Tesco running out of some of Britain's best known brands after Brexit price row

Supermarket refuses Unilever's 10 per cent price hike 

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Tesco is running out of several leading household brands following a row over prices with its major supplier Unilever.

The food, toiletries and household goods firm have refused to supply the supermarket giant after it refused to raise prices by 10 per cent on their products. 

Unilever, which is based in the Netherlands, claimed that due to the dramatic fall in the value of the pound compared to the euro and the dollar they had to put up prices. 

Sterling dropped even further on Tuesday to $1.23 with some Bureau de change in UK airports offering exchange rates of less than one euro to the pound.

The move is the result of the fall in value of the pound following speculation that Britain would have a “hard Brexit” - meaning the country will leave the single market when it leaves the EU and revert to using World Trade Organisation terms for trade.

It was the biggest fall since Britain voted to leave on 23 June. 

Flora margarine (Reuters)

Unilever, which controls brands such as Marmite, Dove, Comfort, Flora, Pot Noodle and Ben & Jerrys, has reportedly approached several retailers asking them to raise prices in response. 

One anonymous source told the Guardian:  “Unilever is using Brexit as an excuse to raise prices, even on products that are made in the UK”.

It comes just hours after former Sainsbury’s boss, Justin King, warned that it would be impossible for shops to absorb the rising costs caused by the weak pound.

He said: “Retailers' margins are already squeezed. So there is no room to absorb input price pressures, and costs will need to be passed on.

“But no one wants to be the first to break cover. No business wants to be the first to blame Brexit for a rise in prices. But once someone does, there will be a flood of companies because they will all be suffering.”

The Treasury has warned that “Hard Brexit” could cost up to £66bn and slash the UK’s GDP by almost 10 per cent. 

A leaked document said: "The Treasury estimates that UK GDP would be between 5.4 per cent and 9.5 per cent of GDP lower after 15 years if we left the EU with no successor arrangement, with a central estimate of 7.5 per cent."

"The net impact on public sector receipts - assuming no contributions to the EU and current receipts from the EU are replicated in full - would be a loss of between £38 billion and £66 billion per year after 15 years, driven by the smaller size of the economy."

A Tesco spokeswoman told The Independent: "We are currently experiencing availability issues on a number of Unilever products. We hope to have this issue resolved soon.”

Unilever refused to comment.