Unilever shares drop after cost warning
Unilever shares dropped after the consumer goods maker warned of higher commodity costs this year as a result of a sharp rise in vegetable oil and chemical prices.
Annoucing its quarterly financial results, the maker of Ben & Jerry's ice cream and Dove soaps said on Thursday that it saw no other option than to make additional cuts to its own costs to compensate.
In the wake of the announcement, Unilever shares fell at the Amsterdam Stock Exhange, ending 3.4 cheaper at the end of the trading day. Europe's food groups are grappling with soaring costs for coffee, milk, grain and crude oil and are attempting to offset the impact by passing the costs on to consumers through higher prices and by making internal cost savings. Unilever now plans to make 1.3 billion euros of cost savings rather than the one billion euros it originally planned for this year after saving 1.4 billion euros in 2009 and 2010. Plans by Unilever and rival Procter & Gamble to raise prices in China ran into trouble this month as China's state planning agency told them to delay price rises as authorities there looks to keep inflation under control.
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