Summary

  • Tesco and Unilever resolve product dispute

  • Young could get early access to pension

  • MPs to vote on Sir Philip Green knighthood

  • Lord Wolfson offers £250,000 prize for solution to congested roads

  1. Tesco vs Unileverpublished at 11:30 British Summer Time 13 October 2016

    And some more reader responses:

    Peter Freeman, Peak District,  Derbyshire

    Good for Unilever! For many years Tesco and the other supermarkets have used their commercial buying power in a completely unscrupulous manner, putting many small suppliers out of business in the process. The costs of creating a major brand are enormous. That is why the prices of these brands are higher than own label products. Hopefully Unilever will stick to their guns and hopefully Tesco will be forced to pay the proper price.

    Connie Mansueto, Epping

    I’d be interested to know what Unilever products are made here, I tried but couldn’t find out!  I suspect it’s not many, so why should Unilever shoulder the burden?

  2. Marmitegate: Readers responsespublished at 11:25 British Summer Time 13 October 2016

    Marmite warningImage source, PA

    Keep the comments on the Unilever vs Tesco row coming in: bizlivepage@bbc.co.uk. Here are some of the latest:

    Beatle Fan, Hull

    I'm okay, I've just checked the cupboard. I have a lifetime supply of Marmite. Half a jar.

    Malcolm Latarche. Norfolk Have to say I'm backing Tesco on this one and have decided to boycott all Unilever brands at every outlet aside from Tesco. Not least because many of the brands affected are wholly British operations. If everyone who voted for Brexit did the same, Unilever and others that may be planning to follow suit would soon learn that mugging shoppers under false pretences doesn't pay. 

  3. 'Stores don't hold loads of stock'published at 11:12 British Summer Time 13 October 2016

    So far the shortfalls have been on Tesco's website. Independent retail analyst Steve Dresser has been to check for Unilever brands in his local Tesco store to see if stocks are running low there too. He tweets:

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  4. Stocking uppublished at 11:04

    BBC business journalists are getting their hands on some of Unilever's main brands... 

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  5. 'Unilever will be talking to other supermarkets'published at 10:48

    Big four supermarketsImage source, PA

    The consensus among retail analysts is that Unilever won't just be discussing price rises with Tesco. It'll be having similar conversations with others.

    Sainsbury's, Morrisons, Waitrose and Co-Op all declined to comment when contacted by the BBC.

    But Theresa Wickham, a retail analyst and a former director at Safeway supermarket, said:

    Quote Message

    These negotiations go on the whole time, people are trying to put the price up or they're trying to do something else but they're usually done behind the scenes. Now it's become public, Tesco's has a real opportunity to say that it is the consumer champion. But I think that Unilever will be talking to other retailers as well. But normally all these discussions are conducted behind the scenes and this one I'd term a real battle of the giants."

  6. Quick recappublished at 10:36

    Comfort, Hellmann's and MarmiteImage source, Alamy

    Missed what's been going on in the price row between Tesco and major supplier Unilever? BBC business correspondent Theo Leggett has this summary:

    The dispute has seen popular products such as Marmite, Hellman's Mayonnaise and PG Tips disappear from Tesco's website. They are still being sold in stores, but the supermarket chain says it is running short of some brands. 

    Unilever wants to raise its prices across a wide range of goods by about 10 percent, to compensate for the steep fall in the value of the pound - which has made imports more expensive. 

    The company says the increases are substantially less than what would be needed to maintain its profits. However, Tesco is reluctant to pass higher prices onto consumers, because competition between supermarkets is fierce.

  7. Battle of the big beastspublished at 10:25

    They've been called the two gorillas of the industry, but who is bigger: Tesco or Unilever?

    The chart below shows how Unilever overtook the UK's biggest supermarket chain in the last five years on the FTSE 100 share index. 

    Russ Mould from stockbrokers AJ Bell says this suggests Unilever has stronger pricing power.

    If a firm can charge what it wants, it should generate "high margins, consistent earnings and robust cash flow", which is rewarded by investors and results in a higher share price, he says.

    Tesco and Unilever share pricesImage source, Thomson Reuters Datastream
  8. More reader reaction on Tesco vs Unileverpublished at 10:11

    The responses in support of Tesco have also been coming in from Business Live readers. Here are just a few ... 

