UNILEVER’S finance chief has insisted the collapse in sterling is behind a rise in the prices of its popular products – a day after the firm was accused of “exploiting consumers” amid a row with Tesco.
Speaking as the group’s third-quarter results were released, chief financial officer Graeme Pitkethly said: “In the UK, which accounts for five per cent of turnover, prices should start to increase to cover the cost of imported goods due to weaker sterling.”
However, he added that he is confident the dispute with Tesco will be “resolved very quickly” and said that other Unilever customers have accepted price hikes.
The group, behind brands such as Marmite, Flora and Persil, is believed to have demanded a 10 per cent price rise due to the falling value of sterling, halting deliveries to Tesco when it refused to pay the extra.
Since the EU referendum on June 23, the pound has lost nearly 18 per cent of its value against the dollar.
The stand-off has left the supermarket facing a shortage of brands such as Surf washing powder, Comfort fabric conditioner, Hellmann’s mayonnaise, Pot Noodle and Ben & Jerry’s Ice Cream.
Pitkethly’s comments came as Unilever reported a rise in sales in the third quarter, helped by price increases.
The British-Dutch multinational said underlying sales rose 3.2 per cent in the period, with total sales worth €13.4 billion. However, the firm added that it took a hit from currency movements.
Earlier this year, Unilever posted profits of around £2bn for the first half of 2016.
Chief executive Paul Polman warned in June that a vote to leave the EU’s single market would increase prices for consumers.
But MPs condemned Unilever, saying the company was using Brexit as an excuse to exploit consumers.
Shares in both companies took a hit as a result of the spat.
Tesco declined to comment further, repeating the statement issued late on Wednesday, in which it said it hoped to “have this issue resolved soon”.
It is understood Unilever is in active discussions over price rises with the other major supermarket chains, but Tesco’s fellow Big Four grocers declined to comment on the issue.
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