Tesco running out of products like Marmite and PG Tips amid Brexit price row with supplier Unilever

It is thought a number of supermarkets are also embroiled in the row with Unilever

Katie Forster
Thursday 13 October 2016 10:37

Tesco has removed a number of popular products such as Marmite, Bovril and PG Tips from its online store following a price row with supplier Unilever over the plunging pound.

Multinational household goods giant Unilever has reportedly demanded a 10 per cent price rise in its products, including those made in the UK, to offset the higher cost of imported goods.

But Tesco has refused to pay more and its stores are now running low on Hellmann’s mayonnaise, Pot Noodle and Ben & Jerry’s ice cream after Unilever halted deliveries to the supermarket.

Shoppers trying to buy items like Flora margarine and Surf washing powder from Tesco's website yesterday were met with the message “Sorry, this product is currently not available”.

It is thought a number of supermarkets are also embroiled in the row with Netherlands-based Unilever, which refused to comment on the dispute.

The prospect of a “hard Brexit” has sparked a dramatic fall in the pound’s value compared to the euro and the dollar, and sterling is now at its lowest level against the dollar since 1985.

In June, Unilever chief executive Paul Polman warned that a vote to leave the EU's single market would increase prices for consumers.

He told Channel 4 that a Leave vote would mean hikes in import duties on items such as dairy products, leading to price rises that would affect consumers.

A box of PG Tips tea bags

“Undoubtedly if the UK were to Leave, the conditions will not be as good as if they stay in,” said Mr Polman, citing the example of Wall's Magnum ice cream.

Marmite is produced from yeast extract in Burton in the midlands by Unilever, which posted profits of around £2 billion for the first half of 2016.

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.”

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.”

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