Heinz pulls products from Tesco in pricing row

Kraft Heinz has pulled some products from Tesco the largest retailer in the UK in a disagreement over prices.

The announcement late on Wednesday, June 29, came after Heinz said that Tesco had refused to pass on higher prices for their products which had been adversely affected by rising raw material and logistics costs.

Tesco apologised to customers for the lack of Heinz products saying: “We will not pass on unjustifiable price increases to our customers.”

Tesco has offered its customers its own name brand and other labelled alternatives whilst they try and resolve the issue with Heinz, who said: “We are confident of a positive resolution.”

With rising raw material costs and continuing logistical difficulties, many suppliers are pushing up their prices however few are in a position to push back. Tesco with more than 27 per cent of the UK market is a company that can afford to.

The spat is just one of those being seen across Europe and the rest of the world. Earlier this year Ahold Delhaize’s Albert Heijn chain, the largest Dutch supermarket, removed Nestle products, including Maggi, KitKat and Nescafe from its stores because Nestle increased prices.

Earlier this month, French food giant and the world’s biggest yoghurt maker Danone said was cutting the variety of products it sells, with soaring prices forcing it to rethink how it sells its products.

Heinz products continue to be available elsewhere with Kraft Heinz saying it was seeking ways to provide value for customers “through price, size and packs” without compromising on quality.  

Tesco, who has for many years seen itself as the defender of customer value, said it needed to keep prices down to help those who are suffering.

Kraft Heinz acknowledged the need to do this but cited higher raw material prices, soaring energy costs, logistic difficulties and increasing labour costs as the reasons for their price increase.

Inflation in the UK is running close to 10 per cent with food inflation running considerably higher, with no end in sight as Heinz pulls its products from Tesco in a row over pricing.

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