Panic Over Marmite and Tea as Pound Plummets in Post-Brexit Britain
Brits are freaking out that Brexit’s cratering of the economy may affect the prices of classic food staples.
This week, Brexit has touched a few things almost as near and dear to British culture as the Queen of England and quirky fascinator hats: Marmite spread, tea, and Magnum ice cream bars.
If you’re not sure what Marmite is, you’re probably lucky. In many circles, its unusual taste can be as divisive as Brexit or Donald Trump — Marmite’s even become a shorthand for a polarizing politician, like Brexit booster and former UKIP boss Nigel Farage. Still, many Britons consider the brown, sticky, salty food paste made from yeast sludge a must-have in their pantry.
So on Wednesday, many were worried when they heard Marmite jars were in danger of disappearing from supermarket shelves thanks to a price war triggered by the pound’s falling fortunes.
After the U.K. voted to leave the EU in June, financial analysts initially held their breath for the consequences. Would sterling plummet and multinationals companies race to relocate?
Instead, after a quick dip in the markets, the first few post-referendum months were relatively stable. Granted, Britain hadn’t actually left the EU or lost access to huge markets, so that wasn’t surprising. Instead of slipping into a recession, the Bank of England cut interest rates, manufacturing and services rebounded, and economists painted an optimistic picture of a soft EU exit that would still maintain many of the U.K. special trade privileges with the continent.
That sunny hopefulness came crashing down last week, when the pound tumbled precipitously after Prime Minister Theresa May signaled she’d use Brexit to tighten borders, even if it means losing access to the E.U’s single market on the current tariff-free terms. Now British currency is trading at $1.22, a 167-year low. With Germany and France unwilling to give the U.K. favorable terms on trade without freedom of movement — the whole point of the EU — it seems that markets are finally waking up to the reality that Britain voted to isolate itself from Europe.
Average Britons quickly felt a taste of that economic pain. On Thursday, Unilever, the Dutch conglomerate that is the U.K.’s biggest food and grocery manufacturer, confirmed it is raising prices in the the country by 10 percent to make up for the floppy pound. In retaliation, Tesco, a major grocery chain, removed dozens of Unilever products from its website, including Marmite and other British dietary staples like PG Tips tea, Pot Noodles, and Magnum ice cream bars, as well as some cleaning and beauty supplies.
The hashtag #marmitegate took off as Twitter users expressed their displeasure and efforts to hoard their beloved spread.
It’s unclear if the price war is directly linked to Brexit, or simply an excuse for Unilever to gain leverage and impose extra costs.
Either way, it’s a sign of things to come – if Britain continues on this path, analysts predict that food prices will eventually have to rise as supermarkets and restaurants try to make up the difference from a drastically weakened currency.
Some business analysts argue that the falling pound, while painful in the short term, may eventually help make British manufacturing more competitive overseas and encourage tourism.
But as more people feel the pinch, there may finally be a Brexit backlash. In Burton upon Trent, the city where Marmite is produced in the U.K., locals said many were already regretting their Brexit vote. They were skeptical of increased Unilever profits trickling down to the workers, and talked of boycotting the company’s products.
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