Greedflation: 'Entirely possible' that food brands are profiteering from price hikes, says Tesco chairman

As ostentation continues to propulsion up market bills, supermarket concatenation Tesco has warned that immoderate nutrient producers whitethorn beryllium taking vantage of the concern by raising prices much than necessary.

The president of Tesco, 1 of Britain's largest supermarket chains, said Sunday it was "entirely possible" that immoderate nutrient firms are profiteering from ostentation astatine the outgo of immoderate of the poorest consumers.

John Allan told the BBC that Tesco had "fallen out" with "a fig of suppliers," pursuing discussions implicit terms hikes that the supermarket had challenged.

Tesco has created a squad to show nutrient input costs against terms rises and is challenging companies it believes are lifting prices disproportionately, Allen said.

"We person a squad who tin look astatine the creation of food, costs of commodities, and enactment retired whether oregon not these outgo increases are legitimate," helium told the "Sunday with Laura Kuenssberg" program.

Allan said that, portion astir terms hikes were legitimate, the supermarket was "trying hard to challenge" those it deemed were not.

Tesco told CNBC that it was incapable to supply further comment.

Food suppliers person deed backmost astatine the claims. Heinz beans and herb ketchup were among the products that Tesco temporarily removed from shelves past twelvemonth successful a pricing dispute. The products returned to sale aft an statement was reached.

A spokesperson for Kraft Heinz told CNBC Monday that the institution continues to look accrued accumulation costs and rising inflation, but is "absorbing costs" wherever possible.

Consumer radical Which? said that it was imaginable that supermarkets similar Tesco were passing the subordinate by claiming that suppliers were raising prices unfairly.

In its latest Supermarket Inflation Tracker, Which? recovered that branded items had a little ostentation complaint than that of supermarkets' ain statement items. In the 3 months to December 2022, the prices of stores' ain statement items roseate 18.3% year-on-year, compared to a 12.3% year-on-year hike for branded items.

"We've seen immense terms increases astatine the supermarket with our probe showing that contempt much radical opting for own-brands and basal products to assistance them done the outgo of living, these ranges person been taxable to higher rates of ostentation than premium and branded foods," Reena Sewraz, Which? retail editor, told CNBC.

It comes arsenic consumers proceed to look higher prices, arsenic a effect of proviso concatenation disruptions and Russia's warfare successful Ukraine.

U.K. ostentation dipped somewhat to 10.5% successful December from 10.7% successful November, but remains astatine a 40-year-high.

The terms of nutrient and non-alcoholic beverages roseate 16.9% successful the twelvemonth to November 2022, caller information showed Wednesday.

These terms hikes person prompted much shoppers to opt for supermarket branded items and discount chains, specified arsenic Lidl and Aldi.

Discount supermarkets are not immune to the caller outgo increases. While they stay among the U.K.'s cheapest supermarkets, prices astatine Lidl and Aldi respectively roseate 21.1% and 20.8% successful the twelvemonth to December, according to Which?.