Marmite runs low in Brexit price row
PG Tips and Hellmann’s also face ban on deliveries
TOP brands including PG Tips, Hellmann’s and Marmite are running low at Tesco because of a row with a supplier.
The products are made by Unilever, which is understood to have halted deliveries to the supermarket after a dispute over prices linked to the falling pound.
The consumer giant, which also owns Dove, Ben & Jerry’s ice cream, Knorr, Bertolli, Flora, Persil, Surf, Comfort fabric conditioner and Pot Noodle, is rumoured to have been pushing retailers for price rises of up to 10 per cent.
It appears to be blaming the Brexit vote and the resulting weak pound, which has made it costlier to import ingredients.
However, analysts claimed many of the products involved are made in Britain from ingredients produced here.
Tesco, which has already pulled some Unilever brands from its online store, is locked in a vicious price war triggered by the rise of discount chains Aldi and Lidl.
It recently boasted that its prices are down by 6 per cent compared with two years ago, saving average families more than £300 a year.
Tesco bosses have laid off thousands of backroom staff, moved its HQ and abandoned the opening of new superstores to cut costs.
They are now determined not to allow suppliers to dictate price rises that will let budget chains poach customers. Aldi and Lidl do not face the same pressure as mainstream supermarkets, as they rely on own-label products rather than big brands.
The row is embarrassing for Tesco chief executive Dave Lewis, who previously held a top job at Unilever. He recently told The Grocer magazine: ‘We would be very challenging with anybody who was thinking of taking an exchange rate move to justify a price increase just on the back of that alone.’
The two companies have refused to publicly confirm the reason for the shortage of Unilever brands on Tesco shelves.
Tesco said on Twitter: ‘We’re currently experiencing availability issues on a number of Unilever products. We hope to have this issue resolved soon.’
In a statement, the store added: ‘We always work to ensure customers get the best possible prices.’
It is believed Unilever has also approached other retailers. A source at another supermarket group said the company had threatened to cut off its entire supply unless it agreed to an across-the-board price increase of 10 per cent. He said the chain would con- sider banishing Unilever products from its stores rather than comply with the ultimatum.
Bryan Roberts, a retail analyst at TCC Global, told The Guardian Unilever’s behaviour was not surprising and said other suppliers could follow suit.
Unilever declined to comment on the accusations.
The British-Dutch firm was among the businesses which warned about the dangers of a Brexit vote before the EU referendum, provoking allegations of scaremongering.
Bosses wrote to employees, saying: ‘It is not for us to suggest how people might vote ... but in taking this hugely important and irreversible decision, we feel a responsibility to point out that Unilever ... would, in our considered opinion, be negatively impacted if the UK were to leave the EU.’
Tory MP Sir Gerald Howarth said: ‘I think it will be very damaging to the reputation of Unilever if they seek to use the fall in the pound to exploit the consumer. Clearly products which are not dependent upon imports into the United Kingdom will not be affected by the fall in the value of the pound.’