London: A wide selection of Unilever products ranging from Hellmann’s mayonnaise to Ben & Jerry’s ice cream and Marmite spreads vanished from Tesco Plc’s online store on Wednesday, in what’s reported to be a standoff between Britain’s biggest supermarket chain and one of its key suppliers over rising prices on consumer staples in the wake of the Brexit vote.
Tesco said it’s “currently experiencing availability issues on a number of Unilever products”, and aims to have the issue resolved soon, while Unilever declined to comment. Among other Unilever brands to exit the web store were Persil detergent, Flora margarine, and more than 100 products belonging to the Dove range of body care.
The shortage is the result of a price dispute, the UK’s Guardian newspaper reported, as Unilever sought to raise charges by about 10 per cent because of the fall in value of sterling against the euro and dollar after the Brexit vote.
Sterling’s plunge following the June referendum risks raising import prices for consumer goods makers, yet passing those additional costs along to retailers will be difficult with UK grocers already locked in fierce competition. Unilever is a major supplier to Tesco, which has sought to improve relations with its vendors in the wake of an accounting scandal and criticism from a grocery industry regulator.
“This sort of standoff benefits no one,” said Bryan Roberts, an analyst at researcher TCC Global. “Unilever will lose market share by not being in Tesco, and shoppers will feel a huge degree of frustration. A speedy resolution would be in everyone’s best interests.”
The Brexit vote has already affected pricing of products ranging from floor coverings to toilet paper. Unilever was among companies that lobbied voters to remain in the European Union, while supermarkets including Tesco took a more neutral stance ahead of the vote in a bid not to alienate either faction of consumers.
Any dispute between the two companies would be particularly touchy for Tesco chief executive officer Dave Lewis, who spent most of his career at Unilever before taking the helm of the UK retailer in 2014. Unilever, run by Paul Polman, is scheduled to report third-quarter results on Thursday.