Paul Polman, chief of consumer goods group, backs reform but says European Union is good for business and UK economy
The UK would be better off staying inside the European Union “than kicking against the table” and voting to leave, the boss of one of the world’s largest consumer goods companies has said.
Paul Polman, the Dutch chief executive of the consumer multinational Unilever, said the company could review its UK investment if Britain left the EU.
“We will always look at things,” he said, when asked whether Unilever could reduce its presence in the UK. Unilever employs 7,000 people in the UK, which is a net exporter to the EU for its business.
“We are a positive contributor in that sense to the UK economy and we [would] have to look at that then for the UK v Europe, just like we do in any other country that is not in the EU.”
Being in the EU was good for business and for the UK economy, he said, although Europe needed to raise its game as a place to do business. “We are very concerned about the overall competitiveness of Europe vis-a-vis the rest of the world.”
Polman said he supported EU reform but added that the debate was simplistic. “We tend to forget all the good things that the common market has brought, also to Britain, and take that for granted and then only focus on the things that need to be changed and portraying that as bad.”
He was speaking as Unilever surprised the City with better than expected results for 2013. The company reported net profit of €5.3bn (£4.4bn) for 2013, up 9% on last year, sending its share price up 2.5%.
The maker of PG Tips tea, Dove shampoo and Magnum ice-creams, reported global sales growth of 4.3%. Sales in emerging markets, where Unilever makes 60% of its turnover, grew at 8.7% – a slower rate than in previous years. But Unilever faces bigger problems in Europe, where sales are still falling in several countries, and recovery looks distant.
“We are still well below the lines of 2009 in many of the countries and we still have a lot of deleveraging to do,” said Polman. “In an environment where markets don’t grow, where costs go up, you are not going to hire people.”
He also admitted that Unilever had been slow to react to changing market conditions in rich countries, where consumers are abandoning mid-market retailers for discount items and premium brands. Unilever was now focusing across the “price piano”, he said, with a broader range of products, from Sara Lee frozen desserts at one end, to premium products, such as upmarket teas and Toni & Guy haircare.
Dismissing criticisms that Unilever had too many products, Polman said the company now had a “very focused portfolio”, although future sell-offs could not be ruled out. Some categories, notably margarines, are still struggling. Consumers’ appetite for spreads, such as Flora and I Can’t Believe It’s Not Butter, continues to decline, as people reassess the health warnings on butter.
Skin lighteners ‘like sun lotion’
Skin-whitening creams are no different to tanning products, Unilever’s chief executive, Paul Polman, said, in defence of his firm’s controversial “fairness products” that have been at centre of racism rows in India and Thailand.
Unilever’s Fair & Lovely skin cream has come under more scrutiny in India since the Bollywood star Nandita Das launched her campaign Dark is Beautiful last year. Unilever’s Thai business is behind Citra Pearly White UV body lotion, which stoked a heated debate over racism when its advertising appeared to link skin colour to intelligence.
Polman said the products should be seen in a similar way to tanning products in Europe. “We all like to walk around with tanning products and that’s OK. In that part of the world they have fairness products, which are also skincare products and there is a need for that and consumers want that,” he said.
“Products like Fair & Lovely are very important products in Indian society that people appreciate. [They] not only provide the fairness but also take care of the skin There are a lot more benefits in climates that are quite harsh.”
He added: “It’s the same as deodorants. We don’t like people to walk around with body smell, but the whole world did before deodorants were invented. That is what you have. You give people choices.”
He admitted however that some ads had “not passed local standards”. Unilever Thailand was forced to withdraw its Citra advert for Citra Pearly White last year, after widespread criticism that it appeared to link white skin to intelligence.
• This article was amended on Wednesday 22 January. Unilever employs 7,000 people in the UK, not 6,000 as first stated
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