    Kevin McGachy

    I just wanted to say that it's good to see Tesco trying to battle to keep lower prices on behalf of the supermarkets. A given that this will be in their interests, but reading that Unilever made £2bn profit in the first half trading, demonstrates their ability to absorb these costs if they chose to put customers over profits. Are the other big chains following Tesco's lead or standing out to be on their side - or have they accepted and passed on the cost increases?

    Alan Piggott

    Unilever are suffering price pressures due to fall in value of pound on imports. Are they making additional profits on exports due to same pressures? Probably balances out.

    Gail Campbell

    Let's hope the other supermarkets see sense and do the same as Tesco. We can live without Pot Noodle and I am sure there are plenty of other brands willing to fill their space. If we allow Unilever to do proceed on this basis it opens the door for others.

  9. Tesco vs Unilever: Business Live readers reactpublished at 09:55

    All morning we've been covering that row between Tesco and Unilever over price rises and Business Live readers have been reacting. 

    First, a selection of emails which are critical of the supermarket chain.    

    Simon Cutts writes:

    How can Tesco complain about Unilever product prices when they themselves are doing exactly the same thing. I went into my local Tesco to buy some of their own coffee which was only 50p a jar. However only 2 days later I noticed that they had increased the price by 19p. This might not seem a lot, however that is only 6p short of 50% and that is their own product with little to no advertising costs. When I contacted Tesco about this they said they would look into this and guess what - nothing. No response. 

    Ian Kemmish

    Obviously, any consumer may choose either to pay more for the brand they want, or to substitute something cheaper. But this is simply not Tesco's call to make. That's arrogance, plain and simple, claiming they know what's best for the consumer. Or else they are using this as a convenient pretext to re-align their product mix to compete with the discounters, if they were planning to do that anyway.

    Beth Lewsey

    I understand that Tesco may be battling a price war on my behalf, but if it fails, then I'd rather it passed on the price increase to me, the consumer, and allowed me the choice of whether to purchase or not, than removing certain items from its shelves, giving me no choice at all.

  10. Tesco vs Unilever: Twitter reactspublished at 09:41

    David Buik, a veteran City commentator and Brexit supporter, gives his backing to Tesco:

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    But Reuters's chief markets correspondent says Unilever flagged up possible changes ahead of the referendum:

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  11. Brand recognition?published at 09:32 British Summer Time 13 October 2016

    Unilever brands

    So just who or what is Unilever? 

    While many people may never have heard of the name Unilever, many of its brands are household names. 

    Marmite, PG Tips tea, Pot Noodles, Surf washing powder, Comfort fabric conditioner, Hellmann's mayonnaise and Ben & Jerry's ice cream are among some of the big names which have disappeared, however.

    But its other many brands include Dove, Walls, Liptons, Omo, Sunsilk, Sun, Lifebuoy, Badedas, Brut, Cif, Carte D'or, Impulse, Maille, Persil, Pond's, Popsicle, Q-tips, Stork, Simple, Viennetta, Bovril, Colman's, Knorr and Becel. 

    We could go on. Then there are the many others that are only available abroad - think Lusso, La Danesa and Lakme. In fact, only 5% of Unilever's profits are made in the UK.  

    It has headquarters in both the UK and the Netherlands and its website declares that worldwide its brands are "used by 2 billion people every day".

    So one way or another, chances are you are using their products on a pretty regular basis without necessarily knowing it. 

  12. 'Unilever isn't trying it on'published at 09:17

    The boss of a supply chain firm has contacted us to say that the Unilever-Tesco row goes to the heart of issues being felt across the retail sector. 

    Roy Williams, managing director of Vendigital - which works with retailers and suppliers - said: “Anyone that thinks Unilever is just trying it on, are wrong. The cost pressures facing many UK suppliers are very real at the moment. 

    "Deep falls in the value of the pound since the EU referendum are cutting deeply."

