Greedy Nestlé could hike Kit Kat price, claiming plummeting pound is driving up cost of ingredients in Brexit backlash
The value of sterling as suffered since the vote to leave the EU - pushing up the cost of raw materials and imported goods
GREEDY chocolate giant Nestlé has stuck two fingers up to its UK customers by threatening to hike the price of KITKATS to compensate for the plummeting value of the pound.
The Swiss company’s chief executive Paul Bulcke has announced that a “responsible” rise in prices of many of its products, which also include Aero and Nescafé coffee, may be on the cards if the sterling continues to fall.
The comments come despite Nestlé announcing a rise in sales in the last nine months.
Mr Bulcke said: “The pound is going south and that is going to have some effect on certain imports and you cannot defy gravity.”
The shock announcement follows an attempt earlier this month by Marmite and Pot Noodle owner Unilever to raise prices.
The move caused a UK wide outcry and saw supermarket Tesco remove all of the company’s products from its shelves.
Twenty-four hours after the stand-off, Tesco and Unilever struck a deal behind closed doors to allow the beloved spread back into the aisles.
The value of the pound has plummeted 18 per cent against other currencies since the vote to leave the EU in June.
Experts have warned that if the pound doesn't recover it will put pressure on supermarkets to put up prices.
Others have said that it will also add up to 3 per cent on fuel prices in the next year.
Yesterday, the Sun Online revealed how the price of wine has gone up 5 per cent.
Financial analyst Jon Cox, said that a Nestlé price increase was likely. He added: “Their biggest businesses in the UK are chocolate and coffee and those commodities are obviously not produced in the UK, so Nestlé is probably going to have to increase prices at some point.”
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The warning comes as Nestlé cut its profit forecasts for next year after the rise in sales in the first nine months of this year slowed to their weakest pace for more than a decade.
Nestlé, the world’s biggest food company, had forecast that its full-year organic sales would rise by 4.2per cent.
But slow growth in developed economies and a poor performance in China have forced it to revise that figure down to 3.5per cent.
In total, it generated sales of 65.5bn Swiss francs (£54bn) over the nine month period.
Nestle said its UK team was now looking at all options to deal with the problem, caused by the steep decline in the pound against the US Dollar since the Brexit vote.
Drinks company Danone, which produces Volvic water and Activia yoghurts, has also posted poor sales figures for this year so far.
Richard Baker, chairman of the British Retail Consortium, has said that price hikes are inevitable, with some sources saying “virtually every major brand” has plans to increase prices by double digit percentage points.
Jon Cox, an analyst at Kepler Cheuvreux, said that a Nestlé price increase was likely.
He added “Their biggest businesses in the UK are chocolate and coffee and those commodities are obviously not produced in the UK, so Nestlé is probably going to have to increase prices at some point.”