So the break up letter’s been delivered. This week Theresa May, Prime Minister of the UK, sent her attaché off to Brussels to formally trigger Brexit. It’s been a funny week where feelings of the week of the referendum came flooding back, but you can’t dwell on stuff like that, we move on and try and make the best of it. But the connotations of the decision of 52% of the country and what it means on their day to day lives has already begun. And now drinks giant Pernod Ricard has just told them they’ll have to pay an extra couple of quid for a bottle of vodka. Doesn’t sound terrible, but is that where it ends?
Pound Was Hammered
The British pound was slammed after the vote as global investors thought “wow, shit, did not expect that to happen!” Even as a Remainer/Remoaner I know that’s not that they’ve lost confidence, it’s just the huge uncertainty that gives people the jitters. That’ll change, but unfortunately not likely for the next 5-10 years at least. So us Brits are just going to have to live with the idea that imported goods are just going to get a bit painful for a while, that’s all.
Tough For Foreign Companies
Pernod Ricard is arguably one of the first big foreign players in the drinks business to state the obvious. It’s hard for them, as the UK is a big market for them, but the big drop in the currency makes business a bit too tough without raising the amount of GBP they’re asking for their products. It makes sense and was inevitable, so unfortunately that bottle of Absolut Vodka or Jamesons, will be a tad more punchy on the shelves.
Squeeze Is On
So what? Those that voted to Leave will rightly argue that £2 extra on a bottle of imported vodka is a small price to pay for “taking back control”, whatever that means. It’s not necessarily that that worries me. It’s that included in the statement was the idea of “reviewing operational efficiencies”. That basically means sacking people so you don’t have to put the prices up too much. Whether that’s in the boardroom or on the factory floor, the squeeze in the import sector is about to begin!
I don’t want to say cheers on this one.