How Heinz hopes to cash in on 12% rises

KRAFT Heinz is predicting stronger revenues on the back of a 12 per cent price rise on its best-selling products, ranging from baked beans and ketchup to soups, sauces and baby food.

Chief executive Miguel Patricio explained the hikes, which are designed to protect profits, saying they are a result of ‘anticipating and adapting to changing market conditions’ and ‘managing inflation through pricing realisation and gross efficiencies’.

The company was recently at loggerheads with Tesco, which refused to pass along price increases for Kraft Heinz products that it considered ‘unjustifiable’. The companies reconciled and products are back on the shelves.

The higher prices meant the value of sales made by the company grew more than expected in the three months to June.

As a result it is predicting annual sales revenue will increase by close to 10 per cent this year, compared with previous predictions of about 5 per cent.

Unilever, which makes everything from Marmite to Magnum, revealed this week it had pushed up prices by more than 11 per cent. And yesterday, the company behind Dettol, reckitt Benckiser, revealed that it has increased prices by 9.7 per cent this year.

A combination of higher prices and increased sales meant that reckitt posted an 11.9 per cent increase in like-for-like revenue, hitting £3.5 billion.

reckitt said the standout performer was its nutrition arm, which makes baby formula. Net revenue in its nutrition business rose 23.6 per cent in the first half of the year, hitting £1.2 billion on a like-for-like basis.