Tesco boss in ‘parallel universe’ over price rises, says UK farmers’ chief

(Photo by DANIEL LEAL/AFP via Getty Images)

Britain’s farming union has called on the boss of Tesco for living in a “parallel universe” after he said food companies may be using inflation as an excuse to hike prices further than necessary.

Official inflation data for December published last week showed food prices 16.8 per cent higher than a year earlier, the sharpest increase since September 1977, led by eggs, milk and cheese.

Asked by BBC television on Sunday if food producers were taking advantage of the poorest in society, Tesco chairman John Allan said it was “entirely possible”.

He said the retailer was trying “very hard” to challenge price hikes it thinks are illegitimate.

Reacting to Allan’s comments, president of Britain’s National Farmers’ Union, Minette Batters said she is “slightly baffled”.

“It was almost like he was living in a parallel universe,” she told BBC radio today (23), noting farmers and growers were facing unprecedented hikes in production costs.

“We’re seeing a wholesale gas price that’s 650 per cent higher than it was back in 2019 and the cost inflation on the back of that has been unprecedented and it has dwarfed any price increases to date,” she said.

Talking about last year’s spat with U.S. food giant Kraft Heinz, Allan said there had been “very robust discussions” between Tesco and a number of suppliers.

“We didn’t have Heinz soup and Heinz tomato ketchup for a spell last summer when they tried to put through a large price increase at that stage. That was eventually settled,” he said.

“We’ve fallen out with other suppliers. So we do try very hard I think to challenge cost increases.”

Last week Tesco, which has a 27.5 per cent share of Britain’s grocery market, reported better-than-expected Christmas trading.