Unilever hiking prices as commodity costs soar amid Iran conflict

Unilever has become the latest firm to reveal price hikes to offset soaring costs amid the Iran war.

The consumer goods giant behind well known brands including Dove soap and Lynx deodorant said prices had “stepped up” in the third quarter in response to soaring commodity costs, with home and personal care products seeing increases in particular.

It revealed underlying sales grew by 5.2% in the three months to September 30, of which 2.3% was due to higher prices.

Fellow household goods firm Reckitt Benckiser said on Tuesday it was increasing prices in the face of higher inflation caused by the Middle East conflict, with prices rising by 4% across Europe in the third quarter.

But Unilever said sales growth was not just being boosted by higher prices as it nudged up its outlook for sales growth by volume, saying it now expects “at least” a 3% increase over 2026 as a whole.

It had previously said sales volumes were set to grow by around 3%.

Unilever also said it now expects underlying sales growth of about 5% in the second half of the year, compared with previous guidance of between 4% and 5%.

Chief executive Fernando Fernandez said: “We have delivered another quarter of competitive growth, led by continued strong volume delivery and a step-up in price to offset the impact of higher commodity costs.”

The group is moving to split its food business into a joint venture with US rival McCormick.

The £33.8 billion deal, which was announced in March, will create a major food giant that combines brands such as Unilever’s Marmite with McCormick’s French’s mustard.

The group said it was on track for a “timely closing” of the deal, which is expected by mid-2027.

“Separation and integration work is progressing well, led by dedicated project teams comprising more than 200 employees across 20 cross-functional teams,” Unilever said.

“There has been strong progress on regulatory approvals, with filings submitted on schedule and clear momentum across jurisdictions, reinforcing our confidence in a timely closing.”