By Patrick Munnelly, Market Analyst, Tickmill
The FTSE 100 is in the red again, finishing the session down 56 points at 7570.87.
The index was led lower by the famous red can drinks maker Coca Cola [LON:CCH], sitting at the bottom of the blue chip index nursing losses of just under 5%. A series of strikes at Coca Cola Europacific Partners (CCEP) could potentially lead to shortages of some of the UK’s popular soft drinks this summer.
Workers at the largest soft drinks plant in Europe, located in Wakefield, have voted in favour of industrial action by an 87% majority. The strikes are in protest of a pay offer that fails to address the ongoing cost of living crisis. The workers are planning to carry out 14 days of strikes between Thursday, June 8, and Thursday, June 22.
The Unite general secretary, Sharon Graham, stated that Coca Cola Europacific Partners is generating billions in profits while offering its workers a pay cut. The company’s profits have increased by 37%, reaching a staggering £1.85 billion. The decision to reduce real wages despite booming business is seen as corporate greed, leading to worker dissatisfaction.
Unite, the union representing the workers, fully supports the workforce at the Wakefield plant. The strikes highlight the frustration among workers who feel that their contribution to the company’s success is not being fairly rewarded. The potential industrial action raises concerns about the availability of popular soft drink brands during the summer months.
On the positive side of the ledger, Centrica [LON:CNA] shares have been rewarded by gains of over 2% as The U.K. energy regulator, Ofgem, has announced a significant reduction in the country’s price cap, cutting it by 37% to £2,074 per year starting from July 1.
This new price cap applies to dual-fuel, direct-debit customers and represents a substantial decrease of £1,206 from the current cap of £3,280. The reduction is in response to recent declines in wholesale energy prices. The price cap is a measure of how much consumers would pay on their energy supplier’s basic tariff if there were no energy price guarantee in place. The current price guarantee is set to remain in effect until the end of March 2024, providing consumers with protection by capping their bills at £2,500.
Ofgem has outlined its plans to announce the next quarterly price cap in August. The regular updates to the price cap ensure that consumers are shielded from excessive energy costs and reflect changes in wholesale prices. The latest reduction in the price cap is expected to bring some relief to households by reducing their energy bills.