Products like Dove soap and Marmite could see price hikes soon.
Today, British consumer goods company Unilever offered a warning that prices on several of its products may be seeing increases in the near future. The company recently attempted to generate some capital by seeking to acquire GlaxoSmithKline’s consumer sector, but this deal fell through, which has both cost them a large sum of money and landed them in hot water with their investors. Unfortunately, this means their need for money will have to be passed onto the consumers.
“We have listened carefully to our shareholders. There’s no appetite for a deal the size of GSK consumer health,” Unilever CEO Alan Jope told CNBC.
“We don’t intend to pursue these types of transformational acquisitions for the foreseeable future. We’ve been unambiguous, we’ve drawn a line under that deal, it’s off the table.”
Unilever holds the rights to many frequently-purchased consumer goods around the world, including Dove soap, Ben & Jerry’s ice cream, Marmite spread, and more. Unfortunately, manufacturing and shipping these products worldwide isn’t cheap, and due to ongoing concerns in the supply chain and labor markets, inflation is almost inevitable.
“The signature characteristic of this calendar year is going to be commodity and input cost inflation,” Jope said.
— New York Post (@nypost) February 10, 2022
Jope is hoping that Unilever can still see some growth for 2022, at least enough to appease the shareholders, but until their operating costs decrease, price hikes will be an unfortunate necessity.
“It’s a last resort to go to pricing,” Jope said. “But in these types of circumstances we will be taking and are taking substantial price increases.”
“This is really a margin dip that’s rooted in our determination not to underinvest in the business in a period of high commodity inflation,” he added.