×

UK's biggest retailer is running out of Ben & Jerry's — is Brexit to blame?

The stock levels at the largest U.K. grocer are missing a number of Unilever products, in a row over price rises blamed on Brexit and the falling value of sterling.

According to media reports in the U.K. some key Unilever products are already missing from the retailer's website including Marmite spread, Surf washing powder, Pot Noodles and Ben & Jerry's ice cream.

Unilever relies on imported ingredients, which has meant higher costs for the supplier on the back of the falling value of the British pound. According to the Wall Street Journal, Unilever asked Tesco to increase prices on several products to compensate for the losses, but the latter refused, sparking a standoff between the two.

Shares of Tesco were down 1.8 percent in morning trade Thursday and Unilever was down 2.3 percent.

Media reports have also suggested that Unilever made similar requests to other British grocery chains, including Asda, Morrison's and Sainsbury's. The supplier has reportedly asked for price rises of 10 percent on average on all its products. But, as Reuters reported, grocers are complaining against such price demands, arguing that some of the products are in fact produced in the U.K.

A Tesco spokesperson told CNBC: "We are currently experiencing availability issues on a number of Unilever products. We hope to have this issue resolved soon."

Unilever's argument of higher costs is based on the weakening of sterling. On Thursday morning, the pound was down 0.28 percent against the dollar at 1.2181.

The currency has been depreciating, reaching 31-year-lows, due to the uncertainty involving the upcoming Brexit negotiations. It managed, however, to make some gains on Wednesday, going up as much as 1.6 percent, after Prime Minister Theresa May agreed to give British lawmakers a say in the upcoming talks.

Unilever said it would not comment on the issue.

However, according to Reuters, Unilever Chief Financial Officer Graeme Pitkethly said, following the company's reported results, that discussions over price increases to offset increasing costs are a normal when doing business.