Don’t Blame me – I told you this would happen………
Typhoo Tea: Cost of a cuppa to go up.
For chief executive Somnath Saha, the economics of tea are simple and brutal. Typhoo Tea produces 125 million tea bags a week at its factory in Moreton, Wirral, which have just one ingredient - tea leaves, and they are imported. Black tea is a global commodity, traded in dollars. Following the fall in sterling since the Brexit vote, costs have soared for this renowned brand as 95% of its sales are in the UK. "This is an absolute disaster for a company the size of ours," says Mr Saha. "The very sharp fall in the pound means the impact is at least a quarter of a million pounds a month for us. This is having a very negative impact on our business and we are really suffering. It's now come to a point where it's not sustainable for us." There are plenty of winners from the fall in the value of sterling. But Typhoo Tea is a graphic illustration of what it's like for a business with one raw imported material. Typhoo has been trading for more than a century. These days, most of its black tea comes from Kenya. It's then blended and packaged on site. The company also packages own-label tea for most of the major supermarkets. In addition, it produces a range of herbal teas and those ingredients are sourced in euros. It's a high-volume, low-margin business. The cost of the ingredient depends on the quality of the leaf. A typical 80kg bag of black tea could be bought for £90 to £100 at the beginning of the year. The company says that same bag now costs £120 to £150 at the weekly international auctions. In other words, it is paying an awful lot more for the same amount of tea.
Morrisons raises Marmite price by 12.5%.
The Grocer magazine reported that the firm is charging £2.64 for a 250g jar. It is the first supermarket to raise the price of Marmite since the recent dispute between Tesco and manufacturer Unilever over the effect of the falling pound on production costs. A Morrisons spokesman said: "Sometimes we have to increase prices as a result of costs rising." Unilever has raised the wholesale price of many household products, including PG Tips tea and Pot Noodles, because falls in the value of sterling have increased the cost of products made outside the UK. The pound has lost nearly a fifth of its value since the UK voted to leave the EU in a referendum in June. It is the world's worst-performing currency on the global money markets this year. This makes imported goods more expensive because they continue to cost the same in dollars or euros, but the price is higher when converted into sterling.
Apple raises computer prices in UK.
On Thursday, the company unveiled new Macbook Pro laptops, with prices similar to the US after currency conversion and addition of UK VAT. But the company also increased the prices of its older computer products, including the three-year-old Mac Pro, by hundreds of pounds. One analyst said consumers should expect further price increases. "Apple has to recalibrate prices after significant currency fluctuations, and since the EU referendum, UK prices are out of sync with the dollar," said Patrick O'Brien, analyst at the Verdict Retail consultancy. "Apple has taken the hit up until now. While price increases won't look good to the consumer, it's difficult to blame Apple. Once you strip out UK sales tax (VAT) and the currency conversion, the new UK prices could still be viewed as fair."
Nissan talks were open and honest, says Downing Street.
There was "no deal, no compensation package, nothing about tariffs", a No 10 spokesman said. The Times reported that ministers had given a "last-minute written promise" to protect Nissan from the consequences of Brexit to keep investment in the UK. Labour has said the government should say what was promised. Business Secretary Greg Clark is to be questioned on the subject by MPs. Nissan announced on Thursday that it would build two new models at its Sunderland plant following talks with the government, securing 7,000 jobs. The Japanese company's commitment to the UK's biggest car factory had been in doubt following the referendum decision to leave the European Union. Downing Street has been asked to confirm the Times report that a written promise was made to protect the company from any consequences of Brexit, such as possible increased trade tariffs. The prime minister's spokesman said there had been "numerous discussions" between Nissan and the government. Pressed on whether a letter had been written to the company, he said there were "all forms of communication between Nissan and the government at various levels" and that it would get the "best deal" for all industry when the UK leaves the EU, which is expected to happen in 2019. But Conservative MP and former business minister Anna Soubry said that "something has been put into this, effectively a sweetening of a deal, to keep Nissan in our country".
Greg Clark stands by refusal to publish Nissan letter.
The business secretary says he will not publish his letter to Nissan because it contains sensitive commercial details. Greg Clark told MPs companies had to be confident their plans would not be shared with their competitors. Nissan has said two new car ranges will be built in Sunderland, saving thousands of jobs, after "support and assurances" from the government about the UK's future outside the EU. Labour attacked the "backroom deals" and demanded the letter's release. The building of the Qashqai and the X-Trail SUV in Sunderland had been in doubt following the Brexit vote. In a Commons statement, Mr Clark repeated that he had assured Nissan the UK would be seeking trade that was "free and unencumbered by impediments" for the motor industry after Brexit. He said the carmaker's announcement was a "massive win" for 7,500 direct workers and the wider supply chain, adding: "It is hard to think of more unambiguously good news." Labour's shadow business secretary Clive Lewis welcomed the investment, but said MPs and the government were being kept in the dark on the deal - and the government's post-Brexit plans - despite Mr Clark revealing "tantalising details" in a BBC interview the previous day. "Are we really to believe that Nissan are risking millions of pounds of investment and the success of its newest models on the basis of the government's intentions alone?" Mr Lewis asked.
All details above from BBC News website.
[As the PM travels the world hoping to drum up future trade deals and Parliament gets ready for the big debate followed by the big vote – causing Labour MP’s to desert theirs posts because of Corbyn’s 3 line whip – it’s all getting very interesting again. By the looks of it we’re heading towards a ‘Hard’ Brexit (which thinking about it was bloody obvious from day one) which will mean greater than expected economic upheaval and a goodly number of jobs going to the Continent – led by the financial institutions. All very predictable and all very, very unnecessary.]