Food suppliers clash with Tesco chairman over price rise claims

Food and farming suppliers have clashed with Tesco chairman John Allen over claims that they are using high inflation to raise prices unnecessarily.

It comes after John Allan, when asked by the BBC’s Laura Kuenssberg if food producers are taking advantage of poor households in society, said it is “entirely possible”.

Mr Allan, the chairman of the UK’s largest supermarket chain, added that the company has “fallen out with suppliers” over price rises and is trying “very hard to challenge cost increases”.

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The head of the National Farmers Union hit back at the grocery executive’s comments.

“It was almost like living in a parallel universe. We are seeing wholesale gas prices 650% higher than back in 2019 and the cost inflation on the back of that has been unprecedented. “This has dwarfed any price increases to date,” NFU president Minette Batters told the BBC’s Wake Up To Money.

The head of the UK’s Food and Drink Federation (FDF) has also criticised Mr Allan’s remarks.

“All of our suppliers know they have got huge responsibilities to keep food affordable. They are all making savings where they can,” Karen Betts told BBC Radio 4’s Today programme.

“Most supermarkets are asking suppliers to open their books to justify line-by-line where the cost increases are coming in. So I think it is difficult for Tesco to come out and say they think that companies might be profiteering,” she added.

Former senior buyer at Asda and now a retail analyst, Ged Futter, said Mr Allan’s comments were “outrageous”.

He said that some retailers have been raising their prices above the rate of inflation, which was 10.5% in December: “So I would say it is quite disingenuous to be talking about suppliers profiteering at this time,” Mr Futter said.

The retailer was caught up in a row with Heinz last year over proposed price increases, leading to the sale of some products being pulled from stores. More recently, the FMCG giant has now raised its prices for the second time in less than a year.

The news comes after food and drink inflation hit 16.9% in December, according to the Office for National Statistics (ONS). It is the highest rise since 1977, and has driven up prices for milk, cheese and eggs as well as sugar, jam, honey and chocolate.



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