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Expert Comment: Love ‘em or hate ‘em, you’ll still buy them!

supermarket 150x150 Monday 17 October 2016

Tony Bradley, Professional Tutor in Business Management at Liverpool Hope Business School, discusses the price dispute between Unilever and Tesco, and what effect it may have had on consumer brand perception. 

So, did you feel the love?  The spat between Unilever and Tesco, over their pricing dispute, concerning dozens of brands stacked on supermarket shelves, ended at 5.57pm on Thursday, only 12 hours after it was first reported.  The global food, detergents and cosmetics company issued the following statement:

“Unilever is pleased to confirm that the supply situation with Tesco in the UK and Ireland has now been successfully resolved. We have been working together closely to reach this resolution and ensure our much-loved brands are once again fully available. For all those that missed us, thanks for all the love.”

Now, if that didn’t make you re-evaluate your view of Marmite, well, you must have a gooey black heart.  To receive such an uplifting message from one of the world’s largest and most profitable global corporations was bound to change your perception of the face of contemporary food and personal product manufacturers.  Or, possibly, not?  Kantar’s global ranking of the world’s most chosen brands[1] shows that Unilever is the only FMCG (fast-moving consumer goods) manufacturer to have three brands in the top 10 (Lifebuoy, Knorr and Dove).  The latter – with its brilliant ‘campaign for real beauty’ - is the second fastest-growing brand worldwide, after Oral-B toothpaste. 

But, what has surprised - maybe even shocked - many consumers, about the spat with Tesco, is the extent of Unilever’s market dominance and the number of brands it owns.  The Anglo-Dutch company, which began life in the mid-19th century, on Merseyside - as Lever Brothers, of Port Sunlight - has the largest multi-brand footprint of any global manufacturer.  It is estimated that half of all UK households has at least one Unilever product in its cupboards at any one time and that one-third of all households globally has the same.  That is market penetration on an astronomical scale.

Nor is Unilever one of the ‘bad boys’ of global business, chastised by our current political school-ma’am, in her opening address to this year’s Conservative Party Conference.  Theresa May wanted to ‘ma’am-out’ (sorry!) many of the worst practices of top companies and their chief executives, in a speech that drew a stinging rebuttal from the CBI (Confederation of British Industry), who accused the new PM of casting business leaders as ‘pantomime villains’.  In fact, Paul Polman, the Chief Exec of Unilever is very far from being the corporate equivalent of Abanazer (trading an Aladdin’s lamp of supposedly-magical products) or Captain Hook (wanting to bring an end to the Peter Pan eternal childhood of many competing brands).  Paul is one of the ‘good guys’.

When Polman launched Unilever’s ‘Sustainable Living Plan’ in 2010, it was with the express desire to raise the living standards of the bottom Billion, to half the corporation’s global carbon footprint within a decade and to double the wages of their workers, particularly back-up the supply chain to their primary producers.  Polman is a member of Branson’s ‘B-Team’, charting a course for 21st century business-as-unusual, that places ethical trading and social good (not simply CSR) as the primary purpose of contemporary business.

But, despite all this, which is far from ‘green-wash’, the current spat, in the wake of a 14% devaluation of £Sterling against the Euro and 11% against the $US, shows that markets have a habit of rapidly undermining even the most ethical instincts of global corporations.  And, worse still, when the usual back-room haggling gets into the public domain this can cause substantial reputational damage within hours, as Unilever has, undoubtedly, suffered.  Fortunately, most people won’t connect their Pot Noodle or Ben & Jerry’s Ice Cream with this spat for very long.  Most of us will not be moved in our view on Marmite.  But, we may take a little longer to recover our full love affair with Unilever – caveat emptor! 

[1] The latest available report from Kantar’s FMCG Global Footprint survey is for 2012.  It is available at: www.kantarworldpanel.com/dwl.php?sn=news_downloads&id=320 

Tony Bradley, Professional Tutor in Business Management, Liverpool Hope Business School

Liverpool Hope University Business School 

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