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Italy fines Unilever over €60 million over ice cream market abuse

December 16th, 2017

In the conclusion of an investigation from back in 2013, Italy’s antitrust agency AGCM has fined Unilever over €60mn for ice cream market abuse.

Italy’s antitrust agency AGCM has imposed a fine of over €60mn on the Italian arm of the world’s biggest ice cream maker, Unilever, for ‘abuse of its dominant position in Italy’s ice cream market’.

Amongst the statements made by the agency included that of Unilever having abused its position in single-wrapped, ‘impulse’ ice creams for immediate consumption, markets under the company’s Algida brand.

The original investigation dates back to 2013 when La Bomba, a small producer of organic fruit lollies, came forth with allegations that Unilever was forcing local businesses to not sell its products by striking deals with businesses in the seaside town of Rimini (also La Bomba’s home base) to exclusively sell Unilever’s ice creams.

The investigation revealed that in accordance with these allegations, Unilever’s clients had indeed been ‘obliged’ to sell its brand of ice cream, causing ‘substantial prejudice to the final decision of consumers’.

AGCM also stated that the ice cream market in 2015 was worth €5.15bn, and the individually-wrapped market was worth €780mn.

Unilever markets its products in Italy under the Magnum, Carte d‘Or and Cornetto ice cream brands, and also produces other food, home and personal care goods, making its yearly profits around €1.4bn a year in the local market.

In response, the company has ‘firmly rejected’ the outcome of the investigation, and has announced its decision to lodge an appeal. This appeal can be made at a regional court.

“The market for ice cream (to be consumed) outside the home is a highly competitive one in which artisan and industrial, bulk and packaged products compete for the consumer’s attention in a fragmented landscape that is like no other in Europe,” Unilever added.

Source: Asia Food Journal

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Australian ice cream company Weis to be acquired by Unilever

August 12th, 2017
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Unilever has agreed to acquire Australian ice cream business Weis – the maker of the iconic Fruito Bar – for an undisclosed sum.

The deal sees Unilever continue to develop its ice cream range around the world, with Weis joining other Unilever brands such as Grom, Ben & Jerry’s and Talenti, which Unilever acquired in December 2014.

Unilever Australia & New Zealand chief executive officer Clive Stiff said: “We are delighted to bring Weis’ exciting and delicious range into our portfolio, adding another Australian favourite to our leading ice cream range. This acquisition will bring Weis the benefits of scale, strong market access and ice cream category expertise to help take the business to the next level in its growth.

“We are committed to providing Weis consumers and customers with the same exceptional products [made from] the same high-quality natural ingredients. We look forward to welcoming Weis’ strong, dedicated and passionate team to Unilever.”

Weis is a second-generation ice cream and frozen dessert manufacturer, founded in 1957 by Les Weis with the original Fruito Bar. Its product range features a variety of ice cream formats including single bar, multi-pack bars, dairy-free sorbet tubs and frozen yogurt tubs.

The firm’s ice creams will continue to be made in its factory based in Toowoomba, Queensland. Unilever has today also announced a buyback programme for the majority of its outstanding 6% and 7% preference shares – part of the reforms set out in the wake of Kraft Heinz’s failed bid.

Weis managing director Julie Weis said: “Our family made this decision because Unilever demonstrated their understanding of our brand, our products and how important our people and the Toowoomba manufacturing site are in ensuring Weis’ success into the future.

“In addition, Unilever’s scale will enable greater market access and growth that will provide opportunities for our extended Weis family of staff, suppliers, customers and – of course – our wonderful consumers.”

The acquisition is subject to customary closing conditions and terms of the deal were not disclosed.

Source:  foodbev.com

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Unilever plans to sell certain food brands

March 25th, 2017
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British-Dutch multinational company Unilever is reportedly planning to divest certain food brands from its consumer goods portfolio for £6bn.

Flora margarine spread and Stork butter brands are among the brands that are likely to be sold by Unilever, as reported by the Sunday Times.

As per the publication, Bain Capital, Clayton Dubilier, Rice and CVC are some of the private equity companies that working on deals for Unilever’s spreads business.

The consumer goods firm is yet to issue a formal statement about the divestiture.

Last month, Unilever had declined American food manufacturer Kraft Heinz’s $143bn merger proposal.

The two companies had amicably decided not to go further with the deal which had the potential to become the biggest takeover in the food industry, with sales revenue from the combined entity estimated at $84.8bn.

Unilever’s shareholders were to get $50 per each share as part of the deal with Kraft Heinz.

