Some food companies could be raising prices more than needed, using the current economic climate as an excuse, a supermarket boss has admitted.
John Allan, chairman of Tesco, said it was “entirely possible” that some suppliers are taking advantage of the situation to hike prices, adding to the cost of living crisis.
Allan made the comments under questioning from the BBC’s Laura Kuenssberg, who referred to hikes in the price of products such as a tin of soup.
Asked if suppliers are “taking the mick”, the Tesco chairman said: “I’m not sure I’d use those terms but I know that there have been very robust discussions between Tesco and a number of suppliers.”
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He said the supermarket chain hadn’t stocked certain products including Heinz soup and tomato ketchup last summer due to disagreements over price increases and admitted that the company has “fallen out with other suppliers” over pricing.
“We have a team who can look at the composition of food, costs of commodities, and work out whether or not these cost increases are legitimate,” he said.
Asked if food companies are “taking advantage” of consumers at an already-difficult time, Allan replied: “I think that’s entirely possible”.
He said there had been “dramatic increases in commodity costs, energy costs and labour costs” and rising prices had seen people “trading down” from named brands to own brands and even budget options.