Some food firms may be driving up prices further than necessary by using inflation as an excuse, Tesco’s chair has told the BBC.

John Allan has been appointed chairman of Tesco

John Allan said Tesco had ‘fallen out’ with suppliers over price hikes

When asked by Laura Kuenssberg on her Sunday show if food producers were taking advantage of the poorest in society, Tesco chair John Allan said it was “entirely possible”.

As food inflation continues to rise at its fastest rate in 40 years, he said Tesco was trying “very hard” to challenge illegitimate price hikes.

“We do try very hard to challenge [price hikes], I think,” Allan said. “We have a team who can look at the composition of food and costs of commodities, and work out whether or not these cost increases are legitimate.”

It is something Tesco’s buying teams are dealing with “every day of the week”, he said.

He added that Tesco had “fallen out” with “a number of suppliers” after “robust” discussions over price hikes. 

Tesco, which currently has a 27.5% share of the grocery market, had a public row with Heinz over price hikes last year.

At the time, Tesco insisted it would “not pass on unjustifiable price increases to our customers” during the cost-of-living crisis and removed the FMCG giant’s products from its shelves. 

UK inflation dipped to 10.5% in December from 10.7% in November 2022, according to the latest consumer price index figures.

Despite the dip, inflation remains at its highest level in more than 40 years as the cost-of-living crisis continues to affect millions in the country.

However, food and non-alcoholic drinks inflation accelerated to 16.8% in December 2022, rising to its highest rate on record.

The biggest price increases have been seen across everyday grocery staples such as milk, cheese and eggs.