Reckitt Prospers While Unilever Faces Belgian Backlash

12 February 2009

SLOUGH, UK: Reckitt Benckiser, the consumer products company, is targeting income growth of at least 8% this year after net profits rose 12% to £1.14bn ($1.6bn; €1.1bn) in 2008. By contrast, fellow fmcg giant Unilever has seen its products withdrawn from a Belgian supermarket chain because of a dispute over high prices.

Reckitt's net revenues rose by 13% to £6.56bn last year, with operating profit margins rising to 23.4% year-on-year, boosted by the company's purchase of drugs group Adams.

Bart Becht, Reckitt's chief executive, estimated revenue growth of 4% for next year, and was optimistic about meeting this goal, saying "typically we have achieved our targets in the past."

Unilever also posted a profit increase of 28% in 2008, boosted by increased prices, but now Brussels-based retail group Delhaize is axing hundreds of the company's products in 775 Belgian stores.

According to Delhaize, Unilever is attempting to effectively force it to stock certain products, and has threatened to increase prices of other stock by an average of 30% if it does not comply.

Delhaize spokeswoman Lisbeth Rogiers said: "They want to impose their product assortment on us. That is unacceptable for our customers, and we always put our customers at the center of our decisions."

Data sourced from Financial Times/Wall Street Journal; additional content by WARC staff