FOOD INFLATION is returning in force, with Unilever the latest company to forecast price rises this year.

The Anglo-Dutch maker of Dove soap and Lipton tea, which has seen negative pricing for five straight quarters, said Latin America had already reversed course to become the first continent to weather price increases.

This follows similar comments from fellow food producers General Mills and Kellogg, which expects to raise prices by 200 to 300 basis points next year.

Food groups that pushed through price increases in the third quarter include Danone of France and Kerry Group.

Unilever’s comments came as it surprised the market with a better-than-expected set of third-quarter results. Organic sales growth rose 3.6 per cent year-on-year while the underlying operating margin – which many analysts were expecting to narrow – expanded by 20 basis points.

The company reported “difficult” conditions in Ireland, Spain and Greece.

While Unilever is winning market share in a number of areas in Europe, "the real aim for us is more consistent performance", chief financial officer Jean-Marc Huet said yesterday. "The consumer in Europe isn't well and that will continue for a while." – (Copyright The Financial Times Limited 2010/Bloomberg)