Unilever

Unilever plc
Unilever N.V.
Dual-listed
Public limited company
Naamloze vennootschap
Traded as LSE: ULVR
Euronext: UNA
NYSE: UN, UL
FTSE 100 Component
TTSE: UCL
Industry Consumer goods
Predecessor
Founded 2 September 1929 (1929-09-02) (by merger)[1]
Founders
Headquarters Unilever House, London, UK
Rotterdam, Netherlands
Area served
 Worldwide
Key people
Products Foods, beverages, cleaning agents and personal care products
Revenue Increase US$62.622 billion (2017)[2]
Increase US$10.325 billion (2017)[2]
Increase US$7.561 billion (2017)[2]
Total assets Increase US$70.278 billion (2017)[2]
Total equity Decrease US$16.771 billion (2017)[2]
Owners Legal & General
Aviva
M&G Investments
NFU Mutual
Lindsell Train[3]
Number of employees
 169,000 (2017)[4]
Website www.unilever.com

Unilever is a British-Dutch transnational consumer goods company co-headquartered in London, United Kingdom and Rotterdam, Netherlands. Its products include food and beverages (about 40 percent of its revenue), cleaning agents and personal care products. It is the world's largest consumer goods company measured by 2012 revenue.[5] It is Europe’s seventh most valuable company.[6] Unilever is one of the oldest multinational companies; its products are available in around 190 countries.[7]

Unilever owns over 400 brands, with a turnover in 2016 of 52.7 billion euros, and in 2017 of 53.7 billion euros [8]and thirteen brands with sales of over one billion euros:[9] Axe/Lynx, Dove, Omo, Heartbrand ice creams, Hellmann's, Knorr, Lipton, Lux, Magnum, Rexona/Degree, Sunsilk and Surf.[7] It is a dual-listed company consisting of Unilever plc, based in London, and Unilever N.V., based in Rotterdam. The two companies operate as a single business, with a common board of directors. Unilever is organised into four main divisions – Foods, Refreshment (beverages and ice cream), Home Care, and Personal Care. It has research and development facilities in the United Kingdom (two), the Netherlands, China, India and the United States.[10]

Unilever was founded in September 2nd, 1929, by the merger of the Dutch margarine producer Margarine Unie and the British soapmaker Lever Brothers. During the second half of the 20th century the company increasingly diversified from being a maker of products made of oils and fats, and expanded its operations worldwide. It has made numerous corporate acquisitions, including Lipton (1971), Brooke Bond (1984), Chesebrough-Ponds (1987), Best Foods (2000), Ben & Jerry's (2000), Alberto-Culver (2010), Dollar Shave Club (2016) and Pukka Herbs (2017). Unilever divested its speciality chemicals businesses to ICI in 1997. In 2015, under leadership of Paul Polman, the company started gradually shifted its focus towards health and beauty brands and away from food brands showing slow growth.[11]

Unilever plc has a primary listing on the London Stock Exchange and is a constituent of the FTSE 100 Index. Unilever N.V. has a primary listing on Euronext Amsterdam and is a constituent of the AEX index. The company is also a lux of the Euro Stoxx 50 stock market index.[12]

History

1870s–1910s

In 1872, Antoon Jurgens, founded the first margarine factory in the world in Oss, Netherlands. Then, in 1888, Samuel van den Bergh, also from Oss, opened his margarine factory in Kleve. These two companies merged in 1927 to form Margarine Unie.[13]

Lever House in Port Sunlight, United Kingdom, the former headquarters of Lever Brothers

The initial harvesting of palm oil was from British West Africa, from where news reports seen back in England showed the workers abroad in favourable conditions.[14] In 1911, the company received a concession for 750,000 hectares of forest in Belgian Congo, mostly south of Bandundu, where a system of forced labour operated.[15]

1920s

In 1925, Lever Brothers acquired Mac Fisheries, owner of T. Wall & Sons.[16] In September 1929, Unilever was formed by a merger of the operations of Dutch Margarine Unie and British soapmaker Lever Brothers, with the name of the resulting company a portmanteau of the name of both companies.[17]

