Unilever and Nestlé indicate more price increases may be on way amid market uncertainty

Unilever and Nestlé have raised prices for consumers – and indicated further increases could be on the way amid cost inflation and Donald Trump’s tariff war.

Fernando Fernandez, the new boss of the Marmite, Dove and Domestos owner, Unilever, said the company had “seen some commodity inflation returning” in recent months that could flow through to more price rises. However, Unilever will be “very cautious” in its approach, Fernandez said, with increases the “last resort to which I go. Before that we will try to manage our cost base”. Unilever put up its prices by an average 1.7% in the first three months of this year.

The company said prices had fallen in the UK in recent months and were virtually flat in Europe but were up by just over 2% in North America and more than that in Latin America.

Fernandez said Unilever was seeing inflation on commodities such as dairy, cocoa and palm oil but its beauty products may also face higher costs on imported packaging and some ingredients because of new tariffs imposed by the Trump administration.

The potential rise in costs on its beauty products coincides with slowing sales of premium skincare ranges as a boom in that market tails off, Unilever said.

Nestlé, which owns brands including KitKat biscuits and Felix cat food, said its prices had risen by just over 2% in the first three months of the year including a 3.2% rise in Nespresso coffee pod prices amid cost inflation on coffee and cocoa.

These price rises helped lift total sales by 2.8% with strong growth in confectionery and coffee but slower sales of pet food.

It said that the impact of tariffs on consumers, currencies and commodity prices was still unclear but “overall, the situation continues to be dynamic, with heightened risks and uncertainty”.

Despite the tricky market and “uncertain macroeconomic environment” Unilever said it was ploughing on with plans to separate off its ice-cream business which includes Magnum, Cornetto and Ben & Jerry’s.

Fernandez said the listing was the “better option” in the environment and there were no plans to sell Ben & Jerry’s separately despite reported interest from one of the brand’s founders amid tension over political issues.

It has been reported that Unilever has threatened to pull funding, which amounts to about $5m, from the brand’s charitable foundation amid a legal row over alleged efforts to dismantle the brand’s independent board and end its progressive social activism on issues such as the war in Gaza.

Fernandez admitted that Unilever had written to Ben & Jerry’s to ask for further information to “ensure funds are used properly” and were not being directed to “areas and executions” that were not part of their agreement.

He added that Ben & Jerry’s was “not for sale” as a separate entity and the ice-cream listing would go ahead in September.

In a separate update PepsiCo, the soft drinks and snacks group, said it was no longer expecting profit growth this year as new tariffs will drive up supply chain costs.

Ramon Laguarta, the company’s chair and chief executive, said: “As we look ahead, we expect more volatility and uncertainty, particularly related to global trade developments, which we expect will increase our supply chain costs. At the same time, consumer conditions in many markets remain subdued and similarly have an uncertain outlook.”