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Food supplier reacts to Brexit by hiking prices 10%

27 June 2016 by
Food supplier reacts to Brexit by hiking prices 10%

Some food suppliers have already increased their prices amid the fluctuations in the value of sterling following Brexit.

London-based Super Tuscan restaurant in Spitalfields has revealed that it had already received notification from a supplier of Italian foods today that it would be hiking prices by 10%.

Owner Nick Grossi took to Twitter to express his surprise at the speed of the move, which comes just days after the UK's electorate voted to leave the EU, sparking a fall in the value of the pound against a range of currencies, including the euro.

The pound to euro exchange rate is currently 1.20, having fallen from highs of around 1.30 last week.

"Disappointed to receive an email from 1 of our suppliers today announcing an immediate 10% increase in their prices due to Euro instability," Grossi tweeted, from Super Tuscan's Twitter account.

He declined to reveal the identity of the supplier when contacted by 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," he said.

"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."

Despite the increases, Grossi said his business would not react so quickly to increase its own prices.

"We will wait and see and we are going to have to look at the products we buy from them and take stock and see what other suppliers are doing, and whether we can buy from other suppliers without compromising on quality.

"We deal with a lot of different suppliers and consequently we have a lot of options to move things around if we want to. But we tend to buy from so many different suppliers because not one supplier has all the best of one product.

"The implications of this in the short-, medium- and even the longer term - you try to keep a positive mind about it but it is just uncertain at the moment. The whole point about what we are doing here is to try and create an experience whereby coming and having a meal here is like coming and having a meal in someone's house in Italy. So us for then to re-evaluate that and say well ok, it will be cheaper to buy certain products that aren't produced in Italy because it is too difficult or expensive to important has an impact on our whole philosophy.

"But we are keeping a positive outlook on it and hoping there will be some silver linings. We are where we are - let's just try and get on with it."

Although quicker than expected in the case of this supplier, it has been widely predicted that Brexit would lead to an increase in food prices.

Commenting today, David Read, chief executive of Prestige Purchasing, explained: "Some effects, such as import tariffs and rising labour costs, will only impact prices once we actually leave the EU, but if the recent significant falls in the value of sterling continue, we will see prices increasing by the end of the summer."

"As a nation we run a £21b trade gap in food, as we produce only around 60% of what we eat. Almost 70% of our imported food is from the EU, but sterling has fallen against the dollar and many other currencies, so all of our food and drink imports will be affected."

Food prices likely to rise following Brexit >>

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Reaction to the EU Referendum vote: from the manufacturers and suppliers >>

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