Unilever increased prices on its products by 4.1 per cent in the third quarter – the biggest rise in almost a decade – as the global consumer group warned consumers inflation was set to accelerate next year.
The London-based producer of Lifebuoy and Dove soap, Oxo beef stock, Hellmann’s mayonnaise and Magnum ice cream pushed rising raw material costs amid the global supply chain crisis onto consumers to compensate for a decline in shipments to South-East Asia because of Covid-19 outbreaks.
Consumers should expect at least another 12 months of inflationary pressure, Unilever's chief executive Alan Jope said, as the company posted strong quarterly sales growth.
“Peak inflation will be in the first half of 2022, and it will moderate as we move towards the second half,” Mr Jope said.
Unilever’s share price was the top gainer on the FTSE100 at 1.11pm London time on Thursday, rising 2.92 per cent following its robust sales update.
Meanwhile, the company’s chief financial officer said shoppers can see “that we’ve stepped up the pricing”.
“That’s in response to the really very high levels of inflation that we are seeing. We think that will continue through the end of this year and next."
Annual inflation across some of the world’s largest economies increased to 4.3 per cent in August, driven by rising energy and food prices, according to the Organisation of Economic Co-operation and Development.
The rise in prices continued an upward trend that began in December 2020, with energy prices in the 37-member economic bloc rising at a faster pace of 18 per cent in August and food inflation increasing sharply to 3.6 per cent.
Unilever expects rising prices to continue next year, putting pressure on consumer goods companies as they hike prices to try to offset surging energy and other costs.
The company beat third-quarter sales growth forecasts, with underlying sales rising 2.5 per cent in the three months ending September 30, while growth was boosted by demand in the US, India, China and Turkey.
Meanwhile, the 4.1 per cent increase in prices more than offset a 1.5 per cent decline in volumes, with most of the drop coming from South-East Asia, where a rise in cases of the Delta variant of the coronavirus forced governments to implement stringent lockdowns that curbed consumption.
Unilever reckons inflation is here to stay. That’s bad news not just for investors in the consumer goods giant but also for central bankers.
Danni Hewson,
AJ Bell
“Unilever reckons inflation is here to stay. That’s bad news not just for investors in the consumer goods giant but also for central bankers,” said AJ Bell financial analyst Danni Hewson
“The like of the Federal Reserve will have been hoping inflationary pressures would ease sooner rather than later as they walk the tightrope of keeping prices from overheating while not choking off the recovery by raising interest rates too far and too fast.”
Given the breadth of costs Unilever is exposed to and “the fact that dealing with input costs is bread and butter for a consumer goods company”, a warning that inflation will be higher in 2022 “carries weight”, said Ms Hewson.
Britain’s inflation rate dipped to 3.1 per cent in the 12 months to September after the artificial blip caused by last year’s ‘Eat Out to Help Out,’ scheme dropped out of the figures, but analysts warned consumers of higher prices to come.
As a major supplier to Britain’s supermarkets, managing cost inflation is a major challenge for Unilever as its sales are dominated by emerging markets where rising prices for energy, raw materials and freight are having an impact.
Unilever’s price rises were also higher than market rival Nestle, which said earlier this week it pushed prices up 2.1 per cent in three months ending September.
“For now Unilever hopes price increases, running at the highest rate in years, will keep margins flat year on year but the company faces its own balancing act of not increasing prices so much that its products are no longer competitive. It is a real test of the strength of the company’s brands,” said Ms Hewson.
“After all, will we really stick with branded soap at a materially higher price when there’s an unbranded alternative sitting next to it on the shelf which is an order of magnitude cheaper?
“If enough consumers decide they can put up with a cheaper alternative then it would become a big problem for Unilever.”
Key findings of Jenkins report
- Founder of the Muslim Brotherhood, Hassan al Banna, "accepted the political utility of violence"
- Views of key Muslim Brotherhood ideologue, Sayyid Qutb, have “consistently been understood” as permitting “the use of extreme violence in the pursuit of the perfect Islamic society” and “never been institutionally disowned” by the movement.
- Muslim Brotherhood at all levels has repeatedly defended Hamas attacks against Israel, including the use of suicide bombers and the killing of civilians.
- Laying out the report in the House of Commons, David Cameron told MPs: "The main findings of the review support the conclusion that membership of, association with, or influence by the Muslim Brotherhood should be considered as a possible indicator of extremism."
Mohammed bin Zayed Majlis
The five pillars of Islam
1. Fasting
2. Prayer
3. Hajj
4. Shahada
5. Zakat
UAE currency: the story behind the money in your pockets
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Dates for the diary
To mark Bodytree’s 10th anniversary, the coming season will be filled with celebratory activities:
- September 21 Anyone interested in becoming a certified yoga instructor can sign up for a 250-hour course in Yoga Teacher Training with Jacquelene Sadek. It begins on September 21 and will take place over the course of six weekends.
- October 18 to 21 International yoga instructor, Yogi Nora, will be visiting Bodytree and offering classes.
- October 26 to November 4 International pilates instructor Courtney Miller will be on hand at the studio, offering classes.
- November 9 Bodytree is hosting a party to celebrate turning 10, and everyone is invited. Expect a day full of free classes on the grounds of the studio.