However, the deal could not go ahead with Kraft Heinz announcing that it found it too difficult to pursue a transaction with Unilever, as reported by the Reuters.

Unilever released a statement saying that there was no merit, either financial or strategic, for the company’s shareholders. Following which, the company announced the launch of a comprehensive review of options it had to “accelerate delivery of value” for the benefit of its shareholders.

Earlier in the month, British trade union GMB had urged Unilever to reassure its workers following the failed takeover by Kraft Heinz.

GMB said that it is concerned that the botched takeover could lead Unilever in cost-cutting measures that include sacking some of its employees to boost profits and appease shareholders.

Source:  food-business-review.com

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Unilever stung into action by Kraft

February 25th, 2017
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Think of Kraft Heinz’s assault on Unilever as a slap in the face for management. It was short-lived, shocking, and will smart for a good while yet.

It’s a slap that says “we think we can do a better job for your shareholders than you”. That is not a message you want to get lodged in shareholders minds if you are Unilever’s management and today the company acknowledged the sting.

“Unilever is conducting a comprehensive review of options available to accelerate delivery of value for the benefit of our shareholders. The events of the last week have highlighted the need to capture more quickly the value we see in Unilever.”

That is the sound of a company cheek smarting.

It is very rare for corporate raiders like Warren Buffett (24% owner of Kraft Heinz) and Brazilian financier Jorge Lemann (owner of 3G) to back off so quickly. Once you dangle higher returns in front of pragmatic investors, they usually want to see what the next chat up line might be.

‘Unsustainable’

The Unilever management will take some pride in the fact they convinced some of their own major shareholders to back their rejection of the offer so flatly. The management argument, as told to me by senior management, went something like this.

Yes – Kraft has much higher profit margins than Unilever (23% compared to 15%) so looks like the better operator. But – Kraft habitually invests less in the future, therefore has lower organic (internally generated) growth and is saddled with more than average amounts of debt.

As a result it needs to acquire other companies to keep the growth going and pays for it by using yet more debt, which is financed in part with cash the target company has in the bank.

That model, argues Unilever, is not sustainable. Before long, we would be part of an underinvested, short-term profit-seeking, company-eating machine. As soon as Unilever had been digested, Kraft would be hungry again.

When the management of the company you want to buy REALLY don’t want to sell to you, you can always go over their heads, cut them out of the negotiation and appeal directly to the shareholders.

But “going hostile” costs a lot more money and excites much more regulatory and political interest than a deal which the management recommends.

Many UK politicians welcomed the Kraft defeat as a victory for responsible long-term thinking by one of Europe’s biggest companies and its shareholders who wisely eschewed the Jerry Maguire “show me the money” approach.

It’s lucky for them they did. It will give the government a bit more time to figure out their own play book for how to deal with future bids – which are certainly coming thanks to the discount UK companies are selling at thanks to a near 20% depreciation in sterling post-referendum.

‘Bidders wary’

At the World Economic Forum in Davos last month, I spoke to half a dozen US executives who were running the rule over potential UK targets – big and small.

Current rules only allow the government to intervene when takeovers could compromise financial stability, national security or media plurality.

Targets I heard discussed included food and drink, engineering and technology companies based or listed in the UK with foreign earnings potential. You can come up with a reasonably long list using those criteria.

Despite a few eye-catching deals like Japan’s Softbank swoop on ARM Holdings and the upstart company Skyscanner being sold to a Chinese rival, there is no flood yet.

In fact, merger activity overall is still subdued as bidders are still wary of the prospects for UK companies with exposure to domestic and EU markets until greater clarity emerges on the future relationship between the two.

As Kraft Heinz retreats with its tail between its legs for now there is plenty of food for thought for both Unilever and government.

Unilever’s CEO Paul Polman has been warned that if he doesn’t focus more on the bottom line, someone else will.

The government may have to decide quickly whether foreign takeovers are a sign of confidence in the UK to be welcomed or opportunistic raiding parties to be resisted.

Source: BBC

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Unilever to open new global foods innovation center in Netherlands in 2019

October 15th, 2016
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Unilever has announced that it will invest undisclosed amount to establish a new global foods innovation center in the Netherlands.

The innovation center is expected to be fully operational by April 2019.

Located in Wageningen, the new centre will house its food unit’s research and development (R&D) organizations that are currently located in Vlaardingen (the Netherlands), Heilbronn (Germany) and Poznan (Poland).

It will accommodate a total of around 550 employees.

