Unilever warns of squeeze on profits

Household goods heavyweight Unilever yesterday warned that its profits were being squeezed as it struggles to pass soaring commodity costs to cash-strapped consumers.

The maker of Persil and Marmite said sales increased by 7 per cent to €10.9 billion (9.7bn) in the first quarter of 2011 as strong demand in emerging markets such as China made up for declining volumes in Western Europe.

But the group said it is not increasing its prices as fast as its costs, which are being driven upwards by the soaring cost of oil.