Brexit- Britain leaving the EU meant a massive drop for the pound. Because of this materials will be more expensive to buy in the UK.
The exchange rate changes and the pound drops it will cost more to important ingredients as the pound is weaker than the USD due to Brexit. For companies, they will have to spend more to buy materials in UK (Sharon Bailey, 2016). 1Globalisation- Soft drinks are available all around the world. Due to this to buy ingredients companies of American origins that trade in us dollars. By doing this, they can lose money by having to change currencies so much it can mean money can be lost.
For example, once the Brexit decision was made the pound dropped. Meaning a weak pound “buys fewer dollars” (BBC News, 2016). 2 Inflation- Inflation is a “rapid increase “of prices in an economy (Business Dictionary, 2017)3. From 2015 to 2016 increased from “0%” to “0.7%” in the UK (Inflation rates, 2017)4.
For the soft drink market, this means increasing of price as the ingredients get more expensive the standard price of a soft drink would go up. This means they will need to spend more money for the same ingredients. Bitcoin- Due to the bitcoin bubble many big brokers have invested into bitcoin to see a return, broker such as “Grant Sabatier” (Grant Sabatier, 2017)5. As a bitcoin has taken a lot of investors as 1 bitcoin is equivalent to “$16,495.84” Us dollars (Coindesk, 2017)6.
Due to this fewer investors are looking to invest in the bitcoin as the value is always increasing rather than soft drinks as that market fluctuates 1 Sharon Bailey. (2016). Will Brexit Impact Soda Giants’ Fiscal 2016 Performance?. Available: https://www.youtube.com/watch?v=yjdRjTRoMe0. Last accessed 28/11/2017 2 BBC News.
(2016). Pound plunges after Leave vote. Available: http://www.
bbc.co.uk/news/business-36611512. Last accessed 05/12/17.3 Business Dictionary . (2017). Inflation Defintion . Available: http://www.
businessdictionary.com/definition/inflation.html. Last accessed 13/12/2017.4 Inflation rates. (2017).
United Kingdom Inflation Rate History – 2007 to 2017. Available: https://www.rateinflation.
com/inflation-rate/uk-historical-inflation-rate. Last accessed 13/12/2017.5 Grant Sabatier, Contributor. (2017). Bitcoin millionaire: Don’t invest in bitcoin. Available: https://www.
cnbc.com/2017/12/11/bitcoin-millionaire-grant-sabatier-dont-buy-bitcoin.html. Last accessed 13/12/2017.6 Coindesk.
(2017). Bitcoin value . Available: https://www.coindesk.com/price/. Last accessed 13/12/2017.