1930s–1940s

In the 1930s, business grew and new ventures were launched in Africa and Latin America. The Nazi occupation of Europe during the Second World War meant that Unilever was unable to reinvest its capital into Europe, so it instead acquired new businesses in the UK and the US.[18] In 1943, it acquired T. J. Lipton, a majority stake in Frosted Foods (owner of the Birds Eye brand) and Batchelors Peas, one of the largest vegetables canners in the UK.[16][19] In 1944, Pepsodent was acquired.[19]

After 1945, Unilever's once successful US businesses (Lever Brothers and T.J. Lipton) began to decline.[1] As a result, Unilever began to operate a "hands off" policy towards the subsidiaries, and left American management to its own devices.[1]

1950s–1960s

Sunsilk was first launched in the UK in 1954.[20] Dove was first launched in the US in 1957.[20] Unilever took full ownership of Frosted Foods in 1957, which it renamed Birds Eye.[21] The US-based Good Humor ice cream business was acquired in 1961.[22]

By the mid-1960s, laundry soap and edible fats still contributed around half of Unilever's corporate profits.[16] However, a stagnant market for yellow fats and increasing competition in detergents and soaps from Procter & Gamble forced Unilever to diversify.[16] In 1971, Unilever acquired the British-based Lipton Ltd from Allied Suppliers.[16] In 1978, National Starch was acquired for $487 million, marking the largest ever foreign-acquisition of a US company at that point.[23]

1970s–1980s

By the end of the 1970s, through acquisitions, Unilever had gained 30 per cent of the Western European ice cream market.[16] In 1982, Unilever management decided to reposition itself from an unwieldy conglomerate to a more concentrated FMCG company.[24]

In 1984, Unilever acquired Brooke Bond (maker of PG Tips tea) for £390 million in the company's first successful hostile takeover.[16] In 1986 Unilever strengthened its position in the world skin care market by acquiring Chesebrough-Ponds (merged from Chesebrough Manufacturing and Pond's Creams), the maker of Ragú, Pond's, Aqua-Net, Cutex, and Vaseline in another hostile takeover.[24] In 1989, Unilever bought Calvin Klein Cosmetics, Fabergé, and Elizabeth Arden, but the latter was later sold (in 2000) to FFI Fragrances.[25]

1990s

In 1993, Unilever acquired Breyers from Kraft, which made the company the largest ice cream manufacturer in the United States.[26]

In 1996, Unilever merged Elida Gibbs and Lever Brothers in its UK operations.[27] It also purchased Helene Curtis, significantly expanding its presence in the United States shampoo and deodorant market.[25] The purchase brought Unilever the Suave and Finesse hair-care product brands and Degree deodorant brand.[25]

In 1997, Unilever sold its speciality chemicals division, including National Starch & Chemical, Quest, Unichema and Crosfield to Imperial Chemical Industries for £4.9 billion.[28]

Unilever established a sustainable agriculture programme in 1998.[29]

2000s

Global employment at Unilever 2000–08
Black represents employment numbers in Europe, light grey represents the Americas and dark grey represents Asia and Africa.
Between 2000 and 2008 Unilever reduced global workforce numbers by 41%, from 295,000 to 174,000.
Notes: Europe figures for 2000–2003 are all Europe; from 2004 figures in black are Western Europe. For 2004–2008 figures for Asia and Africa include Eastern and Central Europe.
Source: Unilever Annual Reports 2004, 2008

In April 2000, Unilever bought both Ben & Jerry's and Slim Fast for £1.63 billion.[28] Later that year, the company acquired Best Foods for £13.4 billion.[28] The Bestfoods acquisition increased Unilever's scale in foods in America, and added brands such as Knorr and Hellmann's to its portfolio.[28] The transaction was the second largest cash acquisition in world business history.[28] In exchange for European regulatory approval of the deal, Unilever divested itself of such well-known brands as Oxo, Royco and Batchelors.[28] The same year, the company bought worldwide mustard and products firm Maille. Maille had three boutiques in Europe, all of which sell mustard from the pump in the traditional Maille fashion. Paris, Dijon, France and London, UK. The merge between Best Foods and Unilever was approved by the Israeli Anti trust agency.[30]