- December 11 Yogeswari, an advanced certified Jivamukti teacher, will be visiting the studio.
- February 2, 2018 Bodytree will host its 4th annual yoga market.
WRESTLING HIGHLIGHTS
RESULT
Huddersfield Town 2 Manchester United 1
Huddersfield: Mooy (28'), Depoitre (33')
Manchester United: Rashford (78')
Man of the Match: Aaron Mooy (Huddersfield Town)
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AI traffic lights to ease congestion at seven points to Sheikh Zayed bin Sultan Street
The seven points are:
Shakhbout bin Sultan Street
Dhafeer Street
Hadbat Al Ghubainah Street (outbound)
Salama bint Butti Street
Al Dhafra Street
Rabdan Street
Umm Yifina Street exit (inbound)
Killing of Qassem Suleimani
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Ms Yang's top tips for parents new to the UAE
- Join parent networks
- Look beyond school fees
- Keep an open mind
More from Neighbourhood Watch:
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
2021 World Triathlon Championship Series
May 15: Yokohama, Japan
June 5: Leeds, UK
June 24: Montreal, Canada
July 10: Hamburg, Germany
Aug 17-22: Edmonton, Canada (World Triathlon Championship Final)
Nov 5-6 : Abu Dhabi, UAE
Date TBC: Chengdu, China
Conflict, drought, famine
Estimates of the number of deaths caused by the famine range from 400,000 to 1 million, according to a document prepared for the UK House of Lords in 2024.
It has been claimed that the policies of the Ethiopian government, which took control after deposing Emperor Haile Selassie in a military-led revolution in 1974, contributed to the scale of the famine.
Dr Miriam Bradley, senior lecturer in humanitarian studies at the University of Manchester, has argued that, by the early 1980s, “several government policies combined to cause, rather than prevent, a famine which lasted from 1983 to 1985. Mengistu’s government imposed Stalinist-model agricultural policies involving forced collectivisation and villagisation [relocation of communities into planned villages].
The West became aware of the catastrophe through a series of BBC News reports by journalist Michael Buerk in October 1984 describing a “biblical famine” and containing graphic images of thousands of people, including children, facing starvation.
Band Aid
Bob Geldof, singer with the Irish rock group The Boomtown Rats, formed Band Aid in response to the horrific images shown in the news broadcasts.
With Midge Ure of the band Ultravox, he wrote the hit charity single Do They Know it’s Christmas in December 1984, featuring a string of high-profile musicians.
Following the single’s success, the idea to stage a rock concert evolved.
Live Aid was a series of simultaneous concerts that took place at Wembley Stadium in London, John F Kennedy Stadium in Philadelphia, the US, and at various other venues across the world.
The combined event was broadcast to an estimated worldwide audience of 1.5 billion.
The specs
Engine: 4.0-litre V8 twin-turbocharged and three electric motors
Power: Combined output 920hp
Torque: 730Nm at 4,000-7,000rpm
Transmission: 8-speed dual-clutch automatic
Fuel consumption: 11.2L/100km
On sale: Now, deliveries expected later in 2025
Price: expected to start at Dh1,432,000
Specs
Engine: Duel electric motors
Power: 659hp
Torque: 1075Nm
On sale: Available for pre-order now
Price: On request
Ferrari 12Cilindri specs
Engine: naturally aspirated 6.5-liter V12
Power: 819hp
Torque: 678Nm at 7,250rpm
Price: From Dh1,700,000
Available: Now
Killing of Qassem Suleimani
The five pillars of Islam
Lexus LX700h specs
Engine: 3.4-litre twin-turbo V6 plus supplementary electric motor
Power: 464hp at 5,200rpm
Torque: 790Nm from 2,000-3,600rpm
Transmission: 10-speed auto
Fuel consumption: 11.7L/100km
On sale: Now
Price: From Dh590,000
UAE currency: the story behind the money in your pockets
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TOURNAMENT INFO
Women’s World Twenty20 Qualifier
Jul 3- 14, in the Netherlands
The top two teams will qualify to play at the World T20 in the West Indies in November
UAE squad
Humaira Tasneem (captain), Chamani Seneviratne, Subha Srinivasan, Neha Sharma, Kavisha Kumari, Judit Cleetus, Chaya Mughal, Roopa Nagraj, Heena Hotchandani, Namita D’Souza, Ishani Senevirathne, Esha Oza, Nisha Ali, Udeni Kuruppuarachchi
The specs
- Engine: 3.9-litre twin-turbo V8
- Power: 640hp
- Torque: 760nm
- On sale: 2026
- Price: Not announced yet
What sanctions would be reimposed?
Under ‘snapback’, measures imposed on Iran by the UN Security Council in six resolutions would be restored, including:
- An arms embargo
- A ban on uranium enrichment and reprocessing
- A ban on launches and other activities with ballistic missiles capable of delivering nuclear weapons, as well as ballistic missile technology transfer and technical assistance
- A targeted global asset freeze and travel ban on Iranian individuals and entities
- Authorisation for countries to inspect Iran Air Cargo and Islamic Republic of Iran Shipping Lines cargoes for banned goods
