Bonne Maman jams and conserves are no longer on shelf in Tesco after the retailer rejected the supplier’s call for a price rise to cover soaring costs.
Over the past year, jam producers have been hit by rises in the cost of key ingredients. Confectionery sugar has soared 46% year-on-year, gelling agent pectin 29.4% and many soft fruit prices have also risen, including blackcurrants, which are up 13% and plums, up 40% [Mintec].
Like many other producers, Bonne Maman supplier Andros UK has been forced to pass these costs onto retailers. Although other supermarkets had agreed to the rises, Tesco had refused, claimed the supplier.
“Tesco are long-term customers of ours and we have the utmost respect for them, but these are tight and challenging times and we cannot afford to sell our product under cost,” said Andros UK president Derek Wilson. “Discussions are continuing and we hope to supply Tesco again.”
The situation echoes Tesco’s dispute with Premier Foods this spring, which saw the retailer delist 160 Premier Foods lines - including eight Hartley’s jams and a Robertson’s marmalade - after the supplier attempted to pass on increased commodity costs. The row was resolved and the lines relisted, but an investigation by The Grocer forced Premier to issue a profit warning and admit the dispute had cost it about £10m.
According to Brandview data, all 13 of Bonne Maman’s jams and conserves - which sold at between £1.88 and £2.29 at Tesco - have gone off shelf over the past few weeks. Industry insiders have suggested the retailer may look to its Finest conserves (rsp: £1.43) to fill demand for a premium jam range.
The dispute is a black mark at the end of a good year for Bonne Maman, which has risen more than 5% by value and volume according to Nielsen data [52w/e 3 October 2011].
A Bonne Maman chilled rum baba dessert and two cake lines - all produced under licence - have been retained by Tesco.