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November 7, 2016

Nomad, PepsiCo ‘seek UK price hikes’ after Brexit 

PepsiCo and Nomad Foods are reportedly among the latest companies asking supermarkets to raise the price of their brands due to devaluation of the sterling in the wake of the UK's decision to leave the EU. 

PepsiCo and Nomad Foods are reportedly among the latest companies asking supermarkets to raise the price of their brands due to devaluation of the sterling in the wake of the UK’s decision to leave the EU. 

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by GD50 Custom
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PepsiCo wants to raise the price of its Walkers brand snacks and Nomad wants to hike the price of its Birds Eye frozen fish products. 

Reports over the weekend suggest Nomad wants to push through a price increase of approximately 12% and is also reportedly considering reducing the number of fish fingers contained in a packet. PepsiCo purportedly aims to increase its prices by 5-10%. 

Wayne Hudson, Birds Eye’s UK and Ireland managing director, said: “Increasing costs is not a decision we take lightly, and the last time it was necessary to raise costs was in 2012. As such, we have been in open and collaborative conversations with the retailers for some time now and are working closely with them to minimise any impact on our customers.” 

These latest moves to increase prices follow in the footsteps of consumer goods giant Unilever, which had a dispute with Tesco in the UK over its request for price hikes on products including Marmite and Ben and Jerry’s ice cream last month. Tesco initially pulled Unilever products from their online store in the UK but the companies soon reached a settlement, though the terms were not disclosed.

It will not just be Unilever to push for Brexit price hikes – editor’s viewpoint

Food companies are raising prices in part because the commodities used to produce products are priced in US dollars. 

When the UK voted to leave the EU at the end of June, one dollar was worth approximately GBP1.50. Today, US$1 is worth around GBP0.80. This devaluation is forcing up the cost of products, even when they are manufactured in the UK, due to the global nature of the supply chain. 

PepsiCo, which uses British potatoes to make Walkers crisps, for example, stressed that it still imports ingredients such as oil, seasonings and packaging material. 

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Free Whitepaper
img

What is the impact of historically high inflation on the UK consumer landscape?

The average UK consumer is experiencing a severe cost-of living crisis as inflation surges to a forty-year high and the price of goods continues to rise. This shock is the result of the sharply increasing costs of commodities, energy, and the ongoing conflict in Ukraine, and is threatening FMCG manufacturers, retailers, and foodservice operators’ ability to survive and grow. Inflation will have a profound effect on many consumer-facing industries in 2022 and beyond. Consult GlobalData’s new whitepaper, Inflation in the UK: The Impact of Historically High Inflation on the UK Consumer Landscape, to better understand shifts in consumer behavior and their impact on spending patterns, as well as the implications for UK businesses. This whitepaper covers:  
  • Why has global inflation returned with a vengeance?
  • What is the current inflation situation in the UK?
  • What impact is inflation having on UK retail sales?
  • What tactics are businesses relying on to tackle the effects of high inflation?
  • How are consumers changing their behaviors to cope with the higher cost of living?
  • Which industry sectors are most vulnerable to reduced consumer demand?
  • How is the government responding to high inflation?
  • How long will high inflation last in the UK?
  • How can your company survive and thrive in a high inflation environment?
Enter your details here to receive your free whitepaper and ready your business for these increasingly uncertain times.
by GD50 Custom
Enter your details here to receive your free Whitepaper.

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