Brexit strikes

Brexit strikes

Panic struck in the UK last week as a price row resulted in dozens of Unilever brands being pulled from Tesco’s online shop, including British favourite Marmite.

The dispute came as Tesco resisted moves by Unilever to raise prices in the UK to compensate for the sharp drop in the value of the pound.

Other popular food and drink products made unavailable online included Ben & Jerry’s ice cream, Hellmann’s mayonnaise, PG Tips tea, I Can’t Believe It’s Not Butter spread and Pot Noodle snacks.

The incident was resolved within a day of the news breaking and stock levels were expected to return to normal. A statement read, “Unilever is pleased to confirm that the supply situation with Tesco in the UK and Ireland has now been successfully resolved.

“We have been working together closely to reach this resolution and ensure our much-loved brands are once again fully available. For all those that missed us, thanks for all the love.”

However, the dispute is being considered the first real example of post Brexit uncertainty to hit consumers, and according to supply chain consultancy Crimson & Co, British consumers should prepare for more of the same.

Manager Duncan Boyd explains, “While the two businesses did well to resolve the issue quickly, the reality of the situation is we can expect to see more of these clashes in the future.

“Firstly, price increases over the next few months are inevitable – the UK consumer has been in a fortunate position where for the past five years prices have stayed fairly flat and inflation has been running at below the Bank of England targets. It could be argued that we are due an increase to our cost of living and the post Brexit climate will only spur this on.

“Amongst retailers, while Tesco and Unilever were able to resolve their differences, some might not be so lucky, so we’ll likely see a greater proportion re-evaluate their supplier relationships.

“Much like the consumer, the supermarkets too will need to absorb costs, so they will need to be clever when it comes to protecting their margins. In action this might lead to an increase in promotions and other offers being run in stores that give the impression of lower costs or greater value. However, it is only a matter of time before prices have to rise and retailers and their suppliers will have to evaluate their promotional strategies.

“The reality is these are the consequences the UK is going to have to face as we move along the road towards Brexit. Compromise will be critical, not just amongst industry titans of retail and manufacturing, but for consumers too.”

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