Unilever Europe president Jan Zijderveld said: “The Agri-Food Innovation climate in The Netherlands is very strong.

“The co-location of all elements of our Foods R&D organization within the Foods Innovation ecosystem in Wageningen will enable Unilever to strengthen its ability to develop cutting edge Foods innovations in close collaboration with the Wageningen University & Research (WUR) and a broad variety of other science institutes and startups”.

According to Unilever, with co-locating R&D resources of its home care, personal care, foods and refreshment into key R&D locations, it can create critical mass in expertise areas.

Besides, the move will enable the company to ensure that the technologies it develops eventually result in breakthrough innovations to the markets.

Additionally, the London based multinational fast moving consumer good company said that its aim is to develop its R&D sites gradually into innovative ecosystems while taking complete advantage of its external partners’ knowledge and expertise.

Unilever Foods president Amanda Sourry said: “The Foods Innovation ecosystem in Wageningen will bring together a strong combination of in-house R&D and external science and technology, talent and facilities, increasing the impact of Unilever’s own resources and capabilities, and ultimately creating the innovative power that we need to provide leadership in Foods”.

Apart from the foods R&D, the company is also set to relocate its home care and  personal care R&D facilities to the Innovation ecosystems in Port Sunlight while its refreshment organizations will be moved to Colworth Science Park.

All these R&D facilities are currently based at the Vlaardingen which will be shut down in the course of time.

Source:  food-business-review.com

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Unilever introduces raft of ice cream innovations for US market

April 2nd, 2016
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Unilever has rolled out a series of frozen ice cream innovations in the US across five of its best-known ice cream brands, including Klondike, Magnum and Popsicle.

The new products, inspired by “nostalgic favourites”, include a double raspberry edition of Magnum, tropical paradise-flavoured Popsicle ice lollies, and flavour extensions to both Breyers’ ice cream and gelato ranges. For the first time, Breyers has also introduced a line of conveniently pre-portioned snack cups, perfect for a quick treat or fun gathering.

Nick Soukas, director of ice cream for Unilever, said: “At Unilever, we’re on a consistent journey to better understand the connection consumers have to ice cream. We’ve discovered that nostalgia and memorable moments are two reasons consumers enjoy ice cream. With this in mind, we’ve reimagined favorite flavours and pairings that cultivate great memories – like birthday cake, s’mores and chocolate and peanut butter – to surprise and delight our ice cream fans.”

As well as additions to its Klondike, Magnum, Popsicle and Breyers brands, there are also two new products joining Unilever’s Good Humor range of frozen desserts.

In full: Unilever’s new products

  • Breyers ice cream cake, combining Breyers chocolate ice cream with chocolate crunchies, sandwiched between Breyers natural vanilla ice cream.
  • Breyers chocolate peanut butter, featuring Breyers chocolate ice cream with a real peanut butter swirl.
  • Breyers coconut fudge, with real coconut shreds and a fudge swirl for a decadent dessert combination.
  • Breyers chocolate snack cups, bringing together smooth Breyers chocolate ice cream, made with fresh cream and rich Dutch cocoa, in a pre-portioned snack cup.
  • Breyers natural vanilla snack cups, which include Breyers natural vanilla ice cream in a pre-portioned snack cup.
  • Breyers Gelato Indulgences chocolate fudge truffle, which features creamy milk chocolate gelato with a rich fudge swirl and gourmet chocolate truffles.
  • Breyers Gelato Indulgences chocolate hazelnut, combining chocolate gelato with hazelnut flavour, a luscious chocolate hazelnut sauce and gourmet chocolate curls.
  • Breyers Gelato Indulgences peanut butter chocolate, blending creamy peanut butter gelato with a milk chocolate swirl and gourmet chocolate peanut butter cups.
  • Breyers Gelato Indulgences salted caramel truffle, with salted caramel gelato,  a creamy caramel sauce and gourmet salted caramel truffles.
  • Good Humor Oreo Cone, with its chocolate wafer cone, filled with frozen cookies and cream dessert and topped with real Oreo pieces.
  • Good Humor double chocolate chip cookie sandwich, with frozen chocolate-flavoured dessert coated in chocolate chips and sandwiched between two chocolate chip cookies.
  • Klondike S’Mores, featuring creamy marshmallow ice cream laden with sweet graham cracker swirls inside a breakable milk chocolate shell.
  • Magnum Double Raspberry, featuring refreshing raspberry ice cream, raspberry sauce and a crackling coating made with rich Belgian chocolate.
  • Magnum Double Chocolate vanilla, offering a balance of silky vanilla bean ice cream, decadent chocolate sauce and a crackling chocolate coating.
  • Popsicle tropical paradise, available in mango, strawberry-banana, island punch, and pineapple flavours.
  • Popsicle sugar-free red classics, providing a better-for-you treat in all red flavours including cherry, raspberry and strawberry.
  • Popsicle Teenage Mutant Ninja Turtles, complete with Michelangelo, Donatello, Raphael and Leonardo in four flavours.

