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A-Brands

Tesco, Kraft Heinz Strike Deal To Resolve Pricing Row

Tesco and Kraft Heinz Co have struck a deal to bring back the U.S. food giant's products to the supermarket chain's shelves and make them available for online purchases in the coming days, the companies said on Friday.

Kraft Heinz had stopped supplying some products, such as tomato ketchup and baked beans, to Tesco as the supermarket chain resisted charging customers higher prices for them at a time of surging inflation.

"Lorries full of Heinz products including Heinz Tomato Ketchup and Heinz Beanz will hit the road shortly, and Tesco colleagues will ... ensure shelves are filled again over the coming days," the companies said.

'Unjustifiable' Price Increase

Tesco, which has an over 27% share of Britain's grocery market, had apologised for the absence of Heinz products but refused at the time to pass on "unjustifiable" price increases to its customers.

Kraft Heinz had said it was battling to provide good value products in a market hit by rising commodity and production costs.

European retailers are locked in extended price negotiations with giant food companies which have announced plans to lift prices to curb the impact of soaring raw material costs, Reuters reported in February.

Read More: Tesco First-Quarter Results – What The Analysts Said

Mars Pulls Supply

Earlier this week, Mars Inc also stopped supplying some petcare products to Tesco. The retailer said the impacted products were limited to Mars' petcare brands and that it hoped to resolve the issue soon.

"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," a Tesco spokesperson told Reuters on Tuesday.

News by Reuters, edited by ESM – your source for the latest A-Brands news. Click subscribe to sign up to ESM: European Supermarket Magazine.

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