Unilever blames UK-made Marmite price hike on Brexit
The issue is being blamed on t...
The UK’s biggest retailer, Tesco, has ceased sales of many household items due to a dispute with Unilever over prices.
The issue is being blamed on the outcome of the EU referendum. The pound has dropped 16 percent post-Brexit, and Unilever has increased some of its prices in response. Tesco, however, is resisting this move, meaning that its reserves of Marmite, Hellmann’s products, and Ben & Jerry’s ice cream are running low.
Unilever’s argument seems to rest on the fact that importing to the UK is now more expensive due to the devaluation of the sterling, yet Marmite – the one staple product which appears to be causing the most alarm – is manufactured in Britain, and it has been for well over 100 years.
Other Unilever brands that are created in the UK include Colman’s English Mustard, Elmlea, and Pot Noodle. Retailers should not have to fear stocking these items, as they remain unaffected by import costs.
This has caused an impasse between Tesco and Unilever; while the retailer creates its own yeast extract spread, as well as selling the Australian alternative Vegemite, Marmite holds a great deal of brand power, and Unilever is clearly banking on this.
This dispute has caused share prices for both companies to drop, but Unilever’s CFO Graeme Pitkethly has stated that he expects the issue to be resolved quickly.
Nick Lee, a Professor of Marketing and a researcher of sales management at Warwick Business School, offered the following comment: "In a lot of ways, this is normal negotiation practice that has all of a sudden had a light thrown on it thanks to Brexit.
"On the one hand, you have a brand owner who considers itself to have the main negotiating power, since they feel consumers buy brands over categories. On the other hand, you have a powerful retailer who judges that consumers will not change behaviour simply because a selection of brands may not be available.
"In a sense, they are both right, and both wrong. Indeed, in many situations, consumers are brand loyal, and Marmite is probably one of those.
"On the other hand, Tesco is right that most consumers are unlikely to change their shopping habits just because a few non-substitutable brands are unavailable. However, the question is how many brands are in play here?
"Further, Tesco needs to realise that supermarket switching is far easier than it used to be in today's online retail environment. I think they need to be careful about influencing consumers to 'try' another provider, because if they do, they may not come back to Tesco. All around, its a somewhat dangerous game being played by both parties.
"But in essence, both realise this is a negotiation, not an ultimatum. They need each other, but are jockeying for best position in a new uncertain environment. I expect we'll see a lot of this in the coming months as players in this space look to renegotiate deals, and try to play on public sympathy to pressure their negotiation partners."
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Ultium Cells LLC/Li-Cycle: Sustainable Battery Manufacturing
Ultium Cells LLC - a joint venture between General Motors and LG Energy Solutions - has announced its latest collaboration with Li-Cycle. Joining forces the two have set ambitions to expand recycling in North America, recycling up to 100% of the scrap materials in battery cell manufacturing
What is Ultium Cells LLC?
Announcing their partnership in December 2019, General Motors (GM) and LG Energy Solutions established Ultium Cells LLC with a mission to “ensure excellence of Battery Cell Manufacturing through implementation of best practices from each company to contribute [to the] expansion of a Zero Emission propulsion on a global scale.”
Who is Li-Cycle?
Founded in 2016, Li-Cycle leverages innovative solutions to address emerging and urgent challenges around the world.
As the use of Lithium-ion rechargeable batteries in automotive, industrial energy storage, and consumer electronic applications rises, Li-Cycle believes that “the world needs improved technology and supply chain innovations to better recycle these batteries, while also meeting the rapidly growing demand for critical and scarce battery-grade materials.”
Why are Ultium Cells LLC and Li-Cycle join forces?
By joining forces to expand the recycling of scrap materials in battery cell manufacturing in North America, the new recycling process will allow Ultium Cells LLC to recycle cobalt, nickel, lithium, graphite, copper, manganese and aluminum.
“95% of these materials can be used in the production of new batteries or for adjacent industries,” says GM, who explains that the new hydrometallurgical process emits 30% less greenhouse gases (GHGs) than traditional processes, minimising the environmental impact. Use of this process will begin later in the year (2021).
"Our combined efforts with Ultium Cells will be instrumental in redirecting battery manufacturing scrap from landfills and returning a substantial amount of valuable battery-grade materials back into the battery supply chain. This partnership is a critical step forward in advancing our proven lithium-ion resource recovery technology as a more sustainable alternative to mining, " said Ajay Kochhar, President, CEO and co-founder of Li-Cycle.
"GM's zero-waste initiative aims to divert more than 90% of its manufacturing waste from landfills and incineration globally by 2025. Now, we're going to work closely with Ultium Cells and Li-Cycle to help the industry get even better use out of the materials,” added Ken Morris, Vice President of Electric and Autonomous Vehicles, GM.
Since 2013, GM has recycled or reused 100% of the battery packs it has received from customers, with most current GM EVs repaired with refurbished packs.
"We strive to make more with less waste and energy expended. This is a crucial step in improving the sustainability of our components and manufacturing processes,” concluded Thomas Gallagher, Chief Operating Officer, Ultium Cells LLC.