Tesco chairman ‘living in parallel universe’ warn producers in food pricing row

Food and farming chiefs have said they are “baffled” by suggestions from a boss of Tesco that some food firms may be using inflation as an excuse to increase prices further than necessary.

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

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

The retailer was caught up in rows with Heinz and Mars Petcare last year over proposed price increases, leading to the sale of some products being halted in stores.

On Monday, the head of the National Farmers Union hit back at the grocery executive’s comments.

NFU president Minette Batters told the BBC’s Wake Up To Money: “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.”

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

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

“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.

“I think they absolutely have the evidence for every single price rise.”