Unilever has stunned the grocery industry by demanding double-digit price hikes on many of its well-known tea and savoury food brands.
The biggest increases include Ragù sauces, which are to go up 21%, 24 lines of PG Tips (10% to 15% depending on pack size), Knorr soups (13%), Colman's dry pourover sauces (27%) and Jif Lemon (31%).
The consumer goods giant will raise the price of at least 100 SKUs by an average of 12% next month, wholesalers said.
In addition, Unilever has warned some of its fabric cleaners and conditioners will rise by 5% in June, although these price rises have yet to be finalised.
Unilever claimed it was "introducing the same percentage increases across the board, whether it's Tesco or a wholesaler", but wholesalers remained sceptical that the multiples would accept the terms.
A spokesman for leading wholesaler Bestway expressed concern. "We would be very interested to see what the justification is for such a massive hike with the market in such a fragile state."
And a large buying group called the price hikes unjustifiable and untenable. "It's maximum profiteering. This will increase the price differential between our stores and the multiples. We don't have enough volume to do own-label in some of these lines, whereas they do."
Another wholesaler claimed Unilever had told him the price hikes were in response to increased ingredients costs caused by the exchange rate, as well as a poor crop of tea.
"This reflects the significant increases in commodity costs we have been experiencing throughout the business," a Unilever spokesman admitted.
However, analysts said Unilever was in danger of losing volume by increasing prices. "For Unilever in the UK, weak sterling is negating a lot of the impact of falling commodity prices, meaning that price increases are evidently still necessary," said Martin Deboo of Investec.
The biggest increases include Ragù sauces, which are to go up 21%, 24 lines of PG Tips (10% to 15% depending on pack size), Knorr soups (13%), Colman's dry pourover sauces (27%) and Jif Lemon (31%).
The consumer goods giant will raise the price of at least 100 SKUs by an average of 12% next month, wholesalers said.
In addition, Unilever has warned some of its fabric cleaners and conditioners will rise by 5% in June, although these price rises have yet to be finalised.
Unilever claimed it was "introducing the same percentage increases across the board, whether it's Tesco or a wholesaler", but wholesalers remained sceptical that the multiples would accept the terms.
A spokesman for leading wholesaler Bestway expressed concern. "We would be very interested to see what the justification is for such a massive hike with the market in such a fragile state."
And a large buying group called the price hikes unjustifiable and untenable. "It's maximum profiteering. This will increase the price differential between our stores and the multiples. We don't have enough volume to do own-label in some of these lines, whereas they do."
Another wholesaler claimed Unilever had told him the price hikes were in response to increased ingredients costs caused by the exchange rate, as well as a poor crop of tea.
"This reflects the significant increases in commodity costs we have been experiencing throughout the business," a Unilever spokesman admitted.
However, analysts said Unilever was in danger of losing volume by increasing prices. "For Unilever in the UK, weak sterling is negating a lot of the impact of falling commodity prices, meaning that price increases are evidently still necessary," said Martin Deboo of Investec.
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