Marmite maker warns of price hike on some of UK's best loved brands – Daily Mail

By Danyal Hussain and James Robinson for MailOnline
|

133
View
comments

Unilever has warned shoppers they will face higher prices for Marmite and its other products as the firm’s costs soar by billions.    
The consumer giant, which makes products including Ben & Jerry’s ice cream and Dove soap, told shareholders it expects to be hit by £1.7 billion of cost inflation over the first half of 2022.
Graeme Pitkethly, the chief financial officer, said that the business was facing the ‘highest inflation we’ve seen in a decade’.  
Pitkethly also said the business has been heavily affected by increases in freight costs, as well as surges in the cost of oils used in its products, such as a 130% rise in the price of palm oil. 
He added: ‘There will be price increases on some products and in some markets but it will not be uniform across the world.’ 
The price of Marmite and other Unilever products could soar with the consumer giant facing rising costs
The group reported a 4.5% jump in sales for 2021 and said this was driven by a 2.9% increase in prices, with the remaining 1.6% resulting from higher volumes as it witnessed strong sales across its food business, with brands like Magnum and Ben & Jerry’s performing particularly strongly
The consumer giant faced a 60 per cent increase in the cost of crude oil and petrochemicals, used in packaging and plastics, as well as a 130 per cent increase in the price of sustainable palm oil, which it uses in its cosmetics and Hellmann’s mayonnaise. 
Unilever has also been hit by the price of soybeans, used in food products, which has doubled while transport costs are five times higher than they were before the pandemic began two years ago. 
The group reported a 4.5% jump in sales for 2021 and said this was driven by a 2.9% increase in prices, with the remaining 1.6% resulting from higher volumes as it witnessed strong sales across its food business, with brands like Magnum and Ben & Jerry’s performing particularly strongly.
The company said it predicts an increase in sales to between 4.5% and 6.5% in 2022 as it seeks to push through further price rises in an effort to offset cost inflation.
However, Unilever also reduced its profit margin guidance for the year, causing shares to drop as the markets opened on Thursday.
Meanwhile, it was revealed yesterday that diners and pub-goers face costly main courses, pricey pints and wallet-depleting wine bills this year, with hospitality chiefs warning of a huge spike in the cost of eating out.
With Britons already facing an impending cost of living crisis due mainly to spiraling gas prices, hospitality bosses are now warning diners they face forking out as much as 20 per cent extra on their total bill by the end of this year.
The increase includes a 14 per cent rise in the price of drinks, which could send average pint prices across the UK from £3.94 to as much as £4.49.
Graeme Pitkethly, the chief financial officer, said that the business was facing the ‘highest inflation we’ve seen in a decade’
The consumer giant faced a 60 per cent increase in the cost of crude oil and petrochemicals, used in packaging and plastics, as well as a 130 per cent increase in the price of sustainable palm oil, which it uses in its cosmetics and Hellmann’s mayonnaise
Pub-goers in London, where average pints are £5.19, could rise above £6-a-pint – already a norm in many of the capital’s watering holes. 
Hospitality chiefs also warn food bills could rise by as much as 17 per cent, which could push the average main course up from £11.87 to £13.89 and starters from £6.31 to £7.38. 
Meanwhile, an average 175ml glass of wine costing £4.01 in the UK could rise to £4.47, while a spike in the cost of tonic water could send the cost of G&Ts spiralling. 
Pub-goers looking for a quick snack to soak up their drinks won’t be able to avoid the increase either, with crisp prices set to rise by around 7 per cent – knocking an average packet of crisps up from 70p to 75p.
Hospitality bosses say the increase has been driven by a huge spike in labour costs and the return of the 20 per cent VAT rate in April – on top of energy price rises which are also set to hit Britons in the pocket at home.
The price rise warning comes as High Street bakery Greggs today said it would have to raise prices by as much as 10p on some items due to inflation. Pret a Manger is upping the price of its coffee subscription service to £25 a month from £20. 
Meanwhile Tesco bosses have today warned supermarket prices could increase by as much as 5 per cent by the spring. It comes as Britons also face higher gas bills later this year and a raise in National Insurance contributions. 
Speaking about the price rises, UKHospitality Chief Executive, Kate Nicholls, said: ‘Omicron has infected the start of 2022 with lower-than-expected trading levels and higher than expected cancellations in hospitality venues.

