Radio frequency identification (RFID) tags could start to be introduced on everyday consumer goods in stores in five years time, according to Unilever.

Marco Waas, vice president of supply chain and technology at the manufacturing giant told delegates at the second annual RFID Return on Investment Forum in London last week that RFID will be used on cheaper items such as deodorant, but only when prices drop below three pence per tag.

'Item level tagging in the fast moving consumer goods industry is five to seven years away,' he said.

Most current RFID project are focusing on cutting costs and improving stock visibility in retailers' supply chains, but lower prices will make the tags increasingly profitable for manufacturers, says Waas.

'I'm absolutely sure that the technology for the whole supply chain will have huge benefits, but you can see most of the benefits at the retailers end,' he said.

'The balance of investment needs to be an area of discussion between manufactures and retailers, so that it's not all one sided.'

Confectionary manufacturer Nestle Rowntree also told the conference that it would not use item level tagging until prices dropped.

But manufacturing systems manager Paul Roberts says greater stock awareness through item-level RFID can boost sales for manufacturers by increasing product availability and improving in-store cross-promotional activity.

'We're looking for opportunities to sell more product and ensure on-shelf availability and item level tagging could help us do this,' he said.

IT suppliers are also increasing support for the technology.

Oracle's next version of its warehouse management software will include RFID and electronic product code capabilities to improve inventory control and cost savings in its customer's supply chains.

Microsoft says it is working with customers to link RFID with enterprise resource planning systems, with plans to update its Axapta and Navision applications in 2005, and its Retail Management System in 2006.

Last month, SAP also announced RFID capabilities for its warehouse management and supply chain packages to help automate and speed up functions such as packing, shipping and tracking of goods.