Happy Brexit Christ­mas! Prices stay even, for now

Kuwait Times - - BUSINESS -

The bill for Christ­mas din­ners in Bri­tain is mostly un­changed from last year, ex­perts said, even though the higher price of im­ported raisins will hike the cost of Christ­mas pud­dings by 21 per­cent. But the respite may be short-lived as su­per­mar­kets, which are locked in a bit­ter price war, are likely only de­lay­ing un­til next year Brex­itin­duced in­creases due to the plung­ing pound, they warned. “The over­all cost of our fa­vorite meal is set to be more ex­pen­sive, up by 1 per­cent year-on-year, but still lower than in 2013 and 2014,” a study by Bri­tish mar­ket re­search firm Min­tec found this week.

Since Bri­tain voted in June to leave the Euro­pean Union, there has been an 18 per­cent fall in the value of the pound against the euro and dol­lar, lead­ing to an in­crease in the cost of im­ports. So far su­per­mar­kets are tak­ing the hit, with the price of cel­e­bra­tory drinks such as Cham­pagne from France and Prosecco from Italy stay­ing sta­ble. “There hasn’t been much im­pact so far de­spite the fall­ing ex­change rate,” says Toby Mag­ill, an al­co­hol ex­pert at mar­ket re­search com­pany IRI. “The re­tail­ers haven’t put up their prices.”

Pricey Christ­mas pud­ding

With desserts, the plum­met­ing pound has seen the cost of Bri­tish-made Christ­mas pud­ding soar by 21 per­cent. The in­crease is due to the higher cost of ingredients: raisins, but­ter, flour and sugar, ac­cord­ing to the study. But the cen­tre­piece of a tra­di­tional Christ­mas din­ner-the tur­key-has seen a 2-per­cent price fall since last year when prices were higher on the back of fears over avian flu, it said. Food re­tail­ers are ex­pected to see sales growth of 2 per­cent dur­ing the fes­tive sea­son com­pared to last year, an anal­y­sis by Fung Global Re­tail and Tech­nol­ogy pre­dicted. Ac­cord­ing to the Oc­to­ber re­port, the sec­tor has reg­is­tered “five con­sec­u­tive months of pos­i­tive growth... and growth has strength­ened se­quen­tially over the most re­cent three months.”“We an­tic­i­pate no drag on re­tail sales this Christ­mas from the Brexit vote in June,” the re­port adds.

Cam­paign for Christ­mas

Such a sce­nario could ben­e­fit na­tional pro­duc­ers who are try­ing to take ad­van­tage of the fall in the pound, by pro­mot­ing lo­cal food­stuffs pro­duced and sold in ster­ling. The Na­tional Farm­ers Union has launched a cam­paign call­ing on cit­i­zens to sup­port Bri­tish prod­ucts, per­haps tap­ping into an uptick in pa­tri­o­tism brought on by the Brexit ref­er­en­dum.

The Union is ready to di­rect Bri­tons to­wards nearby tur­key farms, as well as lo­cal pro­duc­ers of cheese and sparkling wine. Brus­sels sprouts recipes are also pro­vided as part of the guid­ance to have the best “100 per­cent Bri­tish” Christ­mas. But once the last crumbs of the Christ­mas pud­ding have been cleared, Mag­ill said the start of the new year could see an end to the price war and all su­per­mar­kets in­creas­ing prices. “They will get through Christ­mas and the price rises will hap­pen next year,” he said, shar­ing the gov­ern­ment’s view that the post-Brexit eco­nomic hit will be un­avoid­able in 2017.

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