A major investor in FMCG company Unilever has slammed the business for its “ludicrous” obsession with “woke” social causes at the expense of actual financial performance.
London-based funds manager Terry Smith (pictured below), founder of Fundsmith Equity Fund and a big investor in Unilever, said this week: “Unilever seems to be labouring under the weight of a management which is obsessed with publicly displaying sustainability credentials at the expense of focusing on the fundamentals of the business.”
Smith said he was compelled to speak publicly due to Unilever’s faltering share price.
In the past year alone the company’s share price has tanked nine per cent. In contrast, the London market, on average, rose 11 per cent.
“A company which feels it has to define the purpose of Hellmann’s mayonnaise has in our view clearly lost the plot,” Smith continued. “The Hellmann’s brand has existed since 1913 so we would guess that by now consumers have figured out its purpose (spoiler alert — salads and sandwiches).”
Unilever’s brands include such household names as Rexona, Ben & Jerry’s, Dove, Vaseline, OMO, Sunsilk. Lynx and Streets.
In 2021, the London-based company reportedly spent £6 billion ($A11.2 billion) on its advertising and marketing. MediaCom handles most of its global media.
In 2019 incoming Unilever CEO Alan Jope announced that “in the future, every Unilever brand will be a brand with purpose.”
Smith called out the company’s ice-cream brand Ben & Jerry’s decision to stop selling in the “Occupied Palestinian Territory” of the West Bank last year as “most obvious manifestation” of the problems he saw within the business.
In a statement at the time, Ben & Jerry’s said that continuing to sell ice cream there was “inconsistent with our values”, adding that “we also hear and recognise the concerns shared with us by our fans and trusted partners”.
Israeli Prime Minister Naftali Bennett said Ben & Jerry’s had “decided to brand itself as an anti-Israel ice cream”, while former PM Benjamin Netanyahu wrote on Twitter, “Now we Israelis know which ice cream NOT to buy.”
The move later backfired, with several state pension funds in the US including New York, New Jersey and Illinois selling their shares in Unilever for violating their policies against boycotts, divestment and sanctions activities related to Israel.