Source:  foodbev.com

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Unilever Executive Joins PureCircle as New Chief Financial Officer

February 20th, 2016
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PureCircle, the world’s leading producer and marketer of high purity stevia ingredients, has announced the recruitment of its new Chief Financial Officer, Mr. Rakesh Sinha. Sinha will replace current CFO, Mr. William Mitchell who previously announced his retirement.

Sinha will join the Company from Unilever where across his 17 year career he has held a number of senior finance and strategic roles in both developed and emerging markets, including Finance Director of the Australian & New Zealand Ice-cream business and CFO of Unilever Taiwan & Hong Kong. He is currently CFO (Latin America, South and Eastern Europe) at Unilever Food Solutions and brings with him a strong track record of commercial leadership, profitable growth delivery, and strategy development and deployment.

Prior to joining Unilever, Sinha worked for BHP Billiton and Time-Life International. He is a British-Australian dual national, UK qualified Chartered Accountant, a Chemical Engineering Graduate from the University of Leeds and holds an MBA from Erasmus University, Rotterdam School of Management.

Sinha will join PureCircle on April 25, 2016 and will be based at PureCircle’s head office in Kuala Lumpur, Malaysia. Following a suitable handover period working with Mitchell, it is anticipated Sinha will join the Board as an executive director and take over from Mitchell as Chief Financial Officer on his retirement from that role.

Commenting on the recruitment Sinha as new Chief Financial Officer, the PureCircle Chairman Paul Selway-Swift said: “In seeking a replacement CFO we undertook a global search looking for candidates with the relevant experience, personal capacity and drive to help take the company to the next level of its development. The group has major long term growth plans and we are delighted to have secured the services of Rakesh Sinha to support and help lead those plans. We believe he will bring to PureCircle a great combination of relevant industry knowledge, proven international experience, strong leadership to our finance team and a valuable contribution to our Board.”

Source: foodingredientsfirst.com

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Consumer Goods Forum Makes Tough Pledge to Tackle Food Waste

June 26th, 2015
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nestle-ukThe Consumer Goods Forum (the CGF), which includes major manufacturers Nestle and Unilever, has announced its commitment to tackling the global food waste challenge by agreeing to halve food waste within the operations of its 400 retailer and manufacturers members by 2025.

Food waste is an enormous environmental, social and economic challenge. A third of food calories produced are never eaten. It represents an economic cost to the global economy of $750 billion per year and, if food waste were a country, its carbon footprint would be third only to China and the US.

The CGF’s Board of Directors has, therefore, approved a new resolution to halve food waste within the operations of its 400 retailer and manufacturers members by 2025 and to support wider UN Goals on the issue. This is yet another milestone in the consumer goods industry’s commitment to environmental stewardship and leadership.

This Food Waste Resolution is the third resolution of the CGF’s Sustainability Pillar. It complements Board-approved resolutions made in 2010 on achieving zero net deforestation by 2020 and beginning the phase-out hydro fluorocarbon (HFC) refrigerants by 2015.

Nestlé CEO Paul Bulcke, who is Co-Chair of The Consumer Goods Forum, said: “The resolution on food waste the CGF Board of Directors has adopted demonstrates our willingness to engage and take action in an area where a collective industry effort can make a difference.”

The CGF resolution complements Nestlé own recently announced commitment to reduce food loss and waste as part of its broader Creating Shared Value commitment to improve the resource efficiency of its operations.

The CGF recognises that unchecked climate change will have a huge impact on the consumer goods sector, its customers and employees. With the COP21 Climate Summit occurring in Paris later this year, this new Food Waste Resolution, together with the CGF’s work on deforestation and low carbon refrigeration, demonstrates the industry’s commitment to play a leading role in limiting global temperature rises to 2°C.

Central to the Food Waste Resolution is the aim to set a clear benchmark for food waste arisings today and set measurable goals to reduce food waste in the future. The Resolution specifically commits to aligning the industry around the Food Loss & Waste Protocol being developed by the World Resources Institute.

