Nestle, one of the world’s largest food and beverage companies, is planning to increase prices again this year as they grapple with food inflation and the surging cost of ingredients.
The Swiss conglomerate, famous all over the globe for brands such as KitKat, Nescafe, and Maggi seasoning, reported “modest” profits of £8.42 billion pounds in 2022. This was a few billion shy of what analysts predicted and has been largely attributed to rising costs.
The company has also announced the closure of some production facilities in the UK which will result in hundreds of job losses.
Nestle is not the only manufacturer rising prices. In January, food prices were up 16.7% from a year ago. As well as surging energy prices, British consumers are struggling to make ends meet as monthly bills go through the roof but their wages remain stagnant. The UK government and central bank has responded with interest rate hikes to combat inflation but this isn’t helping people pay their bills.
THINK LIKE AN ECONOMIST!
Q1. How is profit calculated?
Q2. Using a diagram, explain the cause of the soaring inflation in the UK.
Q3. Explain why people are losing jobs.
Q4. Discuss the impact of interest rate hikes to combat inflation and improve people’s living standards in the UK.
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