Pricing row sees Kraft Heinz pull products from Tesco in UK
Tesco Ireland has said the issue will not affect its supermarkets here as it is a UK issue only
Print5 July 2022
US food giant Kraft Heinz is no longer supplying certain products to Tesco in the UK, after the supermarket group said it wouldn’t charge customers higher prices for them.
Apologising for the absence of Kraft Heinz products such as baked beans and tomato ketchup from its UK shelves, Tesco said: “We will not pass on unjustifiable price increases to our customers.”
However, Kraft Heinz said it was battling to provide good value products in a market heavily impacted by rising commodity and production costs.
A spokesperson for Tesco Ireland said the issue will not affect its supermarkets here as it is a UK issue only.
Tesco UK added that customers had many branded and own label alternatives to choose from, and that it hoped to have the issue resolved soon.
A spokesperson for Kraft Heinz said it was working closely with Tesco to resolve the situation as quickly as possible, and is “confident of a positive resolution.”
As RTE News detailed in its coverage, the spat highlights the issue of whether manufacturers, retailers or consumers should bear the most pain of soaring cost inflation.
While Tesco has the might to push back against Kraft Heinz’s demands, Kraft Heinz is one of the only suppliers powerful enough to stand its ground.
Reuters reported in February that European retailers are locked in extended price negotiations with giant food companies which have announced plans to lift prices to lessen the impact of soaring raw material costs.
Greg Phillips, CEO of retail support services group Dee Set, believes the argument is boosting Tesco’s image as a consumer champion.
“Peace will soon break out, but the free publicity is doing Tesco no harm,” Phillips said.
“They are using it as a bit of leverage and it’s boosting their image as a consumer champion. We are also seeing that people are starting to trade down from well-known brands to own-label, so there is an element of ‘you need us more than we need you’ from the supermarket giant.”
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