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Brexit: Slump in the pound puts Tesco and Unilever at loggerheads

UK grocer Tesco has opted to pull some of the most well-known food brands off its website as part of its ongoing dispute with Unilever over wholesale prices.

The disagreement, which came about after the Dutch consumer company demanded 10% higher prices at wholesale, has meant brands such as Marmite, Pot Noodle and PG Tips are no longer available at Tesco’s online store.

Consumers can still buy Unilever products in-store, but Tesco has stated it has no intention of restocking brands while the dispute rumbles on, which could see shelves run empty.

The row has arisen in recent days after the global food and consumer goods giant began demanding steep price increases in an attempt to offset costs associated with the weaker pound against the dollar and euro.

A Tesco spokesperson said: “We are experiencing availability issues on a number of Unilever products. We always work to ensure customers get the best possible prices and we hope to have this issue resolved soon.”

The pound has fallen nearly 17% since the EU referendum, and with the continued lack of clarity surrounding the government’s plans for Brexit negotiations could potentially fall even further.

Unilever has made little secret about the fact that a plummeting pound would inevitably have repercussions for the British shopping basket, with its Chief Executive, Paul Polman, warning all the way back in July that price increases were a matter of if, not when.

He said: “Anybody who is importing things from Europe – raw materials, not only finished products – will have to eventually reflect that pricing because you are not going to go down in profitability and go out of business.

“The manufacturers decide pricing, Brexit alone doesn’t decide pricing. But if you have a 15% decline in your currency relative to the euro, then you have a higher cost base.”