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KitKat Price Rise Fears As Nestle Responds To Brexit Pound Turmoil

Is it the new Marmite?

20/10/2016 14:12 | Updated 20 October 2016
Newscast via Getty Images

The price of KitKats and Nespresso pods could be hiked as food giant Nestle battles to control costs amid post-Brexit turmoil in the value of the pound.

Fears of price increases were raised as Nestle chief executive Paul Bulcke said the firm was “considering all the options” in dealing with the growing pressures following the EU referendum.

The Swiss giant makes KitKats alongside Nescafe coffee, Quality Street, Toffee Crisp and Lion bars among hundreds of other well-known brands. 

It comes after rising inflation threatens to increase prices for a whole host of everyday goods, including apples and fresh coffee.

5 Things You Buy That Are About To Become More Expensive

  • Fresh produce
    Artemis via Getty Images
    Fresh produce like British apples are more at risk of inflation than other goods thanks to their shorter route to market - for example, the fuel used to transport them is becoming more expensive, according to the IFS.
  • Marmite, and the rest
    Chris Radburn/PA Wire
    The high-profile row between Unilever and Tesco highlights the current pressure on prices. It's not clear what deal was struck, but it's likely to be a compromise on the original demand of a 10% increase on Marmite, Pot Noodle and PG Tips, according to Mintel Retail.
  • Imported foods
    Daniele Carotenuto Photography via Getty Images
    Imported goods like coffee have risen in price by 12% in recent months, Sarah Hewin of Standard Chartered said. Increasing costs of raw materials look set to challenge manufacturers.
  • Clothing
    Newscast/AP
    The cost of clothing is likely to increase over the next year, with Next predicting a rise of around 5% - while retailers have bought next season's clobber, the future is less certain.
  • Furniture
    Laurence Dutton via Getty Images
    While furniture has a longer supply chain, firms like Ercol in Buckinghamshire are preparing to tinker with prices as the cost of raw materials like metal and wood increases.

Nestle has been hit by the falling value of the pound against both the dollar and euro following the Brexit vote, but Bulcke cautioned: “Let’s first let the dust settle.”

The price of raw materials has risen in recent months, affecting Nestle’s business.

The news echoes that of rival Unilever which demanded a 10% blanket increase in price across the board, only to be snubbed by supermarket Tesco.

The ensuing two-day fallout last week resulted in Unilever’s brands being taken off Tesco’s website temporarily before a compromise was reached.

And the whole furore cast light on just how few mega corporations produce the what we buy.

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