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Is the Unilever row with Tesco a sign of things to come?

Unilever's bust-up with Tesco is quite remarkable.

Negotiations between supermarkets and suppliers about price go on all the time, disagreements are inevitable but they're usually played out in private.

This morning Tesco stopped taking deliveries of the 40-odd brands Unilever sell in the UK. Marmite, Persil, Flora, Helmanns, Colman's, and Pot Noodle are no longer available on Tesco's website to protect stock in stores.

Unilever wanted to hike its prices by 10%, Tesco (whose boss Dave Lewis worked at Unilever for 17 years) is refusing to pay them.

Unilever is one of Tesco's biggest suppliers. Unless common ground is found in the next few days the shelves will start to look a little emptier.

Unilever's chief executive, Paul Polman, issued warnings over Brexit. Credit: Andrew Cowie / PA Archive

Unilever's chief executive, Paul Polman, warned in June that there would be "serious consequences" if Britain voted to leave the EU.

After the vote, he clearly signalled that the devaluation of sterling would force up prices for British shoppers but a demand to increase prices by 10% has met ferocious resistance.

Tesco has stopped buying Unilever products; ASDA, Morrisons and Sainsburys are threatening to do the same. Common sense suggests it's in everyone's interest to compromise.

Unilever is unlikely to get the price rise it wants but the direction of travel is clear.

Around half of everything the big British supermarkets sell is imported so the fall in the pound creates an obvious headache.

The fall in the pound since the EU referendum is likely to drive up prices. Credit: Joe Giddens / PA Wire

Suppliers have seen their costs jump and want to pass on as much as they can.

Supermarkets want to keep prices as low as possible and protect their profits. That's a tension that will works in consumers' favour bu,t make no mistake, some of the pain will be shared.

One supermarket boss told me recently that, if the pound remains at this level, he thought in-store prices would rise by up to 4% in the next year.

That would cause considerable discomfort.

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