Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Kraft Heinz pulls products from UK retailer Tesco in pricing row

Stock Markets Jun 29, 2022 18:36
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: Bottles of Heinz Tomato Ketchup, owned by the Kraft Heinz Company, are seen for sale in Queens, New York, U.S., November 16, 2021. REUTERS/Andrew Kelly

By James Davey and Kate Holton

LONDON (Reuters) - U.S. food giant Kraft Heinz (NASDAQ:KHC) has stopped supplying some products to Britain's biggest supermarket group Tesco (LON:TSCO), which resisted charging its customers higher prices for them at a time of surging inflation.

Tesco, which has an over 27% share of Britain's grocery market, apologised for the absence of popular Kraft Heinz products, such as baked beans and tomato ketchup, from its shelves but said: "We will not pass on unjustifiable price increases to our customers."

Kraft Heinz said it was battling to provide good value products in a market hit by rising commodity and production costs.

Tesco said its customers had plenty of both branded and own label alternatives to choose from and 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.

"We are confident of a positive resolution," they said.

The spat highlights the issue of whether manufacturers, retailers or consumers should bear the most pain of soaring cost inflation.

Tensions have been building throughout the system, with Tesco the UK retailer big enough to push back against Kraft Heinz's demands and Kraft Heinz one of the only suppliers powerful enough to stand its ground.

European retailers are locked in extended price negotiations with giant food companies which have announced plans to lift prices to curb the impact of soaring raw material costs, Reuters reported in February.

Britain's No. 2 supermarket group Sainsbury's said it was still selling a full range of Kraft Heinz products.

In a similar row in 2016 dubbed "Marmitegate," Tesco pulled dozens of Unilever (LON:ULVR) products, including the popular yeast spread, from its website after a plunge in the British pound, partly sparked by Brexit, exacerbated tensions between suppliers and retailers.

Kraft Heinz said that with commodity and production costs rising, it was seeking ways to provide value for customers "through price, size and packs" without compromising on quality.

SOARING PRICES

Prices are rising after the war in Ukraine restricted supplies of sunflower oil and boosted wheat and animal feed prices - pushing up the cost of meat, dairy and bakery products. Soaring energy and fuel prices, as well as increased labour and transport costs, have added to the mix.

Tesco said that with household budgets under increasing pressure, it had a responsibility to ensure customers get the best possible value.

In the UK, wages are struggling to keep pace with inflation that reached an over 40-year high of 9.1% in May and is heading for double digits. Some forecasters expect food inflation to hit 15% this summer and 20% early next year.

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.

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

Kraft Heinz pulls products from UK retailer Tesco in pricing row
 

Related Articles

Dow Futures Ease Ahead of Major Retailer Earnings
Dow Futures Ease Ahead of Major Retailer Earnings By Investing.com - Aug 16, 2022

By Oliver Gray  Investing.com - U.S. stock futures were trading slightly lower during Monday's evening deals, after major benchmark averages finished the regular session higher as...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Steve B
Steve B Jul 20, 2022 10:44
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Tesco is doing a good job by standing up to Heinz. I don't miss their product range at all. Tesco's own brand of ketchup is every bit as good.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email