Unilever may sell off €3bn PG Tips and Lipton teas
Unilever will conduct a review of its global tea business, including the PG Tips and Lipton brands, in an apparent strategy rethink by chief executive Alan Jope in the face of slowing group sales growth.
Mr Jope has previously said the company was invested in turning around the tea business over the longer term, but the change of plan could soothe concerns of investors who have lamented a lack of urgency in transforming Unilever’s struggling food and refreshment business.
“We will look at all options for the (tea) business,” Unilever finance chief Graeme Pitkethly said after the company’s results showed group sales grew at their slowest in a decade over the past quarter.
Mr Pitkethly said tea is a good performer in emerging markets and in the premium category but all regions and all parts of the business would be considered for review. Options include a partial or full sale, he said without giving a timeframe.
The company said the review was triggered by the sales slowdown of traditional black tea in developed markets as consumers shift towards herbal tea. Black tea is the dominant part of Unilever’s tea business, Mr Pitkethly said, selling in 60 countries and generating €3bn in annual sales.
The food and refreshment business - which makes Lipton teas and Hellmann’s mayonnaise among other products and contributes 40% to group sales - has been hit particularly hard in North America and Europe as consumers reach for healthier options.
