Wed, 10 Aug 2022

LONDON, England: US food company Kraft Heinz has pulled some of its products from Tesco, the UK's largest supermarket group, which has refrained from charging customers higher prices, despite surging inflation.

Tesco apologized to customers for the absence of popular Kraft Heinz products, such as baked beans and tomato ketchup, stating, "We will not pass on unjustifiable price increases to our customers."

Kraft Heinz said it is working hard to offer good value products in a market which has been hit by rising commodity and production costs.

Tesco said it hopes the issue will be resolved soon, while a spokesperson for Kraft Heinz said it was working closely with UK supermarkets to quickly resolve the situation.

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

The incident highlights a wider issue of whether manufacturers, retailers or consumers should bear the brunt of soaring cost inflation.

In February, Reuters reported that European retailers are constantly negotiating prices with major food companies, which have announced plans to increase prices to make up for soaring raw material costs.

A similar row in 2016, dubbed "Marmitegate," saw Tesco removing dozens of Unilever products, including the popular yeast spread, from its website after a plunge in the British pound, partly caused by Brexit, which intensified tensions between suppliers and retailers.

With commodity and production costs rising, Kraft Heinz was seeking ways to provide value for customers "through price, size and packs," without compromising on quality, the US company said.

Tesco, however, noted that with household expenses increasing, it had a responsibility to ensure customers get the best possible value.

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