Unilever Expects Commodity Prices to Rise Further

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Laundry and food group Unilever expects the rise in raw material prices to continue until the middle of next year. “The top has not yet been reached,” said CEO Alan Jope.

 

The company behind brands such as Dove, Knorr and Magnum has increased its prices in recent times to compensate for the higher costs. Other consumer goods manufacturers have also implemented price increases, such as the care and cleaning products group Procter & Gamble.

Now that the economy is rapidly recovering from the corona crisis, there is a shortage of all kinds of materials. In addition, transport, energy and labour have also become more expensive. “We have not seen this kind of inflation in the past twenty years,” said Jope. He cannot yet say whether Unilever’s prices will have to rise faster in the coming quarters to compensate. The company will also look at how it can cut costs itself.

Overall, Unilever’s third-quarter sales fell 1.5 percent from a year earlier. This is due to the impact of the corona pandemic in Southeast Asia and the lockdown measures in that region. In addition, in countries such as Indonesia, Vietnam and Thailand, the vaccination coverage is still relatively low.

Total turnover did increase by 4 percent to 13.5 billion euros. This is mainly because Unilever has increased prices and also through acquisitions. However, a profit figure has not been disclosed.

Unilever reports that the operational separation of the tea branch was completed in early October and is now focusing on the next phase for the company. The options are an IPO, sale or partnership. Jope wouldn’t say which possibility is most likely.

The group has been looking at the division’s future since the middle of last year, with brands such as Lipton and Pukka. The company reportedly contacted potential buyers for the part, which is expected to bring in around €4 billion in the past quarter.

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