Tesco has become embroiled in a second major supplier dispute in a month over price increases linked to soaring costs in the food manufacturing sector.
Mars Petcare, the owner of brands such as Whiskas, Sheba, Cesar, and Pedigree, has paused supplies to Tesco, with stocks already running low in some stores. Chocolate and confectionery products owned by Mars are not affected.
The dispute is understood to be over efforts by Mars Petcare to raise prices, which Tesco is resisting.
Data by Assosia published by trade magazine The Grocer shows a string of price rises on Mars Petcare products in recent weeks. For example, a 12 pack of 85g Sheba Select Slices cat food pouches rose 50p to £5 in Asda this week and was subject to the same 11% price increase in Sainsbury’s and Morrisons last month.
Industry analysts say Tesco is trying to use its muscle as the UK’s largest grocery retailer to head off price rises from suppliers that are linked to the surging cost of energy, fuel, labour, packaging and raw ingredients.
A spokesperson for Tesco said the business was “laser-focused on keeping the cost of the weekly shop in check”.
They added: “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.
“We’re sorry that this means some products aren’t available right now, but we have plenty of alternatives to choose from, and we hope to have this issue resolved soon.”
A spokesperson for Mars reassured pet owners that its products were “widely available” in the UK, although some lines were out of stock at Tesco.
They stressed that it could not comment on individual commercial relationships or situations, but added: “The pet food industry, like many others, is operating in a volatile context marked by wide-ranging inflationary pressures, and we continue to absorb these rising costs as much as possible. The in-store price continues to be at the sole discretion of the retailer.”
Tesco is yet to resolve a similar dispute with Kraft Heinz, that came to light last week. The global manufacturing giant has paused supplies of some lines such as baked beans and tomato ketchup to the supermarket after negotiations between the two broke down. Tesco said it was not prepared to “pass on unjustifiable price increases to our customers”, whilst Kraft Heinz highlighted that commodity and production costs were rising and it was not prepared to compromise on quality. Both parties said they hoped to have the issue resolved soon.
