marmite

On 24 June, Brexit shocked the country. Whichever side you were on, the result was a surprise. But it wasn’t until October that the ramifications really hit home for food and drink.

As The Grocer revealed, with sterling having fallen 20% in value since the referendum, Unilever demanded a 10% price hike across its portfolio of products.

In an incident that was quickly dubbed Marmitegate, Tesco CEO Dave Lewis refused to bow to Unilever’s demands, and removed the divisive savoury spread - along with other products like Pot Noodle, Hellmann’s mayonnaise, and Persil laundry detergent - from its website.

The story was headline news on every channel, and while the spat itself was settled in 36 hours - with the consensus being that Tesco had played a PR blinder as it portrayed itself as the champion of the consumer - two weeks later The Grocer revealed that Morrisons had caved in to Unilever with the price of several lines, including Marmite, going up.

More importantly, the inflationary genie was out of the bottle. Marmitegate symbolises not only the divisive nature of Brexit , but the inflationary forces it unleashed.

In doing so, it’s given a voice to suppliers in their battle to secure price hikes. A voice that was all too often missing in the run up to the landmark vote, with the FDF sitting on its hands. To be fair, a number of its members - including Unilever - had written letters, but in yet another example of how divisive Brexit was, with the exception of Asda, none of the mults were prepared to share their private fears.

As the pound fell to a 30-year low and an emotional David Cameron handed in his resignation, food finally found its voice. Tesco’s UK boss Matt Davies warned: “Everybody should be very, very clear how damaging food inflation is to the economy, to retail businesses and manufacturing businesses, and how lethal it could be for millions of people struggling to live from week to week.”

And while exporters enjoyed the weakened status of sterling, it only added to the inflationary pressures - indeed as of this week the era of deflation has officially been declared over by Kantar as standards like milk, bananas and butter have all edged up in price, risking what ex-Sainsbury’s boss Justin King fears will become a “car crash of epic proportions”. Even Christmas hasn’t escaped unscathed, with the price of traditional puddings climbing 21% post-Brexit - though the consensus is that the real inflation will kick in in 2017.

With new PM Theresa May wanting to trigger Article 50 in March 2017, the other uncertainty unleashed by Brexit is the increased risk to the migrant workers the food and drink industry depends on.