Unilever settles Tesco row but still at odds with SuperValu

Retailer and supplier of lines such as Lynx and Pot Noodle in dispute over rising costs

SuperValu said: “We do not believe a price increase on the products under discussion is justified given the current exchange rate.” Photograph: Cyril Byrne

SuperValu said: “We do not believe a price increase on the products under discussion is justified given the current exchange rate.” Photograph: Cyril Byrne

 

Cork-based wholesaler Musgrave is resisting price increases of up to 19 per cent that consumer products giant Unilever is seeking to push through on some of its leading brands in reaction to the sharp fall in sterling.

The dispute affects the SuperValu and Centra chain of grocery stores in Ireland and comes just as a similar row between Tesco and Unilever, the maker of Hellmann’s mayonnaise, Knorr soups and sauces and Lyons tea, was settled.

In the UK, Marmite, PG Tips tea and Pot Noodles were among dozens of brands that were unavailable on Tesco’s website due to the dispute, which was driven by sterling’s 20 per cent post-Brexit plunge against the euro.

The dispute was settled late on on Thursday. In a statement Unilever said: “Unilever is pleased to confirm that the supply situation with Tesco in the UK and Ireland has now been successfully resolved. We have been working together closely to reach this resolution and ensure our much-loved brands are once again fully available.”

Dynamic environment

In a statement, the Irish retailer said it was committed to “delivering the best value” for consumers.

“We operate in a dynamic environment and we always endeavour to respond to changing circumstances, working with our suppliers as necessary,” SuperValu said. “This works both ways – sometimes a supplier comes to us and on other occasions we approach suppliers.

“In light of the recent fall in sterling we have been actively working with relevant suppliers to ensure that savings are passed on to consumers. It is important to note that these discussions are ongoing.

“Due to our refusal to accept what we consider to be an unjustified price increase we may experience some supply issues on certain Unilever products.

“Negotiations with Unilever, however, are continuing and we are examining all options open to us. We would stress that this is not our desired outcome, but we do not believe a price increase on the products under discussion is justified given the current exchange rate.

“In fact, we believe that a price decrease is warranted given the fall in the value of sterling against the euro.”

Unilever refused to comment to The Irish Times on the dispute.

It is understood the row means a range of Unilever brands will not be delivered to SuperValu and Centra stores across Ireland. However, the retailers will continue to sell stock already on the shelves.

SuperValu launched a price-cuts campaign today, which it said involves an investment of €14 million on more than 800 product lines.