Which piece was written by the accountant?

On the Unilever, Tesco, Marmite matter.

One of these extracts was written by a trained and experienced accountant. The other was not.

Reports are widespread today that Marmite supplies to Tesco are at risk. The reason is that its manufacturer, Unilever, wants to impose price rises of up to 10 percent. It is partly blaming the movement in the pound in the last couple of weeks or so. Tescos is resisting, pointing out that many Unilver products are made in the UK and so the currency movement should not have had much impact.

But that’s not true for Unilver. It accounts in euros. So every sale made in pounds is a loss to it. It’s not, as far as it is cncerned, making money on Marmite now and it’s fighting back in the way it thinks best.

And:

Which is fine–making a profit is the aim and purpose of being in business and if they’ve the market power to be able to do it then they should. Doesn’t mean that we have to put up with it of course. And we can also do a little calculation to see whether they are being reasonable. Net margins are around 15% for the group. The pound has fallen 20% odd. Their costs, revenues and margins are all static in sterling terms. So, the loss to their bottom line (ignoring the small exports of Marmite) on Marmite is 0.15 x 0.20 of their Marmite sales. Or, their profits on Marmite have fallen by 1.5%. On the back of which they want to push through a 10% price rise?

Who had the accountancy training and has the experience?

23 thoughts on “Which piece was written by the accountant?”

  1. He’s also had a go at trying to understand the tech industry, it’s a good job Ritchie is an expert on absolutely everything.

  2. @ Noel

    That’ll be a fucking car crash then. He has a hard time understanding the production of physical goods. Intangible goods like software will leave him dribbling.

    He’ll be arguing that a tax is needed on the ones in binary code or some shit.

  3. Guido has a piece which rather suggests that CHF ather than EUR would apply so that’s one candid mark against the first piece. The second para is the clincher, though, with cncerned as a bonus clue.

    It must be terrible to be able to think up cogent and persuasive stuff more quickly than one can get it onto one’s kyrbrod.

  4. I know several people who work for footwear suppliers to Tesco, Walmart etc. The retailer and supplier are constantly using any excuse to fuck each other over on price. GBP depreciation gives them a nice excuse to demand this 10% hike that they were after anyway. Tesco are apparently the biggest cunts and will happily break contract agreements knowing that if the supplier doesn’t back down, then losing Tesco as their main customer will see them go under. This case is most interesting for me because unilever wont be screwed over like some small shoe importer will be.

  5. That’s another thing about that particular “trained” practitioner – inability to admit an error.

    In fairness, it’s a difficult one for him, there are only so many hours in the day.

  6. I think the answer to the question is that neither piece was written by an accountant:

    Tim’s because, well, as far as I know he’s not qualified.

    Murphy’s because, although he may hold a qualification, he has shown himself to be “disqualified by experience” (and probably by incompetence and inaptitude too).

  7. Donguan John,

    I think anyone who’s ever had to deal with a supermarket chain as a customer would agree with that. Their whole business models seems to be based on screwing their suppliers over. They will continously ask for new discounts which they will label as temporary but that then tend to become the new baseline. There is just no way that any supplier would have agreed to that kind of discounts in a single negotiation but they get you there in small steps so that your marginal cost is (or appears) low at each step.

  8. Emil, one of the cuntish things Tesco do to their importers is cut them out as a go between for the good factories. Making shoes is actually surprisingly complicated and Tescos don’t actually have a clue about it (although the 20 something know it alls working there think they do) so they use 3rd parties to do all the hard work with the factories. Occasionally the 3rd party finds a competent and reliable factory, then, in breach of contract, Tesco will swoop in and deal with them directly cutting out the 3rd party. The 3rd party complain and get told to fuck off… “sue us and we’ll drop you and you’ll lose 90% of your business”. Absolute shit bags.

  9. Do Waitrose sell Marmite or an own-brand substitute? This is a play off between the supermarkets and the big brand houses, such as Uni, P&G and Reckit. The brands have been coining it over the last few years at the expense of the Tescos and Sainsburys. Lidl and Aldi have crept into the gap. Maybe it’s time for the brands to feel the pain.

  10. @ Diogenes
    As a non-eater or Marmite I don’t know whether Waitrose, to which I only occasionally walk 3 miles, does a own-brand on Marmite, but I suggest that, since Waitrose aims to be up-market, it has less scope for cheap own-brands than Tesco or Morrisons – some of its own-brands are relatively expensive.

  11. There’s vegemite but other than that I’ve not seen an alternative to marmite, there was some stories about it being banned locally here but it’s still on the shelves

  12. @Emil, October 13, 2016 at 2:47 pm
    Donguan John,
    I think anyone who’s ever had to deal with a supermarket chain as a customer would agree with that. Their whole business models seems to be based on screwing their suppliers over.

    @Dongguan John, October 13, 2016 at 3:06 pm
    …you’ll lose 90% of your business”.

    Nothing new in that behaviour. Woolworths were doing it in the 1960s & ’70s to their Woolco brand suppliers/manufacturers. I’m sure M&S etc were doing the same “..we are 90% of your business, accept our remuneration or bankrupt..”

    .
    @BniC, October 13, 2016 at 6:34 pm

    There’s vegemite but other than that I’ve not seen an alternative to marmite, there was some stories about it being banned locally here but it’s still on the shelves

    Here is one:
    Tesco Yeast Extract 225G

  13. And Unilever has folded. It’s becoming a contest between Waitrose and Lidl/Aldi (given the family links)

  14. John Square/ Noel Scoper

    Reminiscent of a piece of his on Bitcoin advocating it being banned – which drew the classic zinger.

    ‘There is a lot of apparent wealth here and that needs to be taxed’

    For him the taxation is in of itself intrinsically a good thing….

  15. Supermarkets are terrible customers, they will decide put your product on sale, demand a discount from the supplier and even bill for advertising the sale, if you don’t like tough luck.

  16. Yes, M&S were just like that back in the 80’s, 90’s.

    Many many anecdotes from the textile trade…the strategy seems to have been to play nice and buy more and more of your output, then when they’re 90% of your business they find some trifling “quality problem” (a customer has complained – just one was enough, apparently), and well they will go on dealing with you if you drop your prices by 30% or something, otherwise you’re off the shelves in a week and down the job centre in two.

    They’re all the same.

  17. “Or, their profits on Marmite have fallen by 1.5%. On the back of which they want to push through a 10% price rise?”

    But they will need to increase sales price by 3.8% to maintain Euro profit in cash.

  18. There’s no vacancy for Murphy up here.

    The position of batshit lunatic economist for Scotland has already been filled by the moronic George Kerevan MP (SNP).

    Typical quote from our home-grown Guy Fawkes:

    “Popular, if often incoherent, opposition to this mad, mad system has suddenly boiled over into open revolt. Not enough revolt, in my opinion, but a line has been crossed. The neoliberal order needed dismantling”

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