Shoppers are paying too much for branded baked beans and baby food, Britain's competition watchdog has found, as suppliers hiked prices more than their costs have increased.
Competition & The Markets Authority (CMA) said big brands are driving up food prices by raising prices more than necessary.
It says that about three-quarters of companies making products such as baby food, baked beans, mayonnaise and pet food are making more profit per unit than they did two years ago.
It follows sharp resistance from some of Britain's biggest consumer goods companies, which have rejected accusations of profiteering.
Earlier this year, Unilever responded to claims that it had raised prices on products including Marmite and Hellmann mayonnaise by more than it was necessary.< /p>
Former chief executive Alan Jope said: “I know this is an inconvenient truth, but we did not benefit in any way, shape or form.”
The competition regulator said these companies as a whole made smaller profits despite rising prices as more customers switched to own-brand alternatives.
Sarah Cardell, chief executive of the CMA, said: “Although in most cases leading brands have increased prices more than they have increased their own costs, own-label products generally provide a cheaper alternative.”
Her comments came after as the CMA released the findings of its latest investigation into food prices.
Regulators initially looked into claims of “greedy inflation” among supermarkets but found no evidence of wrongdoing.
However, the CMA said it would launch an investigation into supermarket loyalty schemes including Tesco Clubcard and Sainsbury's Nectar in January next year.
Supermarket profits are falling despite rising prices. Total industry operating profit
It follows Which?'s concerns as consumer group said shoppers who don't participate in the schemes could pay higher prices than usual if supermarkets didn't have loyalty cards.
The CMA said: “Food price inflation has placed enormous pressure on household budgets, so it is important that competition concerns do not add to the problem.”
The company said its investigation had identified a specific problem in baby food, as availability is very small own brand alternatives.
The CMA said it would review the performance of the baby formula market after prices rose 25 per cent over the past two years.
Earlier this year, supermarket bosses criticized the laws , restricting the sale of baby food in the UK.
Legislation designed to promote breastfeeding prevents retailers from telling customers about price reductions on baby food or allowing it to be included in loyalty programs.
Iceland managing director Richard Walker said the UK needed legislative changes, ” so that retailers can help families feed their children.”
About three-quarters of companies making products such as baby food, baked beans, mayonnaise and pet food are making more profit per unit than two years ago, according to the CMA.
Heinz has been criticized for fundraising. prices for last year. Tesco removed the brand's baked beans from its shelves in 2022 after they said unjustifiable proposed price increases.
Heinz said he needed to ditch the rising cost of ingredients. Tesco eventually relented and restocked the company.
Prices on many Heinz products rose again in January, which the company said was a “last resort” to cope with rising costs.
A Heinz spokesman said: “Price increases over the past two years have always been below inflation and we have absorbed the costs where we can. We do not expect any new price increases at this time.”
The CMA's findings follow sharp criticism from some of Britain's biggest consumer goods companies, which rejected allegations of profiteering.
Recent Comments