It’s the latest “gate” that’s made worldwide news: Marmitegate. Back in October, Marmite became unavailable at Tesco online stores and prices spiked causing panic in England. This could very possibly be a result of the Brexit vote, which caused the pound value to drop drastically and changed the economic outlook in England. And now, the people of England are paying. With their breakfast.
What is Marmite? And What is a Brexit?
Marmite is a spreadable yeast extract that many Brits enjoy putting on their toast. It’s a salty and sticky breakfast staple for half the country – the other half absolutely hates it. Therefore, half of the country was outraged when they couldn’t purchase their beloved Marmite, while the other half of the country was applauding Brexit for finally putting an end to the nastiness. It may have brought about more debate than the actual Brexit vote did.
For those who have been living under a rock, Brexit was a vote that occurred in Britain in June that asked if citizens wanted to leave the European Union or continue as a member. After a 52 to 48 percent vote, it was decided that Britain would leave the EU, beginning the “Brexit”. Since then, the prime minister resigned, the pound has lost value and Marmitegate happened.
How Did This Happen?
This all started because of a battle between Tesco, one of the largest grocery store chains the UK, and Unilever, the supplier of Marmite. Unilever also supplies Hellmann’s Mayonnaise, Lipton Tea, Dove cosmetics and Ben & Jerry’s ice cream, along with many other commons supermarket items. Some of these items were affected, but none hit the hearts of the British quite like Marmite did.
In light of the weakening of British currency, Unilever attempted to raise prices on some of its items to make up for the higher cost of importing goods. They wanted to raise prices by 10%, not specifying if the grocery store or the consumers should pay the price. Tesco said “not so fast” and refused to adhere to the price spike, leading to the lack of Marmite and other Unilever products on the Tesco website.
Marmite and Unilever goods remained on the shelves in stores, but not for long. Once people heard about the “crisis”, they rushed to the stores and stocked up on their favorite breakfast spread. This turned out to be unnecessary because by the end of the week the dispute was resolved and Marmite was back.
What About the Pound?
Even though the Marmite crisis has been resolved, the bigger issue has not been so lucky. The pound is still incredibly weak in comparison to before Brexit. This market crisis was only a foreshadowing to what might happen if the economic crisis following Brexit is not resolved. Trading tariffs have spiked and the pound has dropped worth by nearly 15%, which makes it the world’s worst performing major currency this year.
“A lot of suppliers have seen costs go up significantly because of currency. Some are covered until the end of the year but not beyond. Retailers are saying they can’t pass cost increases on to their shoppers but that has to happen,” says Ged Futter, a retail consultant.
Basically, this Marmite crisis is probably the first of many economic crises that will hit Britain following Brexit. This was the first real-world effect that citizens were able to see that was a result of Brexit and it caused many people to revisit the situation and evaluate how they feel. Except it doesn’t matter, because Brexit is now in full swing with Theresa May’s government.
Other economic problems throughout the country are starting to get serious. For example, phones and broadband prices are up 10% and car manufacturers are trying invest in other areas for their new car models as prices are rising. Suppliers need to raise prices for stores, who will then have to raise prices for consumers to keep making a profit. Citizens will likely see dropping incomes and higher living prices, which will surely cause economic turmoil.
Many people are denying the negative effect that Brexit is having, continuing their full support of the break from the EU, while others are only now realizing the dangerous aftermath. Britain remains split in their support of Brexit and it is likely that this will be a hot topic in worldwide markets for months and years to come.
It may have taken the scare of losing a beloved (or hated) breakfast spread to bring British citizens’ attention to the effects of Brexit, but it’s safe to say that the spotlight in Britain is now on the economy and the possible crash of their entire economic system. Marmitegate could just be the first of many market scares to come.
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