Tesco CEO Dave Lewis has warned food suppliers not to try and pass on “unjustified” price increases to UK consumers as a result of the weak pound, in the wake of the country’s vote to leave the European Union.
Lewis, speaking yesterday (17 November) after the retailer settled a row with Unilever over attempted prices hikes of some popular products such as Marmite, told a media briefing international suppliers did not need to push up prices because of the weak pound just to make profits look good to investors.
While suppliers have the right to try and increase the prices of products, it is also Tesco’s right to say “we will no longer stock them if they do so without a justified reason”, Lewis reportedly said.
Lewis, a former Unilever executive who joined Tesco two years ago, said: “I spent 28 years working in a multinational and there are always elements of currency volatility in businesses like that. When there is devaluation, what multinationals do is they present sales at constant and current exchange rates and the City understands.
“The only thing we would ask is that companies in that position don’t ask UK customers to pay inflated prices in order that their reporting currency is maintained. They don’t do that to countries outside of the UK.”
Tesco’s mission is to build “long-term value for four key stakeholders – customers, colleagues, partners, shareholders”, Lewis added.
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Tesco’s spat with Unilever hit the headlines last month when Unilever sought a reported 10% increase in prices in order to offset the depreciation of sterling, which had reached 30-year-lows following the June referendum result that will see the UK exit the EU.