Tesco is forcing suppliers to open their books and justify price increases “line by line” according to food chiefs amid a row over profiteering.
The head of the National Farmers’ Union has said she is “baffled” by statements from the chairman of Tesco in which he accused suppliers of taking advantage of surging inflation by rising prices.
Britain’s biggest supermarket was caught in a row over price rises with Heinz last year, which saw the retailer temporarily halt sales of beans and ketchup in its stores.
John Allan, the supermarket’s chairman, said on an appearance on Sunday with Laura Kuenssberg that the company had “fallen out with suppliers” and was trying “very hard to challenge cost increases”.
Minette Batters, president of the National Farmers’ Union, told the BBC’s Wake Up to Money podcast: “It was almost like he was living in a parallel universe.
“We are seeing wholesale gas prices 650pc higher than it was back in 2019 and the cost inflation on the back of that has been unprecedented. It has dwarfed any price increases to date.”
Karen Betts, chief executive of the Food and Drink Federation, described Mr Allan’s comments as “difficult”.
She told BBC Radio 4’s Today programme: “Supermarkets are very tough on this. Most supermarkets are asking suppliers to open their books to justify exactly line by line where the cost increases are coming in.
“I think it is difficult for Tesco to come out and say they think companies might be profiteering.
“I think they absolutely have the evidence for every single price rise.”
Retail analyst Ged Footer, a former senior buying manager at Asda, said he “couldn’t agree more” with Ms Batters’ comments.
He told BBC Radio 4’s Today programme:
It is quite outrageous to be suggesting that suppliers are actually putting prices up higher than this.
Over the past 12 months suppliers have worked really hard and had to go with five, six or seven cost increases in one year.
They are working as hard as they possibly can not to have to go there [and put up prices] but when your costs are increasing then you have to, otherwise, frankly, your business will go bust.
What [Mr Allan] is failing to recognise is we are seeing inflation at levels we have never seen before.
What he also seems to forget is that the price on shelf is the responsibility of the retailer, not the supplier.
It is quite disingenuous to be talking about suppliers profiteering at this time.
