Unilever profit wiped out by rising costs

Marmite manufacturer Unilever has warned it faces the toughest inflationary pressures in a decade as the cost of raw materials, packaging and transport soars.

The multinational, which owns Dove and Magnum among other brands, has seen a projected operating margin increase flattened by rising prices.

Unilever shares fell by 5.9 per cent to £40.50.

Sales grew by 5.3 per cent in the first half of 2021, despite demand for its hygiene products dipping compared to last year, when the Covid-19 pandemic began.

READ MORE: Co-op announces smart vending machine partnership with Unilever

“We are now past ‘peak sanitiser’ but are still consuming more than in 2019,” Unilever chief executive Alan Jope said.

The FTSE 100 company admitted raising prices by 2.2 per cent in June and predicted further increases in the rest of the year.

Refreshment brands have rebounded since hospitality businesses reopened, with ice cream sales reaching double-digit growth.

The news comes as Unilever backed away from a decision by Ben and Jerry’s, which it bought in 2000, to stop selling ice cream in occupied Palestinian territories.

Israeli prime minister Naftali Bennett responded by threatening the multinational with “severe consequences”.

Jope said the decision was down to Ben and Jerry’s independent board.

He added that he wanted to “double-underscore Unilever’s underlying business commitment to Israel”.

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