13 October 2016 by lberuti
Fears that the uninterrupted fall in the british pound will lead to price increases in some products got more real yesterday as the “marmitegate” came to light. TSCOLN ( Tesco Plc) and UNANA ( Unilever Plc) are locking horns over who shall bear the burden, as many of UNANA’s products have become more costly to the British buyers. It will be shared between UNANA and its suppliers on the one hand, and TSCOLN and the end customers on the other hand. But the grocer feels it and its customers are being asked to shoulder to much of the pain. TSCOLN is resisting UNANA’s attempt to lift prices, and the dispute has promptly led to a disruption of the supply of some popular brands to the supermarket chain, making Marmite and Pot Noodle a rare sight on TSCOLN’s shelves. Investors have been wary of such situations. Consequently, they have marked UK retailers’ risk premia wider across the board, since UK and European leaders have adopted a harder stance regarding Brexit.
Meanwhile, the broader credit market is still finding it difficult to go wider. Once again credit indices ended hardly changed on the day, and implied volatility of credit options is going down as a result.