The thread for pointless arguments about Brexit

Thrugelmir

michaels wrote: »

There seem to be an awful lot of scared 'Little Europeans' who are happy to hide behind high tariff walls, molleycoddled by a social protection safety blanket, terrified of being truly international. Of course it is nothing to do with the fact they are racist and only like to trade with white christian europeans rather than people who might have darker skins or different religions.

Learnt today that clothes imported into the EU from Bangladesh suffer 0% import duty while clothes from India do incur taxes. Seems as if the Indians are happy to talk trade. As the UK is their biggest export market.

wotsthat

michaels wrote: »

Care to tell me how much of the price of a tin of tuna in Tesco's depends on the price of tuna on the world market in dollars? With a drop in the excahnge rate of what about 6% compared to what it was before the 'the vot eis lost' sterling rally how much will that add to a £1 tin - about 2p at most?

Let's say sterling has fallen by 6% and not argue the toss (I think some more of the 2016 weakness is down to the whole Brexit uncertainty but whatever).

Your can of tuna has increased by 6p. Margin is maintained by % & not cash.

Landed warehouse cost 67p. Supplier makes 15% and sells to Tesco at 77p, Tesco make 30% and sell at £1.

The landed warehouse cost* has increased by 6% to 71p, Supplier makes 15% and sells to Tesco at 82p, Tesco make 30% and sell at £1.06.

* Tuna/ Salmon will be delivered in finished cases and shipping is in US$. Port health costs , inland freight, ops costs etc are sterling but they'll be a relatively small part of the product cost.

The reality is it'll be more like 9p because £1.09 is a better price point than £1.06 and you may as well kitchen sink it and blame it on Brexit to build in some headspace.

This is possible because there's not as much competition as people think. People are retailer loyal plus they're confused by promotions, spring water packed, pole & line, brine, spring water, chunks, flakes etc.

michaels

wotsthat wrote: »

Let's say sterling has fallen by 6% and not argue the toss (I think some more of the 2016 weakness is down to the whole Brexit uncertainty but whatever).

Your can of tuna has increased by 6p. Margin is maintained by % & not cash.

Landed warehouse cost 67p. Supplier makes 15% and sells to Tesco at 77p, Tesco make 30% and sell at £1.

The landed warehouse cost* has increased by 6% to 71p, Supplier makes 15% and sells to Tesco at 82p, Tesco make 30% and sell at £1.06.

* Tuna/ Salmon will be delivered in finished cases and shipping is in US$. Port health costs , inland freight, ops costs etc are sterling but they'll be a relatively small part of the product cost.

The reality is it'll be more like 9p because £1.09 is a better price point than £1.06 and you may as well kitchen sink it and blame it on Brexit to build in some headspace.

This is possible because there's not as much competition as people think. People are retailer loyal plus they're confused by promotions, spring water packed, pole & line, brine, spring water, chunks, flakes etc.

I only buy at 2x4pack for a fiver.....

mystic_trev

michaels wrote: »

I only buy at 2x4pack for a fiver.....

I think I'll stick to sardines.

wotsthat

michaels wrote: »

I only buy at 2x4pack for a fiver.....

That's the best thing to do. The singles are only there as a price anchor to make the multipacks look cheaper.

globalds

wotsthat wrote: »

The reality is it'll be more like 9p because £1.09 is a better price point than £1.06 and you may as well kitchen sink it and blame it on Brexit to build in some headspace.

This is possible because there's not as much competition as people think. People are retailer loyal plus they're confused by promotions, spring water packed, pole & line, brine, spring water, chunks, flakes etc.

Aldi ..Just choked on their home brand cornflakes at the idea of a 10% rise.

The supermarkets are sitting staring at each other waiting for the first to blink ..They won't even put fuel up ..And that should be up a couple of pence already.

The consumer will not be taking an instant hit on any marginal cost increases due to currency fluctuations.

Interesting to see that in all the noise China devalued it's currency.

The race to the bottom is still on and we made a smart move ..Just sent deflation into any market we sell to and are now importing inflation .
Or is that not the idea now ?

wotsthat

globalds wrote: »

Aldi ..Just choked on their home brand cornflakes at the idea of a 10% rise.

The supermarkets are sitting staring at each other waiting for the first to blink ..They won't even put fuel up ..And that should be up a couple of pence already.

The consumer will not be taking an instant hit on any marginal cost increases due to currency fluctuations.

Interesting to see that in all the noise China devalued it's currency.

The race to the bottom is still on and we made a smart move ..Just sent deflation into any market we sell to and are now importing inflation .
Or is that not the idea now ?

Aldi are cheaper for one reason - their margins are lower because they're more efficient and aren't as greedy. They are no less immune to price changes than anyone else.

Fuel will go up. You know how it works - just takes one and the others follow.

I don't know about the race to the bottom - we were only asked about leaving the EU.

globalds

wotsthat wrote: »

Aldi are cheaper for one reason - their margins are lower because they're more efficient and aren't as greedy. They are no less immune to price changes than anyone else.

Fuel will go up. You know how it works - just takes one and the others follow.

I don't know about the race to the bottom - we were only asked about leaving the EU.

Aldi are cheaper because it is a strategy.They need to be more efficient and have smaller margins ..But currency fluctuations will not change their strategy.

The fuel thing ...Fuel might not go up ..you know how it works ..It just takes one not to blink.

The race to the bottom..Google Endaka Fukyo to see what happens when you have a strong currency in fact we are back at 100 Yen to the Dollar so we once again will have Endaka being shouted from the rooftops of Tokyo

gfplux

wotsthat wrote: »

Let's say sterling has fallen by 6% and not argue the toss (I think some more of the 2016 weakness is down to the whole Brexit uncertainty but whatever).

Your can of tuna has increased by 6p. Margin is maintained by % & not cash.

Landed warehouse cost 67p. Supplier makes 15% and sells to Tesco at 77p, Tesco make 30% and sell at £1.

The landed warehouse cost* has increased by 6% to 71p, Supplier makes 15% and sells to Tesco at 82p, Tesco make 30% and sell at £1.06.

* Tuna/ Salmon will be delivered in finished cases and shipping is in US$. Port health costs , inland freight, ops costs etc are sterling but they'll be a relatively small part of the product cost.

The reality is it'll be more like 9p because £1.09 is a better price point than £1.06 and you may as well kitchen sink it and blame it on Brexit to build in some headspace.

This is possible because there's not as much competition as people think. People are retailer loyal plus they're confused by promotions, spring water packed, pole & line, brine, spring water, chunks, flakes etc.

Thanks whatsthat,
For a lesson in the real world economics.
It's 20 years since I was one of those guys who imports good with or without tariffs who buys in one currency and sells in another, that hold margin or suffer a reduced margin only to see the retailer blame commodity or currency changes in the world to increase their margin on my product.
Hey ho that how the world works.

gfplux

For those who think fuel should go up or not.

Anyone buying and selling goods bought not in sterling hedges the currency.
That means buying the currency at the time of order to fix margins based on the final selling price.
So the change in £/$ will not effect the price at the pump now as the dollars were bought some time ago to pay for the fuel.
However contracts being placed today for fuel (I was in the shoe business so the same applied) the dollars will be bought at today's rate for delivery in a few months to pay when the goods are delivered.
The company will take a "view" as when to cover the currency. They might wait a few days or longer.
Some company's have internal rules that say a buyer/salesman MUST cover the currency within 6 or 24 hours of the contract being placed.
Some company's even have that rule but the "treasury" department may have their own profit centre where they buy and sell currency independently form the buying and selling of goods.