Popular brands are heading back to the shelves at Tesco stores after a stand-off between the retailer and food giant Unilever.
Unilever was understood to have been demanding a 10% hike in the price of products including Marmite, Hellmann’s mayonnaise and Flora spread following the collapse in the value of the pound in the wake of the Brexit vote.
It said other retailers had accepted price rises. But Tesco refused to play ball – accusing Unilever of “exploiting consumers” – and Unilever halted deliveries to its stores.
However, tonight Unilever confirmed the “supply situation” with Tesco involving the price of Marmite and other products had been “successfully resolved” and that the items were “once again fully available”.
What did Unilever say?
Unilever chief financial officer Graeme Pitkethly saids it needed to increase prices in the UK to cover the cost of imported goods such as dairy products due to weaker sterling.
Since the EU referendum on June 23, the pound has lost nearly 18% of its value against the dollar.
Unilever chief executive Paul Polman warned in June that a vote to leave the EU’s single market would increase prices for consumers.
What does it mean for the shopper?
The stand-off meant Tesco stores face a shortage of Unilever products.
However, other retailers accepted Unilever’s argument for a price rise and continued to stock the firm’s products.
Poundland worked the spat to its advantage, with freshly-printed shelf tickets in stores reassuring customer that there is “No shortage of Marmite here!!”
Which other products were affected?
Unilever reckons that 9% of UK households have one or more of its 40-plus brands in their kitchen cupboards and bathroom cabinets.
Unilever brands include Bertolli, Comfort, Domestos, Dove, Flora, Hellmann’s Knorr, Lipton, Lynx, Magnum ice cream, Persil, Sure, Surf, Ben & Jerry’s, Brut, Carte D’Or, Cif, Cornetto, Impulse, I Can’t Believe it’s Not Butter, Maille, Marmite, Pond’s, Radox, Simple, Solero, St Ives, Stork, TRESemme, Timotie, VO5, Vaseline, Viennetta, Wall’s, Bovril, Colman’s Elmlea, Lyons, PG Tips and Pot Noodle.
Could the price war widen?
Although the condiment crisis has passed, consumers could face a New Year surge in prices as experts warn the Tesco spat with Unilever was just the “thin end of the wedge”.
Steven Dresser, retail analyst at Grocery Insight, said there was likely to be a round of price hikes in January as retailers look to pass on higher costs following the festive season.
Retailers face rising costs of goods and materials from the plunging value of the pound since the Brexit vote, but are under pressure to keep prices low in an intensely competitive market.
What’s been the reaction?
MPs claimed the company was using Brexit as an excuse to exploit consumers.
Meanwhile, others mocked the situation – with eBay listings offering a “used” jar of Marmite for £100,000 and another advertising “a “Rare 2016 genuine retail Marmite jar (unopened)” for £5,000.
A 125g jar for £29.99 reads: “A much loved/hated spread once found in many cupboards across Britain, but following the decision to leave the EU has now become an extremely rare item.”
