- Title: Britain's biggest potato chips maker Walkers hikes prices after Brexit
- Date: 7th November 2016
- Summary: LONDON, ENGLAND, UK (NOVEMBER 7, 2016) (REUTERS) VARIOUS OF WALKERS CHIPS ON SHELF IN SHOP (SOUNDBITE) (English) INDEPENDENT MARKET ANALYST, JEREMY BATSTONE-CARR, SAYING: "Many companies are taking advantage of the apparent rise in headline CPI (consumer price inflation) to push price increases through. But let's be in no doubt about this - year on year increases in headline CPI, in large part I think brought about by the basing out in January of the oil price and the recovery of energy prices thereafter, is not really inflation in the macro-economic sense of the word. Indeed underlying inflationary pressure remains very, very benign and I sense that after January-February once the year on year affect of the falls in the oil price begin to drop out, you'll probably see headline inflation drop back." MORE OF WALKERS CHIPS ON SHELF IN SHOP VARIOUS OF SHOPPER BUYING WALKERS CHIPS
- Embargoed: 22nd November 2016 17:03
- Keywords: Britain potato chips potato crisps Walkers pound sterling Brexit
- Location: LONDON, ENGLAND, UK
- City: LONDON, ENGLAND, UK
- Country: United Kingdom
- Topics: Currencies/Foreign Exchange Markets,Economic Events
- Reuters ID: LVA00157G5THP
- Aspect Ratio: 16:9
- Story Text: A bag of Britain's biggest-selling potato chips is set to rise by 10 percent after maker Walkers said on Monday (November 7) the slump in the value of the pound after the vote to leave the European Union had pushed up its manufacturing costs.
Shoppers could also pay more for fish fingers, a staple children's meal, as Birds Eye joined a growing number of manufacturers of products ranging from tea bags to ice cream hiking prices because of Brexit.
The price of a standard bag of salt and vinegar or cheese and onion flavour crisps, as they are known in Britain, will typically increase to 55 pence ($0.62) from 50 pence after the move by Walkers, which is owned by U.S. group PepsiCo.
The potatoes used to make crisps for Walkers, which is Britain's third-biggest grocery brand according to trade publication The Grocer, are grown in Britain. But other ingredients, such as frying oil and seasoning, and packaging were imported, Walkers said.
Economists believe that sterling's slump since the June vote - it is down about 19 percent against the dollar and 16 percent against the euro - will lead to higher prices despite fierce competition between supermarkets.
Inflation could rise to 3 percent or higher within a year, economists have said.
But some market analysts believe companies could use the situation as an excuse to raise prices.
"Many companies are taking advantage of the apparent rise in headline CPI (consumer price inflation) to push price increases through. But let's be in no doubt about this - year on year increases in headline CPI, in large part I think brought about by the basing out in January of the oil price and the recovery of energy prices thereafter, is not really inflation in the macro-economic sense of the word," said independent market analyst Jeremy Batstone-Carr.
"Indeed underlying inflationary pressure remains very, very benign and I sense that after January-February once the year on year affect of the falls in the oil price begin to drop out you'll probably see headline inflation drop back," he said.
Unilever was the first to move with an attempt to impose 10 percent rises on a host of big brands like savoury spread Marmite, Pot Noodle and Magnum ice cream last month, triggering a dispute with supermarket group Tesco.
Birds Eye, which is owned by Nomad Foods, said many of its raw products were priced in dollars, and its costs in sterling had risen since the referendum, making it necessary to raise prices for the first time since 2012.
Walkers said that since it did not set the retail price of its products, it would be up to individual retailers to determine the price on the shelf. - Copyright Holder: REUTERS
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