Unilever expects more price rises for shoppers on back of higher costs
Marmite to Dove maker Unilever has signalled that further price rises are ahead for shoppers as it forecast its own input costs will rise as much as €3.5bn (£3bn) this year.
The FTSE 100 consumer goods company said that after significant supply chain cost inflation last year it expected a further increase in the price of raw materials, freight and packaging in 2022, which was ultimately likely to result in consumers paying more for its products in supermarkets and other retail outlets.
“The major challenge of 2021 has been the dramatic rise of input costs,” said Alan Jope, the Unilever chief executive. “We responded with pricing actions. In 2022 we will manage a significant input cost inflation cycle.”
Also known for brands such as Hellmann’s mayonnaise and Ben & Jerry’s ice-cream, the company expects “very high” cost inflation of €2bn in the first half of this year although said that may moderate to €1.5bn in the second half.
“There is currently a wide range for this that reflects market uncertainty on the outlook for commodity, freight and packaging costs,” the company said.
Unilever also ruled out pursuing any more big deals after the failed £50bn offer for GSK’s consumer healthcare division, as it beat expectations in the fourth quarter with sales revenue growth boosted by price rises.
The embattled consumer products company, which is facing increasing pressure from shareholders to restructure, including potentially splitting its businesses or shaking up its board, also announced a €3bn (£2.5bn) share buyback scheme.
“We have engaged extensively with our shareholders in recent weeks and received a strong message that the evolution of our portfolio needs to be measured,” said Jope. “We therefore do not intend to pursue major
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