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Supplier raises prices by 12% in face of weak pound

11 August 2016 by
Supplier raises prices by 12% in face of weak pound

A food supplier has increased its prices in the face of the depleted value of the pound.

French product supplier FineFranceUK, which operates depots in London, Portsmouth and Weston-super-Mare, announced on Monday that it would be raising prices by 8%-12%.

The company sent an email to its customers explaining the decision, which comes seven weeks after Britain voted to leave the European Union (EU).

The pound to euro exchange rate is currently €1.16, which has fallen from pre-Brexit highs of around €1.30.

In the email, the company indicated that it had not changed its prices since July 2015, at which stage it was able to reduce them across 90% of its catalogue thanks to the strength of the pound at the time.

It said: "Today, we are facing a situation where we have no choice but to increase prices, in order to keep a minimum margin that allow us to provide the service we think you deserve.

"As from the 1 of August, we have started to increase every euro-dependant price in our catalogue. We work by categories (or suppliers) and we try to negotiate and reduce the impact as much as we can. However, all in all, every line will have increase by 8 to 12% by mid-August."

Joel Kissin, owner of Boulestin restaurant in London's St James's was one of the customers who received the email. He said: "It is quite a shocking increase but I understand why they have had to do this. We like them [Fine France] as a firm and we like dealing with them but we will have to start looking around for what is reared and grown in the UK.

"It will be good for British sales but there are certain things that you can't buy in Britain. Some of our major wine suppliers are holding their prices for now, at least until their next price list is published, but all of these increased prices will mean increased prices in restaurants, which the Government knows will increase inflation."

Arnaud Chemin, director at FineFrance UK, told The Caterer: "Obviously it does affect the business, when you sell for £1 and you get €1.20 instead of €1.40, you have to increase the prices if you want to keep the same level of business. If we don't, it will not only affect the profit we receive but also the level of business we provide.

Just days after the referendum, an Italian food supplier increased its prices by 10%, according to London's Super Tuscan restaurant owner Nick Grossi.

At the time, Grossi told The Caterer: "It's a surprise that they have made this decision so quickly, but they are very apologetic and I don't really want to jeopardise my relationship with them,"

"They have made it with a heavy heart, but they have partners within the EU, they tell me, and obviously a lot of investment and it is costing them dearly and they didn't want to react too late. They assure me that should things stabilise they will be happy to reverse this decision, but unfortunately they need to do it sooner rather than later."

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