Unilever braces for inflation amid tariff uncertainty – what does it mean for investors?

Consumer-goods giant Unilever has made steady progress simplifying its operations. Will tariffs now cause turbulence?

Unilever logo outside building
(Image credit: Poulssen via Getty Images)

Unilever CEO Fernando Fernandez has warned that “inflationary pressures” may hit some of its most profitable divisions, says Emma Taggart in The Times. He claims to have seen “some return of commodity inflation”, though so far only in “a few families of materials”. He thinks that Unilever’s emphasis on localised supply chains mean that Trump’s tariffs will have only a limited direct impact on its sales, but they will certainly not help what is becoming “a more challenging macroeconomic environment” in the firm’s largest market.

Unilever isn’t the only food producer to worry about gloomier economic conditions, both in the US and elsewhere, say Madeleine Speed and Gregory Meyer in the Financial Times. Rival conglomerate Nestlé also warned that “weary shoppers would have to swallow higher prices”. PepsiCo and Procter & Gamble have also cut their outlooks for the year owing to “tariff-related uncertainty”. While all these companies were able to get away with passing on increased costs during Covid, this time around many consumers may “not stomach” further price rises.

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Dr Matthew Partridge
Shares editor, MoneyWeek

Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.

He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.

Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.

As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.

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