BUSI­NESS Tesco gets Mar­mite af­ter Unilever drops price rise amid boy­cott threat

Weekend Argus (Saturday Edition) - - FRONT PAGE - SEAN POUL­TER

LON­DON: Mar­mite, PG Tips, Hell­mann’s and other fam­ily favourites will go on sale again at Tesco af­ter man­u­fac­turer Unilever axed blan­ket price rises fol­low­ing threats of a shop­per boy­cott.

Unilever re­treated amid wide­spread out­rage af­ter it blamed Brexit for a 10 per­cent price rises on dozens of brands.

It is a hu­mil­i­at­ing U-turn for the firm, whose share price lost £ 3 bil­lion ( R51bn) dur­ing the furore.

The com­pany was ac­cused by su­per­mar­ket in­sid­ers of us­ing Brexit as a smoke­screen to jus­tify the price rises af­ter it claimed a fall in the value of the pound had put up the cost of im­ported prod­ucts and in­gre­di­ents.

But an in­sider at an­other su­per­mar­ket told the Mail Unilever’s claims were a red her­ring, point­ing out many Unilever prod­ucts, such as Mar­mite, are made in Bri­tain and are there­fore largely im­mune to cur­rency fluc­tu­a­tions.

He added: “The ag­gres­sive man­ner in which they at­tempted to im­pose blan­ket price rises was very dif­fer­ent from other man­u­fac­tur­ers.”

Asked whether it was black­mail, he said: “They were cer­tainly us­ing their very heavy bar­gain­ing power. Some peo­ple might de­scribe it as anti-com­pet­i­tive.

“The catch- all claim that these rises had been driven by Brexit and the fall in the value of the pound did not stand up to scru­tiny. This was a smoke­screen to cover much wider in­creases than were jus­ti­fied.”

The pound has fallen by about 14 per­cent against the euro and 17 per­cent against the dol­lar.

But Unilever’s profit on sales is 15 per­cent, putting it in a stronger po­si­tion to ab­sorb higher costs than Tesco, whose mar­gin is 1.7 per­cent.

When Tesco chal­lenged Unilever’s across- the- board price rise, it was told to ”lump it”. But the su­per­mar­ket called the man­u­fac­tur­ing gi­ant’s bluff and re­fused the ul­ti­ma­tum.

Unilever, which made prof­its of £2bn dur­ing the first half of this year, stopped sup­plies of 200 prod­ucts in­clud­ing Dove, Flora, Pot Noo­dle, Ben & Jerry’s, Knorr and Ber­tolli, leav­ing short­ages on shelves.

How­ever, its heavy-handed ap­proach prompted a cam­paign for peo­ple to stop buy­ing its prod­ucts, pro­moted on Twit­ter with the hash­tag # Boy­cottUnilever. In the face of con- sumer fury and a grow­ing PR dis­as­ter, the An­glo-Dutch com­pany, which is worth more than £100bn, back­tracked last night and an­nounced a new sup­ply deal with Bri­tain’s big­gest su­per­mar­ket.

It said: “Unilever is pleased to con­firm the sup­ply sit­u­a­tion with Tesco has been re­solved. We have been work­ing to­gether closely to reach this res­o­lu­tion and en­sure our much- loved brands are once again fully avail­able.

“For all those that missed us, thanks for all the love.”

The de­tails of the deal are se­cret. But it seems likely that a more lim­ited range of price in­creases will be ap­plied over the com­ing months.

Tesco said: “We al­ways put cus­tomers first and we are pleased this has been re­solved to our sat­is­fac­tion.”

The news ap­pears to be a vic­tory for Tesco boss Dave Lewis, who spent more than 20 years at Unilever be­fore join­ing the su­per­mar­ket. – Daily Mail

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.