Unilever Plc warned that costs for raw materials that go into shampoo, detergents and ice cream are increasing at the fastest pace in more than a decade, forcing it to scale back profitability goals for this year, APA reports citing Bloomberg.
The maker of Cif cleaners and Dove soap lowered its guidance for profitability Thursday, forecasting 2021 margins near last year’s level as improvement becomes more difficult. The shares fell as much as 4.6%.
Unilever is joining rivals such as Procter & Gamble Co. in warning of rising price pressure. Higher raw material costs have become a growing concern for manufacturers as economies emerge from Covid-19 lockdowns. More expensive crude oil, palm oil and U.S. freight costs are forcing the U.K. consumer-goods maker to raise prices on shampoo and ice cream, though the company has to move slowly to avoid shocking shoppers, Unilever Chief Financial Officer Graeme Pitkethly said.
“This is something that a business like Unilever is able to handle, but it takes time,” Pitkethly said by phone.