The Tesco boss is warning brands against post-Brexit price increases

Tesco boss Dave Lewis warned international goods suppliers not to impose price increases on UK consumers.

He said some companies were seeking to raise prices to counter the falling pound’s impact on their global revenue, indicating such a move was not “justified.”

“I spent 28 years working in a multinational and there are always elements of currency volatility in businesses like that,” Lewis told reporters on Thursday at briefing at Tesco’s headquarters.

“When there is devaluation, what multinationals do is they present sales at constant and current exchange rates,” he said.

“And the City completely understands it, they don’t devalue a stock because of that, they understand it’s part of the volatility of being in many countries,” Lewis said.

“The only thing we would ask is that companies in that position don’t ask UK customers to pay inflated prices in order that their reporting currency is maintained. They don’t do that to countries outside of the UK.”

The pound fell 18% against a trade-weighted index of currencies after the vote to leave the European Union in June.

The move is already starting to have an impact in the UK, with the prices of many household brands shooting up as the value of the pound falls, and goods cost more to import.

Tesco boardBen Moshinsky/Business InsiderDave Lewis (far right) with other Tesco executives at the event Business Insider attended.

Apple has increased the prices of its laptops by hundreds of pounds, Typhoo — one of the UK’s most popular tea brands — was forced to raise the price of its teabags, and goods company Unilever raised the wholesale prices of many of its products, including Marmite and Pot Noodle.
The price increases sparked a dispute between Tesco and Unilever, with the former threatening to take the latter’s brands off its shelves.

Lewis, who worked at Unilever for 28 years before joining Tesco as CEO, added there was room for negotiation: “There’s pressure. Some of it is justified and if we can’t offset it then we work out how it is we can accommodate that between ourselves and indeed our partners.”

Higher prices and smaller food portions look set to become the norm. Ben Broadbent, a deputy governor at the Bank of England said there would ben”significant upward pressure on import prices” in a speech on Friday.

Broadbent said the pound’s 11% plunge against the dollar shortly after the June referendum was the fastest depreciation since 1967.

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