In yet another addition to the mounting cost of living crisis, hospitality bosses are now warning diners they face forking out as much as 20 per cent extra on their total bill by the end of this year. Pictured: Library image
The increase includes a 14 per cent rise in the price of drinks, which could send average pint prices across the UK from an average of £3.94 to as much as £4.49. Pictured: Library image
‘One in three businesses in our sector have no cash reserves left and are already carrying heavy debt burdens.
‘Many of our community pubs, restaurants, hotels and hospitality venues will therefore fail as the cost-of-living crisis bites, causing demand to faulter. This can only cause the UK’s wider economic recovery to stutter.
‘This April’s planned increases in VAT, employment costs and business rates are therefore likely to prove one financial burden too many for businesses who only then, as we come out of the quieter winter trading period, can hope to begin to start trading at full capacity once more.
‘The industry wants to play its full part in the UK’s recovery from the pandemic but, as these latest figures highlight, we can only do that with further support from the Government – support that must include keeping VAT at 12.5% permanently.’
Speaking about the price rises, UKHospitality Chief Executive, Kate Nicholls (pictured), said: ‘Omicron has infected the start of 2022 with lower-than-expected trading levels and higher than expected cancellations in hospitality venues.’
The price rise warning comes as, in a UKHospitality survey of over 340 hospitality businesses representing 8,200 venues employing 190,000 people, nearly half of operators (47 per cent) reported that they will be forced to increase consumer prices by over 10 per cent this year.
Around 15 per cent said they anticipated hikes of over 20 per cent. Overall, it is expected that prices across the sector will increase by 11 per cent, according to UKHospitality. 
The industry body said the rise was due to a huge increase in overhead costs, including a 41 per cent increase in energy bills, a 19 per cent rise in labour costs, due to staffing shortages, and a 21 per cent increase in the cost of insurance.
One landlord, Steve Garner, who runs The Cock in Dereham, Norfolk, warned he faced having to push pint prices at his pub up to £7 in order to stay a float.
He blamed the sudden rise in the cost of beer and lager supplies which has sent overheads sky-rocketing for thousands of pubs and bars in recent weeks. 
Steve, who runs the pub with partner Jane Howard, said ‘The prices have gone up so much that, if we stick to the margins that normal publicans work with, we would have to charge over £7 a pint.
‘That was the thing we noticed most when the list came through in the last few days.  We are obviously going to have to take a hit to remain competitive.
‘Price rises are definitely going to play a part going forward – we landlords are going to get squeezed because if a publican sticks to his guns and raises prices, nobody would go down the pub. We are not at that point yet, but it is almost upon us.’
It comes as Britain’s Gin & Tonic lovers are set to pay more for their favourite pick-me-up tipple. According to the report, prices of popular tonic waters have soared in High Street supermarkets in recent weeks.
Data from analyst Assosia found that the cost of market leading brands Schweppes and Fever-Tree had been subject to hefty hikes in all the leading multiple retailers since the beginning of the year.
Trade magazine The Grocer said that the study showed that prices of Schweppes Indian Tonic Water, Low Calorie Elderflower Tonic Water, Slimline Indian Tonic Water and Slimline Lemon Tonic Water rose 9.1per cent in Morrisons from £1.65 to £1.75 on 31st January. 
Data from analyst Assosia found that the cost of market leading brands Schweppes and Fever-Tree had been subject to hefty hikes in all the leading multiple retailers since the beginning of the year. Trade magazine The Grocer said that the study showed that prices of Schweppes Indian Tonic Water, Low Calorie Elderflower Tonic Water, Slimline Indian Tonic Water and Slimline Lemon Tonic Water rose 9.1per cent in Morrisons from £1.65 to £1.75 on 31st January
Various Schweppes products have also been increased in price in Sainsbury’s and Tesco. In addition, since the start of 2022, 15 Fever-Tree products have risen in price in Morrisons, 16 in Tesco and 21 in Sainsbury’s.
A spokeswoman for Schweppes owner Coca-Cola Europacific Partners told The Grocer that it had faced significantly increased costs in haulage, packaging, ingredients and utilities and had taken steps to ensure these cost pressures have not been passed on to its customers and shoppers.
But the company said that with these pressures set to continue it had ‘been necessary for us to increase some of the prices at which we supply our products to our customers.’
The Grocer said it had approached Fever-Tree and the supermarkets for comment.
But the magazine said it was not all bad news for G&T fans. Gins themselves do not appear to have been subject to any major rises in the multiple retailers.
It comes after The Night Time Industries Association (NTIA) said earlier this week how its latest survey of 198 nightlife operators revealed a 26 per cent jump in the cost of running their businesses last year.
Nightclubs, bars, casinos and companies in the supply chain said this included an 18 per cent rise in the cost of stock, including food and drink.
Meanwhile workforce costs have leapt 18 per cent, insurance costs have increased by 31 per cent following pandemic disruption and utility bills have risen 29 per cent.
‘It is unfortunately the case that when you see enormous cost increases of the kind we have felt in our sector, for the vast majority of businesses there is little else they can do other than pass these on to consumers,’ said Michael Kill, chief executive officer of the NTIA.
Nightlife venues say workforce costs have leapt 18 per cent, insurance costs have increased by 31 per cent following pandemic disruption and utility bills have risen 29 per cent (Pictured: Group of girls enjoy night out in Swansea, following lifting of Covid rules, January 28, 2022)
The Night Time Industries Association (NTIA) said its latest survey of 198 nightlife operators revealed they saw a 26 per cent jump in the cost of running their businesses last year. (Pictured: Hundreds of people were pictured queuing to get into bustling venues in Newcastle without needing to show Covid passes or use masks for the first time on January 28, 2022)
Industry leaders have warned there ‘is little else’ nightlife businesses can do than pass cost increases onto customers after being struck by higher wages, rising food and drink costs and an end to Government support measures. (Pictured: Revellers queue outside a nightclub on January 28, 2022)  
‘Sadly, what this will mean is people’s well-earned nights out being made considerably more expensive, just when they are themselves struggling with their own cost of living and trying to decide which monthly expenses they can do without.’ 
The NTIA said firms have already swallowed significant costs following heavy pandemic disruption but face a ‘perfect storm’ in April.
Businesses are set to be further impacted by an increase in National Insurance contributions, a rise in the National Living wage to £9.50 an hour, and reductions in pandemic support such as reduced food and soft drink VAT in April.
Firms also told the industry group that they are still operating at below 70 per cent of pre-pandemic levels despite the easing of restrictions.

