With everything that is going on in the world at present it is understandable that the money markets are in a state of flux. No more than Sterling. With the Brexit vote in June, an initial rally led to a devaluation of over 20% v The Euro and US Dollar, and nearly 30% v the New Zealand Dollar. This is naturally going to feed into pricing of all imported goods, as we’ve seen in the press with the likes of Tesco ‘Marmite Gate’ and Apple’s 15% price rise.
The majority of wine is imported from either Europe or South America, so increases are inevitable. New Zealand will be even bigger as Sterling has floundered badly against its Dollar.
Couple the currency differential to the rise in road fuel, again due to the strength of the US Dollar, and we get a double whammy. You will have noticed at the pumps the rise of nearly 15% in recent weeks, adding to the costs of all imports.
So how much is wine going to go up ?
As far as we are concerned we have enough stocks and currency to see out Christmas and New Year.
So NO increases until 2017 (Jan 9th to be precise).
If we based it on today’s exchange rate (approx 1.10 v Euro and 1.20 v US Dollar) we would see a £6.99 wine rise by roughly 45 pence – a percentage increase of 6.5%
The currency drop only affects the wine cost not the duty – which is a large part of the cost mechanism.
And New Zealand ?
Unfortunately more, a £7.99 wine would probably see an 80 pence increase or 10%.
There are so many things that affect currency trading. US Election – could be huge, the Syrian conflict and the Russian influence, elections in Europe – with right wing factions seemingly gaining popularity, the Euro ideal is starting to crack and the possible financial instability of Eurozone members, namely Greece and Italy, who are rumoured to need additional funds from the ECB.
All of those factors could benefit Sterling over the next 2-3 months, so we could see a revival of rates, which would ease the situation.
So – NO INCREASES UNTIL 2017
Makes sense to shop at MOMENTUM.