A personal anecdote: When I woke up on the morning of June 24, I was nearly 10 percent richer than I was the day before. No, a wealthy aunt didn’t die. Instead, as an American who was in the United Kingdom during the Brexit, that’s how much more valuable my US currency became after the pound plummeted.
Now, I am just one man (with an insubstantial savings account), but for many UK businesses – and entire industries – the pound hitting a 30 year low against the dollar had a big impact. As Bloomberg reports, British coffee companies are getting hit especially hard since roasters in the UK pay for raw imported beans in US dollars.
Anette Moldvaer, owner of London’s Square Mile Coffee Roasters, said a second payment on Costa Rican beans she made ended up being about $7,500 more expensive post-Brexit. “We ended up paying a lot more for our green coffee,” she lamented. “We kind of got caught in the middle of it as far as our payments were concerned.” The result: The brand has raised prices on some 12-ounce bags of coffee 50 pence, a jump of around 3 to 5 percent.
Jeremy Challender, owner of London’s Prufrock Coffee, said if the pound doesn’t recover, things will probably get worse. “Roasters are buying large quantities of green coffee that last them 6 to 12 months,” he told Bloomberg, meaning roasters next big orders, coming around Christmas, could be their priciest yet.
That said, as Moldvaer stressed optimistically, “The cost of coffee is always volatile.” Not, apparently, as volatile as the British voting public, but volatile nonetheless. And thankfully for Brits, the whole country is far more into drinking tea than coffee, meaning the people bearing much of the brunt of the price increase are, ironically, American coffee addicts in the UK like yours truly.