Consumers goods giant Unilever has warned that it will increase the price of its food products early next year due to volatility in the international commodities markets, only months after a recent 3 per cent average price rise in its entire food range.
The multinational - producer of Lyon's tea, Knorr soup, HB ice cream and Hellmann's mayonnaise - said the recent increase on products with oil and dairy ingredients was higher than the 3 per cent average.
"We are still facing a high level of increases in the cost of many of our raw and packaging materials and this means that further price increases will be required in [the first quarter] next year," said Paul Murphy, chairman of Unilever Ireland.
Unilever - which is the biggest Irish advertiser with an annual spend of €22 million - owns the deodorant brands Sure and Lynx, skincare brands Dove and Vaseline and household products Persil and Domestos.
The group has halved its staffing levels in Ireland from 707 in 2004 to a likely figure of 350 at the end of this year. With its parent now engaged in a new effort to cut its global staff by 20,000, Mr Murphy said certain Irish positions were under review.
He declined to specify the activities in question or put a figure on the number of jobs at risk but said the process was likely to conclude within months. "Nothing is determined in relation to the Irish operation. Nothing is determined as of yet."
Newly-filed accounts for the Irish unit show that its pretax profit fell to €26.62 million in 2006 from €45 million while turnover fell to €345.71 million from €350.39 million. Like-for-like sales rose to €311.8 million from €307.3 million.
The drop in top line revenues was attributed to the sale of the Bird's Eye unit last November, which resulted in an exceptional gain of €31.2 million in the Irish accounts.
This gain brought the business into a pretax profit position after it booked an operating loss from continuing operations of €13.25 million, down from an operating profit of €20.76 million in 2005.
The reversal of this position followed exceptional charges of €32.26 million, €1.82 million of which related to the Bird's Eye sale. The remaining €30.43 million arose from the closure of a factory in Inchicore, Dublin, and the cost of introducing a concessionaire distribution model for its ice cream brands.
"The significant bulk of change had happened going into 2007. We're seeing a lot of the benefits of everything that has been done in the last few years," Mr Murphy said. "2005 and 2006 were pretty heavy years of change. In 2007 from a trading point of view, we've now got a much sharper focus on our brands and categories and we're seeing the benefit of that."
Mr Murphy said the company was increasing its market share in six of its eight leading categories.