The Food Waste Resolution focuses on two key areas:

•    Preventing food waste, then maximising its recovery towards the goal of halving food waste within the retail and manufacturing operations of CGF members by 2025, versus a 2016 baseline.

•    Contributing to the UN goals by 2030 to:

•    Halve per capita global food waste at the consumer level; and

•    Reduce food losses along production and supply chains including post-harvest losses and maximise the value of the remaining waste.

The Consumer Goods Forum believes that the industry has a responsibility to show strong leadership on food waste reduction – a belief supported by its Board of Directors. The reason being:

•    In a world of rising population, increasing cost of food, concerns about inequality and growing food insecurity, food waste is one of the greatest challenges of our time with 30% (1.3 billion tonnes) of food produced being wasted each year.

•    Food waste is also responsible for adding 3.3 billion tonnes of greenhouse gases into the planet’s atmosphere per year. If food waste was a country it would be the third biggest emitter of greenhouse gases globally after China and the US.

•    The water footprint of food waste is equivalent to three times the volume of Lake Geneva.

•    The value of food wasted each year is $750 billion.

Paul Polman, CEO of Unilever and Board Co-Sponsor of the CGF’s sustainability work said, “The CGF commitment to reduce food waste strikes at the heart of the global climate and development challenge. It is a tragedy that up to two billion tonnes of food produced around the world is lost or wasted never making it onto a plate. At a time of growing food insecurity and climate change, we can’t afford to let this continue. This resolution marks a step change in industry leadership and is an important contribution to the longer term sustainable development agenda”.

Marc Bolland, CEO of Marks and Spencer and fellow Board Co-Sponsor of the CGF’s sustainability work said, “Tackling food waste makes sense for the consumer goods sector. It saves money, improves food security, conserves water and reduces greenhouse gas emissions – it’s an all-round win. We’re committed to helping our members significantly reduce food waste and to sharing our learnings and expertise with the wider food industry”.

In order to help CGF members implement the new resolution, an implementation plan has been developed. The plan includes key steps that will help develop a baseline, monitoring and public reporting mechanisms, communication and engagement plans and implementation toolkit.

These will all be supported by food waste-specific events and webinars that will be open to both CGF and non-CGF members. More details on these to follow.

Source: foodingredientsfirst.com

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ADM, Unilever extend partnership

January 17th, 2015
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Archer Daniels Midland Company has signed a joint business development plan (JBDP) to continue to grow its relationship as an oils and fat supplier for Unilever in Europe, North America and Africa.
The JBDP defines the long-term strategy and goals for the relationship and provides a clear framework for how ADM and Unilever will work together to achieve those objectives. It also sets measurable goals around volume, new product development, growth, innovation and sustainability.

The JDBP will help advance existing cooperation between the two companies, such as the ADM/Unilever Soybean Sustainability Program in the United States, through which ADM sources and processes sustainable soy beans and supplies Unilever with oil for Hellmann’s Mayonnaise; and ADM and Unilever’s partnership with Linking Environment and Farming (LEAF) in Europe, which promotes sustainable agricultural practices at the farm level to produce sustainable rapeseed oil for Unilever’s Flora spreads, as well as for Hellmann’s UK. The JDBP will also strengthen ADM’s existing European sustainability initiatives, particularly in Central and Eastern Europe, enhancing the company’s supply chain to provide Unilever with more sustainably-produced oils and fats products.

“ADM’s end-to-end value chain allows us control of our product flow in ways that few in the industry can offer,” said ADM senior vice-president Matt Jansen. “Strengthening our existing partnership with Unilever will allow us to build upon those capabilities and leverage our unique supply chain to continue to provide high-quality, sustainable ingredients and innovative solutions to Unilever and their customers.”

“Programs like the ADM/Unilever Soybean Sustainability Program and our joint partnership with LEAF are great examples of how we can creatively work together to deliver unique solutions for sustainable sourcing, and the JBDP will help advance that type of innovation between our companies,” said Unilever vice-president Amit Mohta. “We look forward to continuing to grow and expand our partnership with ADM.”

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Unilever agrees to acquire Ingman Ice Cream company in Finland

October 15th, 2011
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Unilever NV acquires Ingman Ice Cream in Finland, the company said in an e-mailed statement sent by PR firm Hill & Knowlton .

Ingman Ice Cream has about 700 workers with units in Sipoo, Finland, Aahus in Sweden, Mazeikia in Lithuania and Gomel in Belarus. It had 70 million euros ($95 million) in sales last year. The deal requires competition authority approvals, according to the statement.

Source: Businessweek

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