ONE of Britain’s largest manufacturers of branded foodstuffs, Unilever, announced that because of Brexit and the drop in value of the pound it will be increasing its wholesale cast to retailers to ensure it maintains its profit margins.
Whilst no retailer is happy with this decision, one of the supermarket giants, Tesco has decided this is not accessible and has started to ration or remove certain Unilever products from its online offers which means such staples as PG Tips and Marmite may be more difficult to purchase.
As yet, other supermarkets are waiting to see what the outcome will be before taking any action although budget stores such as Aldi and Lidl may well be laughing as so much of their product is own label and any price increase by competitors is likely to push more business their way as people look to purchase products for less.
Market analysts see this as the normal start to any price negotiation between two behemoths of the retail business which they believe will be resolved with a three-way split of the price increase. In such a scenario, Unilever will reduce the increase slightly, Tesco will accept a small loss of profits and the consumer will see the bulk of the increase appear on supermarket shelves.
That’s why Brexit is like Marmite as you either love it or you hate it!