Heat finally taken out of mustard price row

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

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

Nothing says Norwich quite like a jar of Colman's mustard.

But for several hours yesterday there was fear among shoppers there would be shortages of the iconic city brand following a pricing row between Unilever and Tesco.

And with Norwich and the rest of the county on yellow alert during the stand-off, your Norwich Evening News had even stockpiled about 20 jars of the hot stuff at our Rouen Road head office in case shelves were cleared of the household favourite.

Thankfully for Colman's lovers across the city and throughout Norfolk, by last night the situation had cooled when consumer goods giant Unilever, which also counts Marmite and Pot Noodle among its brand stable, said its products were once again 'fully available'.

But retail experts have warned that the clash is unlikely to be the last as companies try to handle rising costs following the slump in the value of sterling in the wake of the Brexit vote.

Unilever is understood to have demanded a 10pc price rise due to the falling value of the pound against the dollar and the euro, and halted deliveries to Tesco when the supermarket refused to accept the price hike.

Subsequently a number of major brands, including Hellmann's Mayonnaise, had been removed from Tesco's website.

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But less than 24 hours later, the situation had been resolved – though details of the deal were not released – and a spokesman said: 'Unilever is pleased to confirm that the supply situation with Tesco in the UK and Ireland has now been successfully resolved.'

Prof Andrew Fearne of Norwich Business School at the University of East Anglia, a specialist in consumer behaviour, said: 'This is the first of many stand-offs that are inevitable as the implications of Brexit kick in and companies try to navigate a sustainable way forward.

'The problem is that some companies will use the exchange rate as a vehicle for negotiating price rises that are a) avoidable and b) could leave some of their customers uncompetitive, if they agree to pay more when others refuse.'

He said Unilever's call for price rises across the board 'sounded unreasonable' given that a weaker pound would affect the cost of different products in different ways.

Prof Fearne added: 'We have seen these stand-offs before and there is always an element of 'bluff' as the retailer tests their shoppers' loyalty to specific brands looks to exploit the opportunity to encourage brand switching.'

He said the row was 'the thin edge of a very long wedge in the world of fast moving consumer goods'.

Consumers have enjoyed four years in a row of falling retail prices, but the pressures of the weak pound is set to bring this to an end, with a New Year price surge predicted as retailers pass on higher costs after the festive season.

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