  13. Tesco price row 'only the start of negotiations'published at 09:08

    Today Programme
    BBC Radio 4

    A former Tesco employee who used to handle their suppliers has said the dispute between Tesco and Unilever is part of the usual process, but Brexit means the scale of the event is bigger.Bruno Monteyne, now an analyst at investment research firm Sanford Bernstein, told the Today programme that "Unilever and Tesco are trying to be the two gorillas on behalf of the industry". In the clip below, he predicted that prices would rise, but not by as much as 10%.

  14. Tesco dispute will end soon - Unilever CFOpublished at 08:55 British Summer Time 13 October 2016
    Breaking

    Tesco storeImage source, AFP

    Unilever's chief financial officer Graeme Pitkethly says the company is confident the "situation" with Tesco "will be resolved pretty quickly".

    Speaking to analysts, he confirmed Unilever, which makes products like Marmite, Lynx and PG Tips, is increasing prices in the UK. 

    However, he said the company "cares deeply" about its brands being affordable for customers, so the increases are "substantially less than we would need to cover the cost on our own profitability".

    He said the price rises had "landed" with other customers, implying other retailers had accepted the higher prices.

  15. Behind the scenespublished at 08:49 British Summer Time 13 October 2016

    Quote Message

    It's (Unilever) been having these discussions with all the major supermarkets and is threatening to put a stop on supply to all of them. So there's furious negotiation going on in the background to establish whether or not supply can be maintained, whether or not supermarkets want to swap in other brands or other items - and which particular items they might want to keep.

    Adam Leyland, Editor, The Grocer magazine

  16. Tesco and Unilever shares fallpublished at 08:37 British Summer Time 13 October 2016
    Breaking

    It's not just shoppers who are worried about the price dispute between Tesco and supplier Unilever. 

    Shares in both companies are down by about 2% in early trading in London.

    Other supermarkets have also taken a hit - with Sainsbury's down 1.7% and Morrisons 1.2% lower - reflecting investor nerves about cost pressures from the fall in the pound.

    They're not the biggest fallers on the FTSE 100, though. 

    The UK share index is down nearly 50 points to below 7,000 points in early trading, with miners among the worst hit. 

  17. Who will pay?published at 08:33 British Summer Time 13 October 2016

    Today Programme
    BBC Radio 4

    UnileverImage source, PA

    Also on Today is Ian Wright, director general of the Food and Drink Federation, which represents the food industry.

    He says there are only three possible outcomes from the row between Tesco and Unilever.

    One is that prices will go up and the consumer will pay.

    Two is that prices are held at their present level and manufacturers and retailers absorb the cost.

    And three is that there's a continuing stand-off between manufacturers and retailers, which will affect consumer choice. 

  18. Unlikely to see 10% increase in Unilever products?published at 08:24 British Summer Time 13 October 2016

    Today Programme
    BBC Radio 4

    Bruno Monteyne, food analyst with Bernstein (see earlier post) has been on Today where he said the Unilever-Tesco spat is only the start of the negotiations between the two sides.

    This is all part of the usual process, he stresses. "Obviously there will be a price increase... but whether it will be 10%, most likely not."

    Unilever reportedly tried to increase wholesale prices by 10% on certain brands.

  19. 'This is quite normal' - Unilever CFOpublished at 08:24 British Summer Time 13 October 2016

    Unilever chief financial officer Graeme PitkethlyImage source, Unilever

    Unilever chief financial officer Graeme Pitkethly is talking to analysts about the firm's strong sales results. We'll let you know if he has any updates on the price dispute with Tesco.

    Mr Pitkethly, who used to run Unilever's UK business so knows the issues well, spoke earlier to Reuters. He told them that price increases are a normal part of doing business, but he declined to comment specifically on the row with Tesco.    

    "This is just devaluation-led cost increase, this is just quite normal," he said.

  20. Unilever's price increasespublished at 08:13 British Summer Time 13 October 2016

    Unilever brandsImage source, Getty Images/Reuters

    What a time to be reporting your results. Unilever released its latest trading figures this morning - showing underlying sales growth of 4.2% - in the middle of a very public dispute with Tesco over passing on higher costs from the fall in sterling.

    And on that topic, analysts said that Unilever's sales growth was in part helped by its ability to defend price increases. 

    Unilever, which makes many well-known brands like PG Tips, Pot Noodles and Surf washing powder, said prices were up 2.8% worldwide in the last nine months.