Tesco chairman John Allan admits prices WILL go up due to weak sterling and higher inflation
John Allan, the chairman of Tesco, has admitted that prices will increase at supermarkets if the pound stays at its current level.
The chain temporarily pulled some of its products, including Marmite and PG Tips, from its online stores earlier this month after its supplier, Unilever, demanded a 10 per cent increase in prices due to the weak pound.
Allan said today that price rises were "very likely".
"If [the pound] stays where it is, it's likely," he told Radio 4's Today programme, but added that he would ensure any supplier who wanted to hike up prices would be scrutinsed.
"I think we see our role as retailers not to prevent our suppliers from making legitimate cost increases where they think it's necessary, but certainly scrutinising those cost increases," he said. "That it is likely there will be some price increases going forward? I think it's very likely."
He said it would probably be "much less" than 10 or 20 per cent, but also added that inflation could "nudge up to two or three per cent… food prices would be a part of that."
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Allan also expressed concern over the government's approach to immigration policy post-Brexit. Ministers have indicated they want to keep "top talent" coming to the UK, but suppliers in agriculture are worried that migrants who work in picking and packing fresh supplies could not be included.
Andrew Leadsom, the environment secretary, has suggested that British youth should take up the jobs currently done by EU migrants and build a career in food production.
"My absolute hope is that with more apprenticeships, with more young people being encouraged to engage with countryside matters, that actually the concept of a career in food production is going to be much more appealing going forward," she told a fringe event at the Conservative party conference.
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"I know our fresh food suppliers are very concerned that this is properly taken into account," Allan stressed.
"We don't just need brain surgeons and architects, we need many people who do much more ordinary but nonetheless very important jobs."