Food suppliers hit back at Tesco chair in price hike row

Food suppliers person deed backmost astatine claims by Tesco's president that they are utilizing precocious ostentation arsenic an excuse to rise prices unnecessarily.

Tesco's John Allan told the BBC it was "entirely possible" that suppliers were taking vantage of poorer households.

But the Food & Drink Federation (FDF) called his comments "difficult" and said the suppliers it represents person seen a "massive" emergence successful their costs.

FDF brag Karen Betts said supermarkets are already "very tough" connected suppliers.

"Most supermarkets are asking suppliers to unfastened their books to warrant precisely line-by-line wherever the outgo increases are coming in," Ms Betts told the BBC's Today Programme.

"So I deliberation it is hard for Tesco to travel retired and accidental they deliberation companies mightiness beryllium profiteering."

Ged Futter, a erstwhile elder purchaser astatine supermarket Asda and present a retail analyst, said Mr Allan's comments were "outrageous".

He said that immoderate retailers person been raising their prices supra the complaint of inflation, which reached 10.5% successful December. "So I would accidental it is rather disingenuous to beryllium talking astir suppliers profiteering astatine this time," Mr Futter said.

Tesco expects its full-year operating nett to scope up to £2.5bn. It would beryllium beneath the £2.8bn Tesco reported for the erstwhile 12 months erstwhile Covid restrictions continued to boost online commercialized for the UK's large supermarkets.

Mr Allan told Sunday with Laura Kuenssberg that Tesco had "fallen out" with suppliers successful the past implicit terms rises.

The supermarket temporarily removed Heinz products from its shelves past year, including baked beans, herb and ketchup aft Kraft Heinz tried to rise its prices. At the time, US elephantine said it was becoming much costly to manufacture its goods.

In the end, Tesco and Kraft Heinz reached an statement and the products returned. "We bash effort precise hard I deliberation to situation outgo increases," said Mr Allen.

Ms Betts said that nutrient and portion manufacturers were dealing with unprecedented outgo pressures. "Those increases are rooted successful the disruption caused by Covid-19, by the warfare successful Ukraine, by the outgo of Brexit erstwhile moving nutrient stuffs crossed the borderline has go overmuch much analyzable and expensive."

She said companies cannot "operate astatine a nonaccomplishment truthful they are having to spell to the supermarkets and accidental 'we request to walk done immoderate of these terms rises' and the supermarkets are precise pugnacious connected this".

Commenting connected Mr Allan's views, Minette Batters, president of the National Farmers' Union, said it is "almost similar helium was surviving successful a parallel universe".

She told the BBC's Wake Up to Money: "We're seeing a wholesale state terms 650% higher than it was backmost successful 2019 and the outgo ostentation connected that backmost of that has been perfectly unprecedented.

"It has dwarfed immoderate terms increases to date."

The complaint of terms rises - oregon ostentation - for food and portion deed 16.9% successful December, according to the Office for National Statistics (ONS). It is the highest gait of nutrient and portion terms rises since 1977 and was driven by higher prices for milk, food and eggs arsenic good arsenic sugar, jam, chromatic and chocolate.

Just 3 years ago, successful December 2020, nutrient and portion prices were falling astatine an yearly complaint of 1.4%.