The companies that make leading brands including Magnum ice-creams, Nescafé coffee and Ariel washing liquid have indicated that more price increases could be on the way as ingredient costs rise amid Donald Trump’s tariff war.
Procter & Gamble, whose products include Pampers nappies and Oral-B toothpaste as well as Ariel, said new US tariffs could cost it up to $1.5bn (£1.1bn) a year, forcing it to put up prices again on top of a 1% year-on-year rise in the first three months of 2025. Prices of the group’s beauty products, which include Olay and Pantene, rose 3% in the quarter.
“We will have to pull every lever we have in our arsenal to mitigate the impact of tariffs,” its chief finance officer, Andre Schulten, said on Thursday.
He said pricing and cost cuts were the company’s main levers as changing its raw material sourcing from China would be difficult in the short term because of a lack of alternatives.
Despite the expected price rises, Procter & Gamble now forecasts no growth in its annual sales, having previously predicted an increase of between 2% and 4%, in what it called “a challenging and volatile consumer and geopolitical environment”.
Fernando Fernandez, the new boss of the Magnum, Dove and Domestos maker Unilever, said the company had “seen some commodity inflation returning” in recent months that could flow through to more price rises.
However, Unilever will be “very cautious” in its approach, Fernandez said, with increases the “last resort to which I go. Before that we will try to manage our cost base.” Unilever put up its prices by an average of 1.7% in the first quarter of 2025.
Fernandez said Unilever was seeing inflation on commodities such as dairy, cocoa and palm oil, and its beauty products may also face higher costs on imported packaging and some ingredients because of new tariffs imposed by the Trump administration.
Nestlé, which owns brands including KitKat confectionery and Felix cat food as well as Nescafé, said its prices had risen by just over 2% in the first three months of the year, including a 3.2% rise in Nespresso coffee pod prices amid cost inflation on coffee and cocoa.
These price rises helped lift total sales by 2.8% with strong growth in confectionery and coffee but slower sales of pet food.
It said the impact of tariffs on consumers, currencies and commodity prices was still unclear and the situation was “dynamic, with heightened risks and uncertainty”.
In a separate update, the soft drinks and snacks group PepsiCo said it was no longer expecting profit growth this year as new tariffs would drive up supply chain costs.
Ramon Laguarta, the company’s chair and chief executive, said: “As we look ahead, we expect more volatility and uncertainty, particularly related to global trade developments, which we expect will increase our supply chain costs. At the same time, consumer conditions in many markets remain subdued.”
Unilever said that despite the tricky market and “uncertain macroeconomic environment”, it was ploughing on with plans to separate its ice-cream business, which includes Magnum, Cornetto and Ben & Jerry’s.
Fernandez said the planned listing was the “better option” in the current environment and that there were no plans to sell Ben & Jerry’s separately despite reported interest from one of the brand’s founders amid tension over political issues.
It has been reported that Unilever has threatened to pull funding, amounting to about $5m (£3.75m), from the brand’s charitable foundation amid a legal row over alleged efforts to dismantle the brand’s independent board and end its progressive social activism on issues such as the war in Gaza.
Fernandez said Unilever had written to Ben & Jerry’s to ask for further information to “ensure funds are used properly” and were not being directed to “areas and executions” that were not part of their agreement.
He added that Ben & Jerry’s was “not for sale” as a separate entity and the ice-cream listing would go ahead in September.
