{"id":36111,"date":"2016-10-15T02:00:34","date_gmt":"2016-10-15T06:00:34","guid":{"rendered":"http:\/\/quotulatiousness.ca\/blog\/?p=36111"},"modified":"2021-07-13T17:45:11","modified_gmt":"2021-07-13T21:45:11","slug":"unilever-attempts-to-draw-the-longbow-over-marmite","status":"publish","type":"post","link":"https:\/\/quotulatiousness.ca\/blog\/2016\/10\/15\/unilever-attempts-to-draw-the-longbow-over-marmite\/","title":{"rendered":"Unilever attempts to &#8220;draw the longbow&#8221; over Marmite"},"content":{"rendered":"<p>Marmite, an almost uniquely British product, is in the headlines this week over an attempt by manufacturer Unilever to jack up prices due to the drop in the pound against the Euro. As <a href=\"http:\/\/www.forbes.com\/sites\/timworstall\/2016\/10\/13\/tesco-and-unilevers-great-marmite-con-job-over-brexit\/#6e10b03854a3\" target=\"_blank\" rel=\"noopener\">Tim Worstall<\/a> points out, this is not in any way justified because all of the inputs to the product are produced in the UK (that is, the input prices have not significantly changed regardless of how the pound is doing in terms of the Euro exchange rate):<\/p>\n<blockquote><p>Personally I love the stuff but even in Britain that puts me in a distinct minority.<\/p>\n<p>The other amusement though comes from the action itself. For what Unilever is doing here is what we in Britain refer to, colloquially, as \u201ctaking the piss.\u201d<\/p>\n<ul>\n<p><em>Yesterday, the implications of the pound\u2019s fall on prices and retailer margins hit home for the wider public as the country\u2019s leading supermarket engaged in a war over prices with its highest-profile supplier of branded goods.<\/em><\/p>\n<p><em>Either UK consumers will eat store-branded yeast extract, or they\u2019ll pay more for Marmite, or the impact of the pound\u2019s fall will be shared between supplier and retailer.<\/em><\/p>\n<\/ul>\n<p>This is superficially plausible. Britain imports some 40% of its food and as a result of the Brexit vote the pound has fallen against other currencies. We would therefore expect to see some price rises in food items. Obviously in those imported that have to be paid for in that more expensive foreign funny money. But also in certain domestic foods which substitute for those foreign ones. So, for example, if foreign chicken rises in price then so too will British chicken as demand for it rises\u2013people will substitute away from the more expensive foreign muck to the purer and more delightful domestic production.<\/p>\n<p>However, this really doesn\u2019t hold for Marmite.<\/p>\n<ul>\n<p><em>Consumer goods giant Unilever has been accused of \u2018exploiting\u2019 British shoppers by withdrawing more than 200 much-loved products from Tesco after the supermarket refused to agree to its 10 per cent price hike. Critics claim the world\u2019s largest consumer goods manufacturer, which makes an estimated \u00a32billion profit a year, is \u2018using Brexit as an excuse to raise prices\u2019. The Anglo-Dutch firm, which heavily campaigned against Brexit, claims it has been forced to increase prices as a result of the falling value of the pound in the wake of the referendum.<\/em><\/p>\n<\/ul>\n<p>The reason it doesn\u2019t hold for Marmite is because it is not imported and nor are any close substitutes in any volume. Thus Unilever\u2019s costs have not gone up in any manner at all over this. Quite the contrary in fact, the only flow, other than trivial amounts of Vegemite an Australian version of a similar thing, is of Marmite out of the UK. Meaning that Unilever\u2019s profits on Marmite exports have risen as a result of the pound\u2019s fall. Their costs, revenues and margins in sterling are exactly what they were for domestic sales before that slump in the pound.<\/p>\n<ul>\n<p><em>The row is said to have developed when Unilever \u2013 which says it faces higher costs because of the fall in sterling \u2013 attempted to increase wholesale prices.<\/em><\/p>\n<\/ul>\n<p>It\u2019s simply not true thus the micturation extraction.<\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"<p>Marmite, an almost uniquely British product, is in the headlines this week over an attempt by manufacturer Unilever to jack up prices due to the drop in the pound against the Euro. As Tim Worstall points out, this is not in any way justified because all of the inputs to the product are produced in [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":35193,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[4,831,62,74],"tags":[337,1428],"class_list":["post-36111","post","type-post","status-publish","format-standard","hentry","category-britain","category-business","category-europe","category-food","tag-eu","tag-marmite"],"jetpack_featured_media_url":"https:\/\/quotulatiousness.ca\/blog\/wp-content\/uploads\/2016\/06\/favicon.png","jetpack_shortlink":"https:\/\/wp.me\/p2hpV6-9or","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/36111","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/comments?post=36111"}],"version-history":[{"count":2,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/36111\/revisions"}],"predecessor-version":[{"id":67095,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/36111\/revisions\/67095"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/media\/35193"}],"wp:attachment":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/media?parent=36111"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/categories?post=36111"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/tags?post=36111"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}