In 2001, Unilever split into two divisions: one for Foods and one for Home and Personal Care.[28] In the UK, it merged its Lever Brothers and Elida Faberge businesses as Lever Faberge in January 2001.[31]

In September 2002, the company sold its specialty oils and fats division, Loders Croklaan, for RM814 million (€218.5 million) to IOI Corporation, a Kuala Lumpur, Malaysia-based oil palm company. As part of the deal, the Loders Croklaan brand will be maintained.[32]

Also in 2002, Unilever sold the Mazola, Argo & Kingsfords, Karo, Golden Griddle, and Henri's brands, along with several Canadian brands, to ACH Food Companies, an American subsidiary of Associated British Foods.[33][34]

In 2004, Unilever sold its share in Rushdi food industry to the Bashir family which started to use the Baracke brand name.[35] As of 2014 Roshadi food industries was one of the three largest tahini producers in Israel and one of the largest producers of Tahini worldwide.[36]

In May 2007, Unilever became the first large-scale company to commit to sourcing all its tea in a sustainable manner,[37] employing the Rainforest Alliance, an international environmental NGO, to certify its tea estates in East Africa, as well as third-party suppliers in Africa and other parts of the world.[38] It declared its aim to have all Lipton Yellow Label and PG Tips tea bags sold in Western Europe certified by 2010, followed by all Lipton tea bags globally by 2015.[39]

In September 2009, Unilever agreed to acquire the personal care business of Sara Lee Corporation, including brands such as Radox, Badedas and Duschdas, strengthening its category leadership in skin cleansing and deodorants.[40] The Sara Lee acquisition was completed on 6 December 2010.[41]

2010–2014

In August 2010, Unilever signed an asset purchase agreement with the Norwegian dairy group TINE, to acquire the activities of Diplom-Is in Denmark.[42]

In September 2010, Unilever announced that it had entered into a definitive agreement to sell its consumer tomato products business in Brazil to Cargill.[43]

In September 2010, Unilever purchased Alberto-Culver, a maker of personal care and household products including Simple, VO5, Nexxus, TRESemmé, and Mrs. Dash, for US$3.7 billion.[44]

In September 2010, Unilever and EVGA announced that they had signed an agreement under which Unilever would acquire EVGA's ice cream brands (amongst others, Scandal, Variete and Karabola) and distribution network in Greece, for an undisclosed amount.[45]

In February 2011, Unilever announced that it will switch to 100% cage-free eggs for all products it produces worldwide.[46]

In March 2011, it was announced that Unilever had entered into a binding agreement to sell the Sanex brand to Colgate-Palmolive for €672 million, and that Unilever would acquire Colgate-Palmolive's laundry detergent brands in Colombia (Fab, Lavomatic and Vel) for US$215 million.[47]

In April 2011, Unilever was fined €104 million by the European Commission for establishing a price-fixing cartel in Europe along with P&G, who was fined €211.2 million, and Henkel (not fined). Though the fine was set higher at first, it was discounted by 10% after Unilever and P&G admitted running the cartel. As the provider of the tip-off leading to investigations, Henkel was not fined.[48]

In August 2011, it was announced that Unilever had agreed to sell the Alberto VO5 brand in the United States and Puerto Rico, and the Rave brand globally, to Brynwood Partners VI L.P.[49]

In October 2011, it was announced that Unilever had agreed to acquire 82% of the Russia-based beauty company Kalina.[50]

In December 2012, it was announced that Unilever would phase out the use of microplastics in the form of microbeads in their personal care products by 2015.[51]

In January 2013, Unilever agreed to sell the Skippy peanut butter brand, together with related manufacturing facilities in Little Rock, Arkansas, United States and Weifang, Shandong, China, to Hormel Foods for approximately $700 million (£433 million, or approximately €540 million) in cash.[52][53]

In July 2013, Unilever increased its stake in its Indian unit, Hindustan Unilever, to 67% for around €2.45 billion.[54]

