Tesco is struggling to stock key staples after price row with Unilever

Oliver Gill
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Marmite, the traditional British vegetable paste,
Tesco is running out of staple products such as Marmite and PG Tips (Source: Getty)

Tesco boss Dave Lewis is on a collision course with the company where he earned his stripes after the supermarket revealed it was running out of staple products such as Marmite and PG Tips.

The supermarket giant said that it was running low on Unilever products and it is understood that this was as a result of a row between the two FTSE 100 groups over pricing. Following the weakening of sterling in recent weeks, Unilever is believed to have wanted to increase its prices to compensate for the increased cost of products made abroad.

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A price hike contradicts a key initiative by Lewis, who spent 27 years working for Unilever, to focus on stores selling at lower prices.

However, Unilever could be using the drop in the pound to increase margins. A source close to the supermarket told the Guardian: "Unilever is using Brexit as an excuse to raise prices, even on products that are made in the UK."

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Tesco confirmed this afternoon that it was having some problems stocking some lines. "We are currently experiencing availability issues on a number of Unilever products. We hope to have this issue resolved soon," said a spokesperson for the supermarket.

Unilever remained tight-lipped and declined to comment on the situation, or even on how many products sold to Tesco were made in the UK.

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The news comes after the former boss of Tesco's rival, Sainsbury's, predicted Britain's shops will have to start raising prices following the weakening of sterling. As many retailers import their goods from abroad and pay for them in foreign currency, their cost has increased as sterling has dipped. Justin King said that it would be impossible for shops to absorb the higher costs of raw materials and imported products without charging customers more.

King isn't alone in such a belief: BT's chairman Mike Rake said the costs of mobile phone handsets were likely to increase as a result of the pound's slump.

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