The Daily Telegraph

Heinz avoids second row with Tesco as baked bean prices rise again

- By Daniel Woolfson

HEINZ is raising its prices for the second time in less than a year after a row with Tesco over passing soaring production costs onto consumers.

The company told The Daily Telegraph that as costs of energy and ingredient­s continued to rise, it had been forced to raise prices.

A Kraft Heinz spokesman said: “Like the rest of the food industry, we continue to face significan­tly increased production costs – whether it’s ingredient­s, energy, or packaging – and rising inflation. We’re trying to absorb costs wherever we can. However, we’ve unfortunat­ely had to increase our recommende­d retail prices.”

Shoppers seeking out the brand’s ketchup and baked beans products were met with empty shelves for weeks last summer when Tesco and Heinz locked horns over prices.

The UK’S biggest supermarke­t chain had refused to accept a price increase, so Heinz stopped making deliveries. At the time Tesco said it would not pass on “unjustifia­ble” price rises.

A settlement was eventually reached by the two parties, under which Heinz agreed to keep the price of certain key summer products down.

However, it is understood that Heinz has agreed the latest price increases with its major stockists and is not facing any comparable pushback.

Ultimately, shelf prices are set by the retailers rather than food companies like Heinz.

According to research by trade magazine The Grocer, the price of Heinz beans, ketchup and spaghetti has risen in multiple supermarke­ts since the start of the year. A 415g tin of baked beans, for instance, rose to £1.40 in Asda and £1.39 in Sainsbury’s, it found.

It currently costs £1 in Waitrose, which, despite its upmarket reputation, offers the cheapest deal on a single tin of beans. The price of a tin of beans stayed the same at £1.20 in Tesco, whereas the price of a tin of tomato soup in its stores has almost doubled, rising from 95p to £1.70 since June last year.

Tesco has locked the price of 19 Heinz products until Easter as part of a broader price lock campaign by the retailer, and advised that it matches Aldi on 12 further lines.

However, Heinz’s prices have been going up in Aldi, too, including the cost of 4x415g packs of Heinz beans, which have risen to £3.99.

The Heinz spokesman added: “As we manage inflationa­ry pressures, increasing the prices of our products is a last resort.”

The company had also “adapted our offer to consumers with different pack sizes, value ranges and lower price points”, he said, adding that Heinz would attempt to “offset” pressure on consumers by offering different kinds of promotions in stores.

The Tesco chief executive, Ken Murphy, said on Thursday that the chain was “battling” to keep its prices down and was determined that “only the justifiabl­e price increases come through”.

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