In August 2013, Unilever announced that it had signed an agreement for the sale of its Wish-Bone and Western dressings brands to Pinnacle Foods Inc. for a total cash consideration of approximately US$580 million, subject to regulatory approval.[55] On 6 September 2013, Unilever entered into a definitive agreement to acquire the premium Australian tea brand T2.[56]

In February 2014, Unilever signed a definitive agreement for the sale of its meat snacks business, including Peperami (UK/Ireland) and BIFI (continental Europe) to Jack Link's, for an undisclosed amount.[57]

In March 2014, Unilever agreed to acquire a majority stake in the China-based water purification company Qinyuan, which makes water purifiers, drinking water equipment and water treatment membranes, for an undisclosed price.[58][59]

On 22 May 2014, the company announced it had sold its North America pasta sauces business including the Ragú and Bertolli brands to Japanese company Mizkan in a deal worth $2.15 billion.[60]

On 10 July 2014, Unilever announced that it had sold its Slim-Fast brand to Kainos Capital, yet retained a minority stake in the business.[61]

On 2 December 2014, Unilever announced that it had acquired Talenti Gelato & Sorbetto. Minneapolis-based Talenti, which was founded in 2003, had grown into the best-selling packaged gelato in the United States.[62]

On 22 December 2014, Unilever announced the purchase of the Camay brand globally and the Zest brand outside of North America and the Caribbean from Procter & Gamble.[63]

Hampton Creek lawsuit

In November 2014, Unilever filed a lawsuit against rival Hampton Creek.[64] In the suit,[65] Unilever revealed that Hampton Creek is "seizing market share" and the losses are causing Unilever "irreparable harm." Unilever used standard of identity regulations in claiming that Hampton Creek's Just Mayo products are falsely advertised because they don't contain eggs.[66]

The Washington Post[67] headline on the suit read "Big Food's Weird War Over The Meaning of Mayonnaise." The Los Angeles Times[68] began its story with "Big Tobacco, Big Oil, now Big Mayo?" A Wall Street Journal writer described that with "Giant corporation generates huge quantities of free advertising and brand equity for tiny rival by suing it."[69]

In December 2014, Unilever dropped the claim.[70]

2015

In March 2015, Unilever confirmed it had reached an agreement to acquire REN Skincare, a British niche skincare brand.[71] This was followed in May 2015 by the acquisition of Kate Somerville Skincare LLC.[72]

In July 2015, the company separated its food spreads business,[73] including its Flora and I Can't Believe It's Not Butter! brands, into a standalone entity named Unilever Baking, Cooking and Spreading.[74] The separation was first announced in December 2014 and was made in response to declining worldwide sales in that product category.[75]

In October 2015, Unilever agreed to acquire the Italian premium ice cream maker GROM for an undisclosed amount.[76]

2016–present

In July 2016, Unilever bought the US start-up Dollar Shave Club for a reported $1b (£764m) in order to compete in the male grooming market.[77] On 16 August 2016, Unilever acquired Blueair, a supplier of mobile indoor air purification technologies.[78] In September 2016, Unilever acquired Seventh Generation Inc. for $700 million.[79] On 16 December 2016, Unilever acquired Living Proof Inc, a hair care products business.[80]

On 17 February 2017, significantly smaller Kraft Heinz made a $143 billion bid for Unilever.[81][82] The deal was declined by Unilever.[83] On 20 April 2017, Unilever acquired Sir Kensington’s, a New York-based condiment maker.[84] On 15 May 2017, the company acquired the personal care and home care brands of Quala, a Latin American consumer goods company.[85] In June, the company acquired Hourglass, a colour cosmetics brand.[86] In July, the company then announced that it had acquired the organic herbal tea business, Pukka Herbs.[87]

In September 2017 Unilever acquired Weis, an Australian ice cream business.[88] On 7 September it acquired Pukka Herbs, Bristol-based organic herbal tea and supplement company.[89] Later that month Unilever acquired Remgro’s interest in Unilever South Africa in exchange for the Unilever South Africa spreads business plus cash consideration.[90] Even later that month, Unilever agreed to acquire Carver Korea, a skincare business in North Asia.[91]

