EU exit could see Unilever cut investment in UK

Paul Polman, chief of consumer goods group, backs reform but says European Union is good for business and UK economy

The UK would be better off staying inside the European Union "than kicking against the table" and voting to leave, the boss of one of the world's largest consumer goods companies has said.

Paul Polman, the Dutch chief executive of the consumer multinational Unilever, said the company could review its UK investment if Britain left the EU.

"We will always look at things," he said, when asked whether Unilever could reduce its presence in the UK. Unilever employs 7,000 people in the UK, which is a net exporter to the EU for its business.

"We are a positive contributor in that sense to the UK economy and we [would] have to look at that then for the UK v Europe, just like we do in any other country that is not in the EU."

Being in the EU was good for business and for the UK economy, he said, although Europe needed to raise its game as a place to do business. "We are very concerned about the overall competitiveness of Europe vis-a-vis the rest of the world."

Polman said he supported EU reform but added that the debate was simplistic. "We tend to forget all the good things that the common market has brought, also to Britain, and take that for granted and then only focus on the things that need to be changed and portraying that as bad."

He was speaking as Unilever surprised the City with better than expected results for 2013. The company reported net profit of €5.3bn (£4.4bn) for 2013, up 9% on last year, sending its share price up 2.5%.

The maker of PG Tips tea, Dove shampoo and Magnum ice-creams, reported global sales growth of 4.3%. Sales in emerging markets, where Unilever makes 60% of its turnover, grew at 8.7% - a slower rate than in previous years. But Unilever faces bigger problems in Europe, where sales are still falling in several countries, and recovery looks distant.

"We are still well below the lines of 2009 in many of the countries and we still have a lot of deleveraging to do," said Polman. "In an environment where markets don't grow, where costs go up, you are not going to hire people."

He also admitted that Unilever had been slow to react to changing market conditions in rich countries, where consumers are abandoning mid-market retailers for discount items and premium brands. Unilever was now focusing across the "price piano", he said, with a broader range of products, from Sara Lee frozen desserts at one end, to premium products, such as upmarket teas and Toni & Guy haircare.

Dismissing criticisms that Unilever had too many products, Polman said the company now had a "very focused portfolio", although future sell-offs could not be ruled out. Some categories, notably margarines, are still struggling. Consumers' appetite for spreads, such as Flora and I Can't Believe It's Not Butter, continues to decline, as people reassess the health warnings on butter.