Sir, After Marmitegate we have yet to see what price increases actually materialise in Tesco and other retailers, but in the PR stakes Tesco won plaudits for being a consumer champion, while Unilever took some hits for what some commentators described as its use of Brexit and the weaker pound as “a smokescreen” for “fleecing” UK consumers.
Unilever’s swift and effective actions to reach agreement with Tesco will, however, dramatically reduce any lasting PR damage, and it’s not as if there aren’t some upsides for Unilever in being “first mover” on the impact of sterling’s fall.
Paul Polman and many others had already been very clear that an inevitable consequence of the Brexit vote and subsequent devaluing of sterling would be a material hit to UK prices. This public falling out will soon be seen as simply a regrettable consequence of that inevitability and of Unilever’s realism in calling it early. In moving first, Unilever stands a good chance of getting its new pricing established ahead of its competition - maybe not at 10% across the board, but at least at the level it needs to offset most, if not all, of the inflation hitting their input costs.
Any criticism of Unilever will likely be forgotten and forgiven amid the flurry of food and grocery price rises coming around the corner. Whatever price rises appear on Marmite, Knorr and Magnum are just the start of painful adjustments to UK grocery prices; after three or four years of food deflation, our weekly shop is about to get a whole lot pricier.
Will Carter, co-founder, Food Strategy Associates
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