In October, Unilever acquired Brazilian natural and organic food business Mãe Terra.[92] In November 2017, Unilever announced an agreement to acquire the Tazo speciality tea brand from Starbucks.[93] Later in November 2017, the company acquired Sundial Brands, a skincare company.[94] In December 2017, Unilever acquired Schmidt's Naturals, a US natural deodorant and soap company.[95]

In March 2018, the company announced that its headquarters will be moved completely to Rotterdam, ending its dual Anglo-Dutch structure.[96] A shareholder vote will take place in October 2018 to decide for the listing of a new Unilever Dutch entity, which could potentially see Unilever dropping out of the FTSE 100 Index.[97] This was cancelled on 5 October 2018.

Upfield

In December 2017, Unilever sold its margarine and spreads division to investment firm KKR for €6.8bn.[98][99] The sale was completed in July 2018, and the new company was named Upfield.[100] Upfield's notable brands include Flora, Stork, I Can't Believe It's Not Butter, Rama, Country Crock, Becel, and Blue Band.[101]

Operations

Unilever is organised into four main divisions: Personal Care (production and sale of skin care and hair care products, deodorants and oral care products); Foods (production and sale of soups, bouillons, sauces, snacks, mayonnaise, salad dressings, margarines and spreads); Refreshment (production and sale of ice cream, tea-based beverages, weight-management products and nutritionally enhanced staples sold in developing markets); and Home Care (production and sale of home care products including powders, liquids and capsules, soap bars and other cleaning products).[102] In the financial year ended 31 December 2013, Unilever had a total turnover of €49.797 billion of which 36% was from Personal Care, 27% from Foods, 19% from Refreshment and 18% from Home Care.[102] Unilever invested a total of €1.04 billion in research and development in 2013.[102]

Unilever is one of the largest media buyers in the world, and invested around €6 billion (US$8 billion) in advertising and promotion in 2010.[103][104]

Unilever's largest international competitors are Nestlé and Procter & Gamble.[105] It also faces competition in local markets or specific product ranges from numerous companies, including Beiersdorf, ConAgra, Danone, Henkel, Mars, PepsiCo, Reckitt Benckiser and S. C. Johnson & Son. Unilever was fined by Autorité de la concurrence in France in 2016 for price-fixing on personal hygiene products.[106][107]

Products

Unilever's products include foods, beverages, cleaning agents and personal care products. The company owns more than 400 brands, which are organised into four main categories - Foods, Refreshments, Home Care, and Beauty & Personal Care. Unilever's current largest-selling brands include: Axe/Lynx, Ben & Jerry's, Dove, Heartbrand, Hellmann's/Best Foods, Knorr, Lipton, Lux/Radox, Omo/Surf, Rexona/Sure, Sunsilk, TRESemmé, Magnum, Vaseline and VO5. Unilever's Standard Industrial Classification codes are 10890: Manufacture of other food products n.e.c., 10410: Manufacture of oils and fats, and 10420: Manufacture of margarine and similar edible fats.[108]

Corporate affairs

Unilever N.V. head office building in Rotterdam

Unilever has two holding companies: Unilever N.V., which has its registered and head office in Rotterdam, Netherlands, and Unilever plc, which has its registered office at Port Sunlight in Merseyside, United Kingdom and its head office at Unilever House in London, United Kingdom.[109] Unilever plc and Unilever N.V. and their subsidiary companies operate as nearly as practicable as a single economic entity, whilst remaining separate legal entities with different shareholders and separate stock exchange listings.[109]

There are a series of legal agreements between the parent companies, together with special provisions in their respective Articles of Association, which are known as the Foundation Agreements.[109] A key requirement of the agreements is that the same people be on the Boards of the two parent companies. An Equalisation Agreement regulates the mutual rights of shareholders in Unilever plc and Unilever N.V. with the objective of ensuring that, in principle, it does not make any financial difference to hold shares in Unilever plc rather than Unilever N.V. (and vice versa).[109]

