Unilever slammed for ‘mind-blowing’ results

By Dan Colombini

- Last updated on GMT

Unilever's decision to scrap its final salary pension scheme will cut the retirement income for staff by up to 40%, according to Unite
Unilever's decision to scrap its final salary pension scheme will cut the retirement income for staff by up to 40%, according to Unite

Related tags: Unilever, Pension

The row over changes to the pension scheme at Anglo-Dutch consumer giant Unilever is set to intensify next month after Unite the Union compared the firm’s latest set of “mind-blowing” profits with its pension policy.

Further strike dates are now expected to be arranged at a meeting in Liverpool on February 4, following news that Unilever has posted strong financial results for the year.

The results follow a first wave of industrial action, ending in Crumlin, South Wales on Saturday, which saw Unilever workers walking out at 12 sites across the UK. The walkouts were in response to the firm’s decision to scrap its final salary pension scheme, which will cut the retirement income for staff by up to 40%, said Unite.

Honour

National officer at Unite, Jenny Formby, slammed the Marmite maker’s decision to scrap the scheme. She added that the firm’s results proved that the money is there to honour the agreements with its workers.

She said: “These profits are mind-blowing, especially in a time of recession. This will make people stop and think twice about Unilever's attempt to claim that they cannot deliver the decent pension scheme our members have been saving for.

“Ceo Paul Polman takes home almost 300 times what the average Unilever worker earns. Unilever can address this grotesque disparity, starting with honouring its promises to the workers and their pensions.”

The firm saw net profit increase by 1% to £3.8bn (€4.6bn) for the period ending December 31. Turnover also increased by 5% to £38.5bn (€46.4bn) last year. Overall like-for-like revenue rose by 6.5%.

Despite Unite’s claims, the results missed analysts’ expectations and divided opinion among some experts.

Darren Shirley, an analyst at Shore Capital, said: “Unilever has reported 2011 results a little below expectations, primarily due to higher than anticipated restructuring cost​.”

Underlying margins

However, Graham Jones, an analyst at Panmure Gordon, said sales at the firm were ahead of expectations, with underlying margins in line with consensus.

Jones also said the 2012 outlook for Unilever was “unremarkable​” but that he expected “input headwinds​” to be less fierce than last year.

Unite has argued that, with the firm announcing strong growth for the year, it should now be in a position to listen to its workers’ demands.

Formby told FoodManufacture.co.uk that workers at the firm were as “defiant as ever​” following the conclusion of the strike and warned that unless discussions resume soon, Unilever will “have another strike on its hands​”.

She said: “Once again we are reminded that big business profiteering is simply out of control – and that the spoils are enjoyed by only a rare few at the top.

“Unilever can address this grotesque disparity, starting with honouring their promises to the workers and their pensions. Workers will be rightly furious if the comparatively small sums their pensions need now disappear into the pockets and wallets of Polman and his board.​”

Unilever defended its position, however, and said that unless the changes were made, it could blunt the firm’s long term competitiveness in the UK.

A spokesman told FoodManufacture.co.uk: “For us, this is about the future sustainability and competitiveness of our UK business. Unless we make the changes to the pension scheme that we are proposing, we believe Unilever's long term competitiveness in the UK could be affected.

“This could have the knock on effect of inhibiting the opportunities we would be able to offer young people in the future who might want to join our business​.”

In response, Formby told FoodManufacture.co.uk: “I have never heard such a ridiculous statement in my life”.

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