Mars Petcare is the latest major supplier to hike prices at Tesco in a further sign Britain’s biggest grocer is re-evaluating its combative attitude to negotiations that characterised its high-profile fallouts last year.
Tesco pulled Mars and Heinz products from its shelves last summer over their “unjustifiable” price increases. However, both companies have now scored significant price hikes in the past few weeks.
Tesco chairman John Allan said last month that Tesco was still trying “very hard” to challenge suppliers if it thought prices rises were unjustified.
In January, prices rose on 62 Mars Petcare products at Tesco by an average of 11% across brands including Pedigree, Whiskas and Sheba, according to Assosia data analysed by the Grocer.
However, this average rise is less than than each of its three ‘big four’ competitors during the same period.
The hikes on Mars Petcare at Tesco came just a few weeks after Heinz hiked prices on dozens of products at the retailer by an average of 23% – more than any of its ‘big four’ competitors.
With Heinz and Mars Petcare scoring price rises in recent weeks, all eyes will now be on Colgate, the third global supplier with which Tesco fell out last year. While its prices remain flat at Tesco for now, last week saw it become more expensive at several other supermarkets.
Tesco has been approached for comment.
Tesco was just one of several supermarkets to pass on Mars Petcare price rises last week. At Sainsbury’s, six tins of Pedigree dogfood shot up by £2.50 and now costs £8. It means an overall year-on-year rise of 82%.
Asda, Morrisons, and Waitrose also hiked prices on Pedigree, the Grocer’s KVI tracker shows.
It means in many cases, Tesco is still the cheapest option for Mars Petcare products. For example, while at Tesco those six tins of Pedigree dog now cost £6.50 after an 85p jump last week, this is at least 40p less than Asda, the next cheapest supermarket, according to the tracker.
Mars Petcare said that while it was absorbing “substantial” cost increases in raw materials and operations, in some cases it “had to make the difficult decision to adjust our list prices on some products. However, retail pricing remains at the sole discretion of the retailer.”
It is bad news for pet owners all round with Nestlé Purina also pushing up prices last week. Purina Go-Cat adult dry catfood 750g went up by 45p in Tesco to £2.95, and in Morrisons by £1 to £3, according to the tracker.
A Nestlé Purina spokeswoman said that raising prices was a last resort. “The petfood industry, like many others, continues to experience significant and unprecedented cost increases due to the rising price of raw ingredients, packaging materials, transport, and energy.
“Our goal is always to keep products affordable, accessible and safe for consumers and their much-loved pets, while still paying fair prices to our suppliers such as farmers.”
Branded petfood is a category controlled by big names: Mars Petcare, Nestlé-owned Purina and Colgate-Palmolive. It is also a highly valuable category, bringing in over £1.7bn in sales in the year to 10 September 2022, according to the Grocer’s Top Products report.
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