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Tesco enters fierce standoff with Unilever over price hikes

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Tesco and Unilever have ignited a bitter standoff as the food manufacturing giant is accused of “exploiting consumers”.

A pricing row has left Tesco low on many Unilever goods such as Marmite, Flora and Persil after the supermarket refused to pay 10 per cent more for the items amid the ailing pound, causing the manufacturer to cut off deliveries.

This has left many online customers with the message “sorry this product is unavailable” as sales of Pot Noodles, Ben & Jerry’s Ice Cream and Hellmann’s mayonnaise are hit.

Although Unilever posted profits of roughly £2 billion in the first half of the year, it is thought to be in a similar price row with other supermarkets.

RELATED: Tesco on track to financial recovery

Unilever has refused to comment on the dispute, but warned prior to Brexit that imports would affect the price of its goods.

MPs have entered the debate, with Conservative MP Sir Gerald Howarth telling the Daily Telegraph: "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.

"Consumers will switch to other products where companies aren't seeking to fleece the consumer."

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The increasing price war and drop in the pound's value is already squeezing Tesco's margins to the brink. Last week it recorded nearly a quarter drop in profits.

Speaking to The Guardian, former Sainsbury’s chief executive Justin King warned just hours before the bitter standoff began that this many not be the only example of price hikes. 

He said at a conference on Wednesday: "Retailers' margins are already squeezed. So there is no room to absorb input price pressures and costs will need to be passed on."

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Published on Thursday 13 October by Ben Stevens

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