Future

On 15 March 2018, Unilever announced its intention to simplify this structure by centralising the duality of legal entities and keeping just one headquarters in Rotterdam, abandoning the London head office. Business groups and staff are unaffected, as is the dual listing.[110] On 5 October 2018 the group announced it would cancel the restructuring due to concern that the UK shareholders would lose value if the company fell out of the London FTSE100.[111]

Senior management

Paul Polman was named Unilever's CEO in 2009. He was previously chief financial officer for Nestle and also worked for Proctor and Gamble.[112][113] Prior to Polman, Patrick Cescau served as CEO.[112] Unilever's highest executive body is the Unilever Leadership Executive. Members of the Unilever Leadership Executive have included chief financial officer Graeme Pitkethly,[114] and chief operating officer Harish Manwani.[115]

In 1930, the logo of Unilever was in a sans-serif typeface and all-caps. The current Unilever corporate logo was introduced in 2004 and was designed by Wolff Olins, a brand consultancy agency. The 'U' shape is now made up of 25 distinct symbols, each icon representing one of the company's sub-brands or its corporate values.[116] The brand identity was developed around the idea of "adding vitality to life."[117]

Advertising

Dove

Dove describes itself as being dedicated to "help ... women develop a positive relationship with the way they look – helping them raise their self-esteem and realize their full potential". (Dove, "Our Vision")[118] Dove employs the use of advertising for their own products to display their messages of positive self-esteem. In September 2004 Dove created a Real Beauty campaign, focusing predominately on women of all shapes and colour. Later in 2007 this campaign furthered itself to include women of all ages. This campaign consisted mostly of advertisements, shown on television and popularised by the internet. Dove fell under scrutiny from the general public as they felt the Dove advertisements described the opinion that cellulite was still unsightly, and that women's ageing process was something to be ashamed of.[119]

Lynx/Axe

Axe, known as Lynx in the United Kingdom, the Republic of Ireland, Australia and New Zealand, is a toiletries brand marketed towards young men between the age of 16 and 24.[120] Its marketing is a "tongue-in-cheek take on the 'mating game'", suggesting that women are instantly drawn to men using the products.[121][122] Unlike Dove's long running beauty campaign Lynx advertising often creates mini series of advertisements based around a singular product rather than communicating an overarching idea. This campaign thrives on controversy. Using images which the company knows will receive complaints about garners the brand more free publicity and notoriety. A wide variety of these adverts have been banned in countries around the world. In 2012 Lynx's 'Clean Balls' advert was banned. This advert designed for television shows an attractive young woman cleaning various sport balls. In 2011 in the UK Lynx's shower gel campaign was banned. The poster for Lynx shower gel showed a woman in an undone bikini under a shower at a beach, with the headline: "The cleaner you are the dirtier you get."[121][123]

Both advertising campaigns make stark comparisons between how women and their sexuality are portrayed in advertising and sales efficiency. Lynx commonly portrays women as hypersexual, flawless and stereotypically attractive who are aroused by men, of all ages and stature, for their use of the Lynx product. Their target audience is single men between the ages of 16-24.[120]

Environmental record

Unilever has declared the goal of decoupling its environmental impact from its growth, by: halving the environmental footprint of its products over the next 10 years; helping 1 billion people improve their health and well-being; and sourcing all of its agricultural raw materials sustainably.[124]

Palm oil

Unilever has been criticised by Greenpeace for causing deforestation,[125] Unilever was targeted in 2008 by Greenpeace UK,[126] which criticised the company for buying palm oil from suppliers that are damaging Indonesia's rainforests.[127] By 2008, Indonesia was losing 2% of its remaining rainforest each year, having the fastest deforestation rate of any country. The United Nations Environmental Programme stated that palm oil plantations are the leading cause of deforestation in Indonesia.[127]

Furthermore, Indonesia was the fourteenth[128] largest emitter of greenhouse gases largely due to the destruction of rainforests for the palm oil industry, which contributed to 4% of global green house gas emissions.[129] According to Greenpeace, palm oil expansion was taking place with little oversight from central or local government as procedures for environmental impact assessment, land-use planning and ensuring a proper process for development of concessions were neglected.[129] Plantations that were off-limits, by law, for palm oil plantations were being established as well as the illegal use of fire to clear forest areas was commonplace.[129]

