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Happy Brexit Christmas! Prices stay even... for now
[LONDON] The bill for Christmas dinners in Britain is mostly unchanged from last year, experts said, even though the higher price of imported raisins will hike the cost of Christmas puddings by 21 per cent.
But the respite may be short-lived as supermarkets, which are locked in a bitter price war, are likely only delaying until next year Brexit-induced increases due to the plunging pound, they warned.
"The overall cost of our favourite meal is set to be more expensive, up by 1 per cent year-on-year, but still lower than in 2013 and 2014," a study by British market research firm Mintec found this week.
Since Britain voted in June to leave the European Union, there has been an 18 per cent fall in the value of the pound against the euro and dollar, leading to an increase in the cost of imports.
So far supermarkets are taking the hit, with the price of celebratory drinks such as Champagne from France and Prosecco from Italy staying stable.
"There hasn't been much impact so far despite the falling exchange rate," says Toby Magill, an alcohol expert at market research company IRI.
"The retailers haven't put up their prices." With desserts, the plummeting pound has seen the cost of British-made Christmas pudding soar by 21 per cent.
The increase is due to the higher cost of ingredients: raisins, butter, flour and sugar, according to the study.
But the centrepiece of a traditional Christmas dinner - the turkey - has seen a 2-per cent price fall since last year when prices were higher on the back of fears over avian flu, it said.
Food retailers are expected to see sales growth of 2 per cent during the festive season compared to last year, an analysis by Fung Global Retail and Technology predicted.
According to the October report, the sector has registered "five consecutive months of positive growth... and growth has strengthened sequentially over the most recent three months." "We anticipate no drag on retail sales this Christmas from the Brexit vote in June," the report adds.
Such a scenario could benefit national producers who are trying to take advantage of the fall in the pound, by promoting local foodstuffs produced and sold in sterling.
The National Farmers Union has launched a campaign calling on citizens to support British products, perhaps tapping into an uptick in patriotism brought on by the Brexit referendum.
The Union is ready to direct Britons towards nearby turkey farms, as well as local producers of cheese and sparkling wine.
Brussels sprouts recipes are also provided as part of the guidance to have the best "100 per cent British" Christmas.
But once the last crumbs of the Christmas pudding have been cleared, Mr Magill said the start of the new year could see an end to the price war and all supermarkets increasing prices.
"They will get through Christmas and the price rises will happen next year," he said, sharing the government's view that the post-Brexit economic hit will be unavoidable in 2017.