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.
“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.”
Register for free to continue reading
Registration is a free and easy way to support our truly independent journalism
By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists
Already have an account? sign in
Join our new commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies