British crisp manufacturer Walkers attracted criticism on Monday after it announced it would be raising its prices by 10 percent in the wake of Brexit.
The brand announced that it would be raising the wholesale prices of their products in response to the weakening pound, but added that it would be up to the supermarkets to decide whether to pass this onto customers. However, shrewd investors quickly pointed out that Walkers crisps are made and manufactured in Britain from British potatoes – meaning it does not have to counteract the rising import costs experienced by other companies, including Unilever and Birds Eye.
In response, Walkers’ owner PepsiCo said “the weakened value of the pound” has affected the import cost of some of its materials.
“Like most businesses, we are facing factors which impact the cost of some of our ingredients and materials including fluctuating foreign exchange rates,” a company spokesman said.
“In light of this we are taking steps to cover some of these additional costs through selective cost price changes across our portfolio.”
This comes after #MarmiteGate’s eruption on Twitter last month, when Marmite and other Unilever products became unavailable at some Tesco stores after a price dispute between the two retail giants. Unilever said the weakened pound had forced them to raise their wholesale prices, becoming one of the first tangible effects of Brexit on the British public.
The pound has fallen 18 percent against the US dollar since June’s UK vote to leave the European Union. Economists believe inflation could rise to 3 percent or higher within a year, making it likely that prices could rise further.
Wayne Hudson, Managing Director of Birds Eye, commented:
“Whilst we are absorbing a significant proportion of the raw material inflation ourselves, the level of increases mean that we may see in the region of a five per cent average cost increase”.