Higher Supermarket Prices - Who Pays for Brexit?

Favourite household brands such as Marmite, Comfort, Dove and Flora could be increasing in price because of Brexit

I'm really not going to get too much into Brexit this article, as I went into reasonable detail on my post yesterday, which you can check out on my blog. However, naturally this topic requires a little background information on Brexit to give some contextual knowledge. Brexit, otherwise known as British Exit, is the result of the British referendum on whether to leave the EU or not, back in July. Coming as a shock to quite a lot of people, the British people decided to leave the EU with a majority of 51.9% voting in favour of leave. Naturally, this has taken a toll on the value and strength of the pound, making it more expensive for foreign companies to import goods into the UK. 

One of the biggest questions surrounding our split from the EU: 

Who is going to pay for Brexit?

This question is really at the heart of this story. According to Wikipedia, Unilever is a "British-Dutch multinational consumer goods company co-headquartered in Rotterdam." This means that all products sent into the United Kingdom was going to cost them more. The dispute in this situation comes with the unwillingness of Unilever to front the cost of the pound decreasing in value. Unilever feels that it isn't their responsibility to pay for a decision that the UK made, and therefore increased the cost of their goods to British supermarkets by 10%. Although this may be seen as perfectly reasonable to some, it comes down to personal opinion regarding the key question - Who should pay for Brexit?

Evidently, Tesco didn't think it should be them. Tesco refused to pay these prices, and seeing as they weren't getting sold any stock, they took these products off of their online website. Despite this, Tesco "typically has one to two weeks' stock," meaning that there wasn't an obvious or immediate shortage of Unilever products in Tesco stores. However, considering that Unilever is the UK's biggest grocery manufacturer, this still had a massive impact on both Tesco and Unilever themselves, both losing revenue from this dispute.

Despite this, it seems like the conflict may be over. For now. Unilever have stated that they are  "pleased to confirm that the supply situation with Tesco in the UK and Ireland has now been successfully resolved," and the BBC understand that "Unilever had to give some ground." Unilever products will be coming back to the Tesco online store in the next few days.

Alone, this story has seemingly little significance in the big picture. To an extent, it's very insignificant, it's the fact that it's happened which is of bigger significance. Let me explain. 

The fact that Tesco and Unilever had a minor dispute over prices holds very little significance regarding Brexit. However, this is the first news worthy dispute regarding the price of leaving the EU. Since the vote to leave, the pound sterling has dropped by 16% against the euro, and 19% against the dollar. This means that sooner or later, there will be increasing mentions of the cost of leaving the EU, and who will pay it. Somebody is going to lose money, and whoever that is will not be happy. I think it's only fair to come back around to the question at the core of this article:

Who is going to pay for Brexit?

Thank you very much for reading this post. No doubt there will be a future post regarding this topic as there will only be more, and bigger stories about the price of Brexit to both consumers, supermarket chains, and manufacturers. But for now, this is the end. If you liked this post, feel free to follow the blog or find me on Twitter @jman0605 or check out some of my other posts.

Thanks for reading :D