Unilever, the renowned food giant known for brands like Marmite and Hellmann’s mayonnaise, has implemented a price increase of nearly 10% amidst an ongoing investigation by Britain’s competition regulator regarding potential overcharging on groceries. Despite a slight decline in sales volumes, the FTSE 100 company experienced a significant surge in profits, with underlying price growth soaring by 9.4% during the first half of the year. As a result, Unilever’s net profits escalated by over one-fifth to approximately €3.9 billion (£3.4 billion). The timing of these financial developments coincides with the Competition and Markets Authority’s (CMA) decision to scrutinize major brand-owners such as Heinz and Unilever to determine if consumers are being treated fairly at the checkout.
In its initial investigation, the CMA did not uncover any evidence of supermarkets engaging in profiteering, despite concerns about “greedflation.” However, the regulator has now entered a new phase wherein it will examine the financial performance metrics of both branded and own-label suppliers as part of its ongoing grocery work.
Unilever expressed its belief that the period of peak inflation in Britain has passed and highlighted that its price hikes in the first half of the year were lower compared to the 13% increases at the end of 2022. The company anticipates a modest improvement in underlying operating margin for the full year, driven by higher gross margin and increased investment in its brands.
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