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Unilever halts Hellmann’s mayonnaise supplies to S.Africa as costs bite

FILE PHOTO: Hellmann's, a brand of Unilever, is seen on display in a store in Manhattan, New York City

By Richa Naidu

LONDON (Reuters) - Unilever has suspended sales of Hellmann's mayonnaise to South Africa, the company and major retailers confirmed on Wednesday, due to the high cost of importing the product from the United States.

"Due to high inflationary import costs, we will regretfully be discontinuing Hellmann’s in South Africa until further notice," Hellmann’s South Africa business tweeted on Tuesday.

A Unilever spokesperson told Reuters the pause was due to high raw material and shipping costs.

Unilever will continue to import Hellmann’s 1-kilo tubs of mayonnaise for its Unilever Food Solutions business, and said other brands had not been affected.

Hellmann’s is a very small brand in South Africa, which is why it’s not produced locally, the spokesperson said.

It is the latest example of how soaring costs for food producers and retailers have led to foods being removed from supermarket shelves.

Packaged goods makers such as Unilever have struggled with higher shipping and raw material costs for over a year while supermarkets have baulked at paying higher prices for popular brands, hoping to keep customers loyal at a time when they are struggling with soaring energy, rent and mortgage bills.

The country's biggest supermarket group Shoprite, owner of Checkers stores, told Reuters: "Unilever has advised the supermarket group that it has discontinued Hellmann's Mayonnaise."

At least one supermarket in South Africa had stopped selling the mayonnaise before Unilever discontinued it.

Retailer Woolworths said it had stopped selling the product in April last year because "Unilever was unable to consistently supply Woolworths with Hellmann’s Mayonnaise to meet our customer demand".

Last year, Kraft Heinz stopped supplying some products, such as tomato ketchup and baked beans, to UK supermarket operator Tesco as the supermarket chain resisted raising prices.

That dispute was resolved the following month.

(Reporting by Richa Naidu; editing by Josephine Mason and Jason Neely)