‘These statistics show just how bleak things remain for our sector,’ Mr Kill added.
‘I think there is a temptation to think that, because it feels as if the pandemic restrictions are now behind us, that nightlife will just snap back to its pre-pandemic strength and everything will be fine.
‘Sadly, this couldn’t be much further from the truth.’
It comes after some 93 per cent of hospitality businesses said they plan to increase customer prices, according to a survey of 340 operators running 8,200 venues by trade body UK Hospitality, published last week. 
The data revealed firms predict average prices will rise by 11 per cent in a bid to offset soaring costs. 
Britons were last week warned they face the biggest fall in living standards on record with energy bills and mortgage rates soaring – as Rishi Sunak finally unveiled a £9billion cost-of-living crisis package but admitted it will hardly make a dent in the pain for families.
The Chancellor announced new help in the Commons minutes after it was revealed the energy price cap is going up 54 per cent for millions of people in April, meaning typical costs will rise £693 to £1,971.
And as he spoke, the Bank of England pushed interest rates to 0.5 per cent to control rampant inflation, which it now believes will reach 7.25 per cent in April and act like a lead weight on the economy, as well as pushing up unemployment.
It cautioned that disposable incomes are on track to fall by around 2 per cent – the worst impact since comparable records began in 1990.
Mr Sunak said A-D band homes in England will get £150 council tax rebates, while £200 government-backed discounts will help temporarily keep electricity bills lower for everyone – but must be repaid over five years.
There will also be a £150million ‘discretionary fund’ for local authorities to distribute to worse-off families.
But Mr Sunak conceded it would be ‘wrong and dishonest’ to claim that he can take away all the pain, pointing to soaring global gas costs.
He said the ‘vast majority’ of households would see a £350 benefit – but that is barely half the average energy cap increase.
‘Without Government action, this could be incredibly tough for millions of hardworking families. So the Government is going to step in to directly help people manage those extra costs,’ Mr Sunak said.
The policy had been delayed by weeks of internal wrangling with Boris Johnson and the Cabinet, after many ministers pushed for the £12billion national insurance raid to be delayed or axed.    
Published by Associated Newspapers Ltd
Part of the Daily Mail, The Mail on Sunday & Metro Media Group

source


0Shares

Add a Comment

Your email address will not be published.