In a statement following the company’s third quarter results statement, industrial relations outfit Unilever Euro Works Council (UEWC) claimed Unilever “has destroyed 70,000 jobs in Europe over the past 10 years”.
It was citing Harald Wiedenhofer, general secretary of the European Federation of Food, Agriculture and Tourism trades unions. “This is sustainable for profits, but not for employment,” added the UEWC.
However, Unilever responded by stating: “In Europe we have continued to invest in our foods category: with the Flora full revamp in the UK in September (Goodness of Sunflower) and in the launch of Rama with butter in Germany.
“We also celebrated Hellmann’s 100th birthday and – more recently – Knorr’s 175th birthday.”
Investment
The Anglo-Dutch consumer goods giant pointed to its investment in new innovations in personal care and cleaning products categories, although it did not flag up any in the food and drink sphere.
The UEWC stated: “Tens of thousands of jobs have been destroyed because the brands have been reduced from 1,600 to 400, organisational structures have been simplified and companies, such as the recent case of the European Frozen Foods business, have been sold.”
“The recent corporate strategy ‘Compass’, which aims to double the business while halving CO2 emissions, has not brought the about-turn that was hoped for, at least not for Europe.
“In addition, eight factories have been closed in Europe since 2010. This was part of the cause of over 4,000 jobs being cut.”
Frustration
UEWC chairman Hermann Soggeburg expressed his frustration that attempts to discuss alternatives to the job cuts with Unilever boss Paul Polman had been referred to the European Unilever president.
“Instead of having talks with us Polman is continuing the chosen path of restructuring and redundancies,” said Soggeburg. “Unfortunately, the public hardly notices any of this.”
The UEWC stated: “The underlying problems are self-made and not just a result of the persisting financial and economic crisis especially in southern Europe.
“Unilever focuses on the emerging markets and its own body care and ice cream divisions. The entire business in Europe suffers as a result.
“Particularly the food sector has lacked financial support in recent years. This especially applies to the long-established European margarine brands such as Becel, Rama, Flora and Latta, but also Knorr.”
Unilever reported underlying sales growth of 3.2% for its third financial quarter (Q3) yesterday (October 24) and underlying sales growth of 4.4% for the first nine months of its financial year.
Q3 underlying volume growth was 1.9% and 2.4% over nine months. However, overall turnover fell 6.5% to €12.5bn in Q3, hit by unfavourable exchange rates around the world.
Underlying value sales for food fell
While other categories saw global growth, underlying value sales for food fell 0.3% in Q3, while underlying volume sales fell 1%. Underlying sales in its refreshment category, including ice cream and ready-to-drink iced teas and soft drinks, grew by 0.7%, but underlying volume sales fell by 1.6%.
The company said it continued to take action to make its spreads healthier.
“We have not yet seen an improvement in market conditions in North America or Europe,” said Polman.
Investec analyst Martin Deboo called Unilever’s performance in its refreshment category “worryingly muted … despite what we expected to be a strong ice cream season”.
He noted Unilever was also beginning to see an anticipated slowdown in emerging market sales and continued to press for more radical action on foods disposals.