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Tesco And Heinz Achieve A Price Accord


09/07/2022


Tesco And Heinz Achieve A Price Accord
Tesco and Heinz have achieved a deal that will see some of the UK's most well-known goods return to Tesco's shelves in the coming days. Heinz beans and tomato ketchup were among the items that had vanished from Tesco's shelves due to a pricing dispute.
 
Tesco declined to disclose whether the new deal will result in pricing increases for specific products. The dispute highlights the constraints on businesses and suppliers as the cost of living rises.
 
The feud between Tesco and Kraft Heinz began at the end of June, when the US conglomerate attempted to raise the rates it charged the UK's largest supermarket.
 
Kraft Heinz stated at the time that manufacturing its products was growing more expensive.
 
Baked beans, ketchup, and tomato soup were among the items that vanished from Tesco shelves after Heinz ceased supplying the shop.
 
Tesco, on the other hand, announced on Friday that it had "agreed to bring the full range of Heinz products back to Tesco stores and online."
 
"Lorries full of Heinz products including Heinz Tomato Ketchup and Heinz Beanz will hit the road shortly, and Tesco colleagues will be working hard to ensure shelves are filled again over the coming days," Tesco said in a statement. "It's great to be back together."
 
The Daily Telegraph revealed last month that Heinz planned to charge 30% extra to supply some items.
 
On Friday, a Tesco representative declined to comment on how the agreement was reached or whether it will result in higher prices for customers.
 
In recent months, food manufacturers have reported growing expenses, including for energy and commodities, with some predicting that they may need to hike the prices they charge retailers.
 
In addition to Heinz, Tesco and Mars had a price dispute. This unresolved dispute has resulted in the US food giant suspending shipments of Whiskas pet food to the supermarket chain.
 
Ged Futter, a former Asda executive who is now a director at consultancy The Retail Mind, believes Tesco would have agreed to the price increases requested by Heinz.
 
"[Tesco] has to have those products on its shelves," he said, because Heinz products are available from so many other retailers.
 
He claimed Tesco was "merely encouraging buyers to purchase elsewhere" by not carrying those items at a time when many customers were being squeezed by rapidly rising prices.
 
Futter added that Mars could be in a better bargaining position than Kraft Heinz, partially because the volume of pet food it sells to Tesco accounts for a very minor portion of its overall company.
 
According to him, all food manufacturers are under significant pricing pressure, with "virtually everything" getting more expensive.
 
"Packaging, cans, plastic for bottles, cardboard, paper for labels - all going up. All ingredients: food, fertiliser, and fuel - all going up."
 
According to him, the price of fertiliser has risen from £150 per tonne to £1,000 per tonne this year. Costs are being passed on by medium and small businesses as well as large suppliers, according to Futter.
 
"If they supply at the previous cost they will go bust."
 
(Source:www.economictimes.com) 


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