Wednesday 7 December 2016

SuperValu owner still holding out against grocery price hikes

Donal O'Donovan and Colm Keplie

Published 21/10/2016 | 02:30

Some of the Unilever products Photo: PA
Some of the Unilever products Photo: PA

Grocery giant Musgraves and supplier Unilever remained locked in negotiations over planned price increases last night, the Irish Independent has learned.

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The Irish company behind the SuperValu and Centra chains is resisting price rises. Talks have now been ongoing for more than a week, after Anglo-Dutch conglomerate Unilever sought to hike prices, by as much as 19pc in some cases, on its massive portfolio of branded foods and household consumer goods.

Musgraves stopped taking deliveries from Unilever a week ago. It is expected to begin running out of some products within weeks. Unilever supplies as many as 800 supermarket products including Lyons Tea, Hellmann's Mayonnaise and Pot Noodles.

It has claimed price hikes in Ireland won't be felt by consumers because of the strength of the euro versus sterling.

The Unilever rows with Tesco and SuperValu have served to overshadow a broader global slowdown in the consumer-goods sector that is not expected to end soon. A handful of companies account for swathes of the grocery market.

Yesterday. Nestle cut its full-year sales forecast as emerging markets and the US slowed, while shipments of confectionery - threatened by sugar taxes and other moves toward healthier eating - fell for the first time in over two years.

Earlier, Danone said baby food, its longtime growth driver, had decelerated in the third quarter because of higher taxes in China.

Reckitt Benckiser Group - maker of products ranging from Dettol and Durex, is facing boycotts in South Korea after products it once sold were linked to deaths. "It's tough out there for the consumer-goods sector and there's no sign of any corner turned," said Martin Deboo, an analyst at Jefferies. (Additional reporting Bloomberg)

Irish Independent

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