Unilever, as a founding member of the Roundtable on Sustainable Palm Oil (RSPO), responded by publicising its plan to obtain all of its palm oil from sources that are certified as sustainable by 2015.[130] It claims to have met this goal in 2012 and is encouraging the rest of the industry to become 100% sustainable by 2020.[131]

In Côte d'Ivoire (Ivory Coast), one of Unilever's palm oil suppliers was accused of clearing forest for plantations, an activity that threatened a primate species, Miss Waldron's red colobus. Unilever intervened to halt the clearances pending the results of an environmental assessment.[132]

According to Amnesty International in 2016 Unilever palm oil provider Wilmar International profited from 8 to 14 year old child labor and forced labor. Some workers were extorted, threatened or not paid for work. Some workers suffered severe injuries from banned chemicals. In 2016 Singapore-based Wilmar International was the world’s biggest palm oil grower.[133]

Paper use

For years, Unilever purchased paper for its packaging from Asia Pulp & Paper, the third largest paper producer in the world, which was labelled as a "forest criminal" for destroying "precious habitat" in Indonesia's rainforest.[134] In 2011, when Unilever cancelled its contract with Asia Pulp & Paper, Greenpeace Executive Director Phil Radford commended the company for efforts made towards forest protection, for "taking rainforest conservation seriously."[135]

Rainforest Alliance

Unilever certifies its tea products by the Rainforest Alliance scheme. The company has stated that at least 50% of the tea in its products originates from certified farms, compared to the Alliance's 30% minimum entry point. Unilever decided on the scheme over Fairtrade, because according to the company's analysis, Fairtrade might "lack the scale and the organizational flexibility to certify industrial tea estates".[136]

Criticism

The Rainforest Alliance certification scheme has been criticised for not offering producers minimum or guaranteed price,[137] therefore leaving them vulnerable to market price variations. The alternative certificate, Fairtrade, has however received similar criticism as well. The Rainforest Alliance certification has furthermore been criticised for allowing the use of the seal on products that contain only a minimum of 30% of certified content, which according to some endangers the integrity of the certification.[138]

Mercury Contamination

A mercury thermometer factory operated by the Indian subsidiary of Unilever in the South Indian hilltown of Kodaikanal was shut down by state regulators in 2001 after the company was caught for dumping toxic mercury wastes in a densely populated part of town. By the company’s own admissions, more than 2 tonnes of mercury have been discharged into Kodaikanal’s environment. A 2011 Government of India study on workers’ health concluded that many workers suffered from illnesses caused by workplace exposure to mercury. The scandal opened up a series of issues in India such as corporate liability, corporate accountability and corporate negligence.

The mercury contamination in Kodaikanal originated at a thermometer factory that was owned by Hindustan Unilever. Unilever acquired the thermometer factory from cosmetics maker Pond's India Ltd. Pond's moved the factory from the United States to India in 1982 after the plant owned there by its parent, Chesebrough-Pond's, had to be dismantled following increased awareness in developed countries of polluting industries. In 1987, Pond's India and the thermometer factory went to Hindustan Unilever when it acquired Cheseborough-Pond's globally.

The factory imported mercury from the United States, and exported finished thermometers to markets in the United States and Europe. Around 2001, a number of workers at the factory began complaining of kidney and related ailments. Public interest groups such as Tamil Nadu Alliance Against Mercury (TNAAC) alleged that the Company had been disposing mercury waste without following proper protocols. In early 2001, public interest groups unearthed a pile of broken glass thermometers with remains of Mercury from an interior of part of the shola forest, which they suspected could have come from the company. In March 2001, a public protest led by local workers' union and international environmental organisation Greenpeace forced the company to shut down the factory. Soon the company admitted that it did dispose of mercury contaminated waste. The company said in its 2002 annual report and its latest Sustainability Report that it did not dump glass waste contaminated with mercury on the land behind its factory, but only a quantity of 5.3 metric tonnes of glass containing 0.15% residual mercury had been sold to a scrap recycler located about three kilometers from the factory, in breach of the company procedures. Quoting a report prepared by an international environmental consultant, Unilever said there was no health effect on the workers of the factory or any impact on the environment.

