Don’t blame Brexit for fleecing shoppers

BLAMING the ‘ absolutely disastrous’ impact of Brexit for a 50 per cent increase in wholesale tea prices since the start of this year, the UK boss of Typhoo warns that the cost of a cuppa will rise sharply.

Shouldn’t he go back to school and brush up on basic mathematics?

True, the fall in the value of the pound since the referendum has made imports more expensive (though it has given a healthy boost to exporters).

But at 18 per cent, sterling’s post-Brexit depreciation against the dollar – in which tea is priced – comes nowhere near to explaining that 50 per cent increase in the wholesale price.

Meanwhile, the cost of the imported tea in a bag of Typhoo accounts for only about half its retail price, with the rest going on wages and other costs largely unaffected by the exchange rate.

So even if Brexit accounted for the entire 18 per cent fall in sterling (a big ‘if’, since the currency was overvalued anyway), it would have added only a few pence in the pound to production costs of tea bags.

This is hardly the ‘ absolute disaster’ claimed by Typhoo’s Somnath Saha – and certainly no justification on its own for a dramatic price rise.

Indeed, isn’t it clear that businesses are increasingly using Brexit as a catch-all excuse for exploiting consumers?

Unilever has even blamed the vote for pushing up the price of Marmite – homeproduced and little affected by the exchange rate – while firms such as Apple have increased prices by more than the pound has fallen.

Meanwhile, corporations such as Nissan – now joined by Britain’s pharmaceutical giants – queue up to demand government support after Brexit, threatening to leave the country if they don’t get it.

This smacks of opportunism at its most cynical. Indeed, with many forecasters (including prominent former Remainers) now predicting British-based firms stand to gain handsomely from Brexit, most of these threats are sheer bluff.

As for fears of a trade war with the EU, our partners would be mad to erect tariff barriers against a country that imports more from them than they buy from us.

True, nobody can predict precisely how Brexit will affect us (though many import prices will surely come down when we are free to forge our own trade deals).

But isn’t it contemptible to exaggerate the risks and exploit the uncertainty as an excuse for fleecing customers?