Unilever warns price rises will stay constrained

CONSUMER products giant Unilever yesterday warned that its ability to increase prices will remain constrained despite the prospect of rising commodity costs, sending its shares down by more than 5 per cent.

The group, which is facing strong levels of competition and weak economic conditions in some of its major markets, said prices were down 2.6 per cent in the half year although this was more than offset by volume growth of 6.6 per cent.

The growth was driven by emerging markets, while disruption caused by economic uncertainty in countries such as Greece and Spain reduced European volumes growth to 1.7 per cent. Unilever said its personal care division delivered the strongest growth, with deodorants leading the way.

Chief executive Paul Polman said the company's second quarter had been "robust" with volume market share growth in all of its regions. He said this reflected brand innovation and the roll-out of products into new markets.