Heinz Pulls Products From Tesco Shelves Over Price Dispute

Heinz has paused its supply of products—including Heinz baked beans, ketchup and salad cream—from Tesco, in a dispute over pricing.

The supermarket chain—which has about 27% of the UK’s grocery market, according to research firm Kantar—said it had “plenty of alternatives to choose from” and hoped to resolve the issue soon.

A Tesco spokesperson said: “With household budgets under increasing pressure, now more than ever we have a responsibility to ensure customers get the best possible value, and we will not pass on unjustifiable price increases to our customers.” The supermarket added it was “laser-focused on keeping the cost of the weekly shop in check” as food price inflation continue to rise amid the cost of living crisis.

Kraft Heinz, which owns the brand, said its production costs were rising but it was working with Tesco to resolve the situation quickly. “In today’s challenging economic environment—with commodity and production costs rising—many consumers are working within tight budgets. We always look at how we can provide value through price, size and packs so consumers can enjoy the products they love and trust at a price point that works within their budgets, without compromising on quality.”

Andy Clarke, former chief executive of Asda and now chairman of Newton Europe, has said the Tesco and Heinz provided an indication of just how much supermarkets are trying to reduce costs: “It’s about pricing,” he told BBC Radio 4’s Today programme. “And this is not a new thing. Resellers and manufacturers do disagree at times, and sometimes the impact is that a supplier will stop sending products to those stores.”

Clarke said it is not a PR exercise for Tesco, adding: “This, I would suggest, is about those two businesses getting to an agreement as to what a cost increase looks like, and then Tesco have to decide how much of that they’re going to pass on protect their shoppers.”