Unilever: Marmite maker’s profits soar as regulator looks for evidence of grocery greed
The company behind many popular consumer brands including Marmite and Magnum ice creams has revealed a surge in profits, as the UK’s competition regulator seeks evidence on whether shoppers are getting a raw deal at the tills.
Unilever, which also includes brands such as Domestos and Hellmann’s in its stable, reported a 20% rise in net profits to €3.9bn (£3.4bn) over the first half of its financial year.
Underlying price growth for the second quarter was 9.4%, while underlying sales volumes fell by 0.2%, the company said.
It reported on its progress just days after the Competition and Markets Authority (CMA) cleared supermarkets of making excessive profits.
But the regulator said last week it had turned its attention to the supply chain instead, which would include companies such as Unilever.
Food and other producers have been raising prices largely since the end of the COVID pandemic, with leaps in costs largely reflecting higher energy, transport and commodity prices linked to Russia’s invasion of Ukraine.
The question the CMA will be asking is whether suppliers to supermarkets have raised their prices too much, leading to excessive margins at the expense of consumers amid the wider cost of living crisis.
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CMA chief executive on food inflation
Unilever’s underlying operating margin stood at 17.1%, it reported.
There have been several rows between supermarkets and branded goods firms in recent times, with chains refusing to stock some items temporarily over the prices they were being asked to swallow.
This included a very public spat between Tesco and Heinz last year.
Shoppers have responded to the leap in food inflation by buying supermarket own brands, which tend to be cheaper, as an alternative.
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This trend is realised by the fall in sales volumes reported by Unilever, though it reported rising sales by value in each of its main business groups including nutrition and ice cream.
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‘So hard’ for shoppers to tell what is a good deal
The business forecast that underlying sales growth for the full year would moderate to above 5%.
It had warned earlier this year that its prices would rise again in the first half, reflecting rising input costs, but it expected stability for the rest of the year.
That position was reaffirmed by the company on Tuesday in its first update to the City since Alan Jope was succeeded as chief executive by Hein Schumacher earlier this month.
Chief financial officer Graeme Pitkethly said: “We’re past peak inflation now, but there will continue to be a high level of pricing growth within our reported numbers.
“The majority of pricing you’ll see is carry forward pricing as we roll through the quarters.”
Shares rose by 5% at the open.
Charlie Huggins, portfolio manager at Wealth Club, said the results were “solid but uninspiring”, adding that investors would want to see a higher margin.
“The question is – should Unilever be doing better? The answer is almost certainly yes.
“Margins remain well below pre-pandemic levels and below the bonnet of that robust underlying sales growth there are problems.”
Those included weak European sales, he wrote.
The BBC has said it regrets not pulling the live stream of Bob Vylan’s “unacceptable” Glastonbury set – as Ofcom said the broadcaster has “questions to answer”.
The corporation has faced mounting criticism over airing the performance on Glastonbury‘s West Holts Stage, during which the rap-punk duo’s frontman Bobby Vylan led chants of: “Free, free Palestine” and: “Death, death to the IDF (Israel Defence Forces)”.
Sir Keir Starmer condemned the remarks as “appalling hate speech”, while festival organiser Emily Eavis said they “crossed a line” – and media watchdog Ofcom has now also released a statement raising concerns.
This morning, a spokesperson for the prime minister did not directly answer when asked if he still had confidence in BBC director-general Tim Davie.
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What is the Glastonbury controversy?
Footage from Bob Vylan’s set on Saturday showed some of the crowd joining in, as the group performed in front of a screen that said Israel’s actions in Gaza amount to “genocide”.
Afterwards, the BBC said there had been a warning on screen about potential “strong and discriminatory language”, but described the comments as “deeply offensive”.
On Monday, a spokesperson released an updated statement, saying the comments were antisemitic and the performance should have been taken off air.
“The BBC respects freedom of expression but stands firmly against incitement to violence,” the statement said. “The antisemitic sentiments expressed by Bob Vylan were utterly unacceptable and have no place on our airwaves. We welcome Glastonbury’s condemnation of the performance.”
Pic: PA
A judgement to issue a warning on screen while streaming online was in line with editorial guidelines, the spokesperson added, and the performance has not been made available to view on demand.
“The team were dealing with a live situation but with hindsight we should have pulled the stream during the performance. We regret this did not happen.
“In light of this weekend, we will look at our guidance around live events so we can be sure teams are clear on when it is acceptable to keep output on air.”
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An Ofcom spokesperson said: “We are very concerned about the live stream of this performance, and the BBC clearly has questions to answer.
“We have been speaking to the BBC over the weekend and we are obtaining further information as a matter of urgency, including what procedures were in place to ensure compliance with its own editorial guidelines.”
In a statement shared on Instagram on Sunday, Bobby Vylan said: “Teaching our children to speak up for the change they want and need is the only way that we make this world a better place.
“As we grow older and our fire starts to possibly dim under the suffocation of adult life and all its responsibilities, it is incredibly important that we encourage and inspire future generations to pick up the torch that was passed to us.”
The latest developments follows severe condemnation from the prime minister, who said there was “no excuse for this kind of appalling hate speech”.
Mo Chara of Kneecap at Glastonbury. Pic: Reuters
Sir Keir also referenced a previous statement that Belfast rap group Kneecap, who were on stage after Bob Vylan, should have been removed from the line-up after one member was charged with a terrorism offence.
“I said that Kneecap should not be given a platform and that goes for any other performers making threats or inciting violence,” he said.
Ms Eavis, whose father Michael co-founded the festival, said in a statement that Bob Vylan had “very much crossed a line”.
She added: “Their chants very much crossed a line and we are urgently reminding everyone involved in the production of the festival that there is no place at Glastonbury for antisemitism, hate speech or incitement to violence.”
The Israeli embassy posted on X in the hours after the set, saying it was “deeply disturbed by the inflammatory and hateful rhetoric”.
It said the slogan used “advocates for the dismantling of the State of Israel”.
In a separate post on X on Sunday, Israel’s foreign ministry published graphic footage following the attack by Hamas on the Nova festival in Israel on 7 October 2023, and the Campaign Against Antisemitism (CAA) said it would be formally complaining to the BBC over its “outrageous decision” to broadcast the performance.
Speaking to Sky News’ Sunday Morning With Trevor Phillips on behalf of the government, Health Secretary Wes Streeting described the chant as “appalling”, especially at a music festival – “when there were Israelis at a similar music festival who were kidnapped, murdered, raped, and in some cases still held captive”.
He added that while “there’s no justification for inciting violence against Israelis… the way in which Israel’s conducting this war has made it extremely difficult for Israel’s allies around the world to stand by and justify”.
Lucy McMullin, who was in the crowd for Bob Vylan, told Sky News: “When there’s children and civilians being murdered and starved, then I think it’s important that people are speaking out on these issues.
“However, inciting more death and violence is not the way to do it.”
Police have said they are reviewing footage of both the Bob Vylan and Kneecap sets to assess whether any criminal offences were committed.
Speaking to Sky News earlier today, women and equalities minister Baroness Jacqui Smith said the comments “clearly” over-stepped the mark.
“I’m surprised that the BBC carried on broadcasting them live when it was obvious what was happening.”
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