Unilever is NOT profiteering, insists departing boss Alan Jope

Unilever is NOT profiteering, insists departing boss Alan Jope as rising prices boost business

Departing Unilever boss Alan Jope insisted the company was not ‘profiteering’ as rising prices boosted business.

In his last update as chief executive of the consumer goods giant, Jope said he was ‘very conscious that the consumer is hurting’.

And he insisted rising prices – 11 per cent in the first quarter of the year – were not evidence of so-called ‘greedflation’.

Ad: Unilever, whose brands include Hellmann’s, Marmite and Dove as well as Magnum ice creams (advertised here by Eva Longoria) has hiked prices by nearly 11% in the first quarter

‘I know it’s an inconvenient truth, but we have not been profiteering in any way, shape or form,’ Jope said.

‘We’re very conscious the consumer is hurting and that’s why we are not passing through the full price increases and are asking shareholders to bear some of the burden.’ 

The comments came as the latest update from the company, whose brands include Hellmann’s, Marmite and Dove as well as Magnum and Ben & Jerry’s ice creams, showed that it successfully passed on price increases without significantly denting sales volumes.

In the first three months of the year, sales were 10.5 per cent higher than in the same period a year earlier at £13billion, driven by a 10.7 per cent increase in prices and a 0.2 per cent fall in the volume of goods sold.

This was an improvement on the fourth quarter of last year, when prices rose 13.3 per cent and volumes fell 3.6 per cent. 

Jope, who took the helm in January 2019 and will be replaced by Hein Schumacher in July, said the pace of rises is likely to ‘soften through the year’ but warned they will remain high.

‘We are past peak inflation… though we are still not past peak prices,’ he said. ‘Costs are not going down, they’re just not going up as quickly as before.’

Exit: Unilever boss Alan Jope, who took the helm at Unilever in January 2019, will be replaced by Hein Schumacher in July

Exit: Unilever boss Alan Jope, who took the helm at Unilever in January 2019, will be replaced by Hein Schumacher in July

Jope said Unilever only passed on 75 per cent of cost increases to consumers last year and he justified future elevated prices as necessary for investment.

The Scottish businessman said he anticipates further inflation in prices, particularly in food, driven by high costs of materials and climate change.

Inflation remained high in nutrition and ice cream, with prices up 13.4 per cent and 10.5 per cent respectively, although it has moderated across Unilever’s beauty and wellbeing and personal care ranges, which were up 6.5 per cent and 9.4 per cent respectively year-on-year.

Margins are often a good indicator of whether a company is profiting from higher prices.

Unilever expects a first-half margin of 16per cent, broadly in line with the 16.1 per cent figure for 2022 and below those in the previous three years.

It also predicts to have ‘modest improvement’ in margins this year. Its shares rose 1.4 per cent, or 60p, to 4431.5p, and have gained just under 8 per cent under Jope.

In that time he has been paid more than £16million and the FTSE 100 index has risen 16 per cent.

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