However, in March 2016 Unilever reached an out of court settlement (for an undisclosed amount) with 591 ex-workers of the unit who had sued the company for knowingly exposing them to the toxic element. This was subsequent to the launch of a music video Kodaikanal Won’t, which received over 3 million hits and a global petition to the Unilever CEO Paul Polman signed by over 150,000 people in over 100 countries.

Unilever simultaneously announced its plan to remediate the mercury contaminated soils inside the factory premises. A 2002 report by Unilever's consultant, URS Dames & Moore found elevated concentrations of mercury (0.031mg/L or 31 ug/L and 0.085 mg/L or 85 ug/L) in two surface water samples that were collected on site following a heavy storm. The samples mentioned in the report were 40 and 110 times higher than the levels recommended by US Environmental Protection Agency for freshwater, and between 3100 times and 8500 times higher than USEPA recommendation for water quality if humans consume fish from the river segment in question. Furthermore, a 2002 study by a Department of Atomic Energy laboratory of the Government of India found that mercury levels in air near the factory were above nominal levels by between 132 and 660 times.

The company initiated a trial clean up of the soils between September and November 2017 during which it attempted to remediate 87 tons of soils. The remediation proposal has challenged by the local communities and activists for being in violation of international best standards.

July - September 2016 salmonella affair

Salmonella affair in cereals in Israel

In July 2016, rumours about salmonella contamination in cereals spread among Israeli consumers.[139] Initially, Unilever did not provide public information about the subject and queries on the matter were initially rebuffed by the company as a non-story and nonsense. On the night of 26 July 2016, Unilever had stopped transferring cornflakes to retailer chains.[140] On 28 July, Yediot Ahronot reported tens of thousands of boxes of breakfast cereal had been destroyed.[141] By 28 July, despite the company's assurances that nothing contaminated was released for consumption, many customers stopped buying Unilever products and started to throw away all cornflakes made by Unilever.[142] The company withheld the information about what were the affected production dates.[143]

On 2 August 2016, Globes reported that the company has published more information about Telma cereals handled on the packaging line in which the contamination was discovered and that a Telma announcement had been made: "We again stress that all Telma products in the stores and in your homes are safe to eat. According to our company's strict procedures, every production batch is checked and put on hold. These products are not marketed until test results for this production series are returned, confirming that all is well. If any flaw is discovered, the batch is not marketed to stores, as was the case."[144] In the following days the Health Minister, Yakov Litzman, threatened to pull Unilever's licence in Israel. He accused Unilever of lying to his ministry regarding salmonella-infected breakfast cereals.[145]

On 7 August, Globes reported that contamination may be sourced in pigeon faeces, the Health ministry said that there might be other sources for the contamination and pigeon faeces are not the only possible source. Globes also said that the production line is automatic ("without human hands") and the possibility that the source is human is a very slim chance.[146] On 8 August 2016, the Israeli Health minister suspended a manufacturing licence until Unilever carry out a number of corrections; the action came after an inspection of the Arad plant, stating "This was a series of negligent mistakes, and not an incident with malicious intent by the firm's management and quality control procedures."[147] An investigation led by Prof. Itamr Grutto and Eli Gordon concluded that the event was caused by negligence.[148]

On 23 September it was reported that the cereals produced between the 18th and 20th at the Arad plant had traces of salmonella.[149]

Class actions

A filed class action must first be approved by an Israeli court, after an approval the case will be held.

  • For a sum of 1.2 million NIS (~$329K USD) against Unilever for hiding the contamination and misleading the public[150]
  • For a sum of 76 million NIS (~$23m USD) against Unilever after a 15-year-old teen had been hospitalised for Salmonellosis after allegedly contracting it from Unilever products[151]

Salmonella affair in Tahina

On 31 August, Unilever stated that the Tehina products produced by RJM had been contaminated by salmonella.[152]

See also

References

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