Colman’s owner Unilever to sell off margarine brands – but mustard stays

Colman's Mustard made by Unilever.

Colman's Mustard made by Unilever. Picture: ANTONY KELLY - Credit: Archant

Colman's Mustard owner Unilever is to offload some of its best known brands including Flora margarine and Stork butter, as well as make an extra two billion euro (£1.7bn) in cost savings, following a review of the business.

The Anglo-Dutch consumer goods giant, which has a factory in Norwich, concluded that the future of its underperforming spreads business, which also includes I Can't Believe It's Not Butter, 'now lies outside the group'.

Unilever said: 'In 2015 we set up a separate baking, cooking and spreads unit to allow greater focus on the issues facing the business.

'The unit has responded well to this focus, reducing costs, increasing cash generation and holding market share.

'However, the underlying category remains challenged in developed markets and we have now taken the decision to launch a process to either sell or demerge spreads.'

It has been reported that the sale of the division could yield up to £6bn for the group.

The review was aimed at delivering more value to shareholders after Kraft Heinz's failed $143bn (£115bn) takeover attempt and it will also see job cuts across the company.

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Unilever said that it has increased its overall cost savings target from €4bn (£3.4bn) to €6bn (£5.1bn), to take place over the next three years.

In addition, Unilever plans to combine its foods and refreshments business in a bid to boost growth.

Chief executive Paul Polman said: 'Our recent review concluded once more that our strategy for long-term value creation through growth and compounding returns on investment is the right one for Unilever and for our shareholders.

'It also highlighted the opportunity to go faster and further.'

The group will also buy back five billion euro worth of its shares, boost dividends by 12% and review its 'dual-headed' legal structure.