier, was more about big bad Tesco.
PR / rebranding efforts are working well it appears.... Fact is no one wants price hikes pre Christmas. But they are coming.....PR / rebranding efforts are working well it appears.... Fact is no one wants price hikes pre Christmas. But they are coming.....
3.39pm BST3.39pm BST
15:3915:39
Media monitoring group Newton Insight report that the Tesco-Unilever spat has created particular interest in London, Scotland and Manchester (three places that voted to stay in the EU...).Media monitoring group Newton Insight report that the Tesco-Unilever spat has created particular interest in London, Scotland and Manchester (three places that voted to stay in the EU...).
And more men than women are opining....And more men than women are opining....
How are the UK's customers responding on social media to the #Unilever and #Marmite price hike? NEWTON Insight looks at the #data. pic.twitter.com/HYoeg9J3PRHow are the UK's customers responding on social media to the #Unilever and #Marmite price hike? NEWTON Insight looks at the #data. pic.twitter.com/HYoeg9J3PR
UpdatedUpdated
at 3.49pm BSTat 3.49pm BST
3.20pm BST3.20pm BST
15:2015:20
This is the defence for Unilever trying to hike the cost of Marmite, even through it’s made in Britain rather than imported.This is the defence for Unilever trying to hike the cost of Marmite, even through it’s made in Britain rather than imported.
Why hard 2 fathom? #Unilever report earnings in € so must hike GBP prices to counter GBP weakness. Doesnt matter if Marmite is made in UK.Why hard 2 fathom? #Unilever report earnings in € so must hike GBP prices to counter GBP weakness. Doesnt matter if Marmite is made in UK.
2.33pm BST2.33pm BST
14:3314:33
Clive Lewis MP, Labour’s Shadow Business Secretary, is also concerned that UK shoppers are going to be hit in the pocket:Clive Lewis MP, Labour’s Shadow Business Secretary, is also concerned that UK shoppers are going to be hit in the pocket:
“Once again the public are paying the price for Tory failure to make any contingency plans for Brexit.“Once again the public are paying the price for Tory failure to make any contingency plans for Brexit.
This is unlikely to stop at a Marmite shortage – more and more retailers are going to be squeezed by higher import prices in the coming months, as hedging contracts end and the cheaper pound starts to squeeze margins.”This is unlikely to stop at a Marmite shortage – more and more retailers are going to be squeezed by higher import prices in the coming months, as hedging contracts end and the cheaper pound starts to squeeze margins.”
2.19pm BST2.19pm BST
14:1914:19
Politics professor Philip Cowley has trawled through some recent polling data, and found that Liberal Democrat voters will be particularly hurt by the Tesco-Unilever standoff.Politics professor Philip Cowley has trawled through some recent polling data, and found that Liberal Democrat voters will be particularly hurt by the Tesco-Unilever standoff.
It's Lib Dems who are hurting most. #Marmite pic.twitter.com/lcD4p1hVwDIt's Lib Dems who are hurting most. #Marmite pic.twitter.com/lcD4p1hVwD
But a jump in poultry prices could cause Theresa May’s party some grief:But a jump in poultry prices could cause Theresa May’s party some grief:
This'll get real if chicken is affected. pic.twitter.com/6QcT0UxhTHThis'll get real if chicken is affected. pic.twitter.com/6QcT0UxhTH
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at 2.19pm BSTat 2.19pm BST
1.59pm BST1.59pm BST
13:5913:59
Labour MP Stephen Kinnock says the Marmite price wars show that Brexiteers’ optimism about leaving the EU was ill-founded.Labour MP Stephen Kinnock says the Marmite price wars show that Brexiteers’ optimism about leaving the EU was ill-founded.
“When the plunging pound stops you from getting PG Tips and Marmite in the supermarket, you’re truly starting to feel the first tremors of Brexit.“When the plunging pound stops you from getting PG Tips and Marmite in the supermarket, you’re truly starting to feel the first tremors of Brexit.
“David Davis’s claims that there were no downsides to Brexit are colliding with economic reality. The best thing the Government can do for economic confidence and the pound is to commit now to starting the upcoming negotiations on the basis of securing full and unrestricted access to the single market.”“David Davis’s claims that there were no downsides to Brexit are colliding with economic reality. The best thing the Government can do for economic confidence and the pound is to commit now to starting the upcoming negotiations on the basis of securing full and unrestricted access to the single market.”
One clarification: Tesco has insisted that Unilever products are still available in stores today, but not from its website.One clarification: Tesco has insisted that Unilever products are still available in stores today, but not from its website.
1.55pm BST1.55pm BST
13:5513:55
The Press Association has been out and about, snapping Unilever products on Tesco shelves:The Press Association has been out and about, snapping Unilever products on Tesco shelves:
1.51pm BST
13:51
Reality is starting to bite about the practical impact of leaving the EU, writes our columnist Polly Toynbee.
Unilever says all its prices must rise by 10% – which is still less than the 15% fall in the pound, so expect worse to come.
The Unilever spat with Tesco over who pays is just a sideshow, as other retailers warn of steep price rises, as we import so many essentials. BT’s chairman says imported phones and broadband hubs are already up 10%. Each day the Financial Times reports more banks declaring they are moving significant functions abroad, while car manufacturers look to invest elsewhere in the EU for their new models.
As prices rise, the great majority of the population, whose incomes have been stagnant for nearly a decade, will see their living standards fall....
Here’s her full take:
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 BST
12:37
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.
“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.
We think that we could see Sterling reach $1.15 against the Dollar by the end of Q1 2017.”
Updated
at 12.38pm BST
12.05pm BST
12:05
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.”
11.53am BST
11:53
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/vHHxNeoloy
* - Not to be confused with David Davis, the Brexit secretary, whose views on yeast-based spreads are unknown
11.51am BST
11:51
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.
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:
Ground down by savagery – the agony of Aleppo
11.33am BST
11:33
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 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 BST
11:03
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
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."
Updated
at 11.16am BST
10.57am BST
10:57
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 stationery will cost more.
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.”
Updated
at 2.12pm BST
10.48am BST
10:48
The government responds....
David Lidington tries to calm fears of marmite shortage - reassures Jeremy Corbyn there is a "wealth" of organic alternatives in Islington
Updated
at 11.02am BST