Snacks are getting smaller as Brexit bites prices
(CNN Money) – It’s called the Brexit diet.
Some of Britain’s most popular snacks are shrinking in size while their price stays the same. The reason: Companies are trying to make up for the plunge in the value of the pound and rising commodity prices.
Mars has cut down the size of the bags of M&M and Maltesers in the UK, while PepsiCo (PEP) decided to shrink packages of Doritos chips and other products.
“We have been absorbing rising raw material and operational costs for some time, but the growing pressures mean that we can’t keep things as they are,” a spokesperson for Mars said last Thursday (April 6).
PepsiCo said the downsizing is a result of “factors such as fluctuating foreign exchange rates, which are impacting the cost of ingredients and materials.”
A sharp decline in the value of the pound following Britain’s vote to leave the EU has pushed up prices of many imported goods, from food to electronics.
The pound has dropped 17% against the dollar since the referendum last June.
Commodities including cocoa are priced in dollars, so British producers are paying more for them. And factory costs have also gone up significantly in recent years.
Mondelez International (MDLZ) sparked outrage late last year after it changed the shape of its popular Toblerone bar. By adding space between the triangles, the company was able to keep the bar’s original packaging and length, but reduce the amount of chocolate.
Mondelez blamed rising ingredient prices for the change.
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Top: A CNN Money image showing the Brexit bite.
SOURCE: CNN Money written by Ivana Kottasova
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