Britain’s favorite soup costs 40% more amid a rise in tomato prices and a shortage of factory workers, experts say, after war of words between Heinz and Tesco
- Heinz Cream of Tomato soup has risen from £1 to £3.50 for a carton at Sainsbury’s
- The price increase is due to more expensive tomatoes and labor shortages
- The increases have led to a fight with retail giant Tesco, which no longer has the soup in stock
Food experts blame the rising cost of tomatoes, as well as rising energy bills and a shortage of people in Wigan available to work at Heinz’s UK factory.
Across all foods, shoppers are facing an unprecedented price hike as leading brands such as Heinz and supermarkets try to maintain profit margins.
Last week, the cost of living crisis resulted in a war of words between Tesco and Heinz after it refused to relay the global food giant’s gains to shoppers. In response, Heinz said it would not supply soup, baked beans and ketchup, leading to empty spaces on the shelves.
Other stores have passed on increases, with Sainsbury’s selling a 4x400g pack of Heinz Cream or Tomato Soup for £3.50, up from £2.50. A single can costs from £1 to £1.40 in most supermarkets.
Across all foods, shoppers face unprecedented price increases as leading brands such as Heinz and supermarkets attempt to maintain profit margins
To understand the economy, The Mail on Sunday asked Heinz to explain the increases, which have also seen a can of baked beans rise by 30 cents to £1.20 and a 910g bottle of ketchup to £3. 15 to £3.50. But the bosses refused.
The MoS spoke to a range of nutrition experts to get a detailed analysis. Andrew Ashby, director of food supplier Brusco, says prices for the supply of processed tomatoes, which Heinz sources from Spain and Greece, have risen by 40 to 70 percent. Further increases are expected as ‘new season’ tomatoes hit the market.
Tomatoes make up 89 percent of the soup, made in a giant factory in Kitt Green, Wigan, Greater Manchester, using Lancashire water and canola oil from British farms. But other costs also play an equally important role in the increase.
Ged Futter, director of consulting firm The Retail Mind, which works with suppliers, and a former senior buyer at Asda, said labor costs could be an important factor.
He said workers’ wages have been raised at factories like the one in Wigan — where 850 workers produce 1.3 billion cans of soup a year — to compete with Amazon depots, which offer good hourly rates. ‘Working in a depot is more attractive than a noisy factory. Heinz is fighting to get hold of staff,” said Mr Futter.
Unemployment has also fallen in the Wigan region. Recent figures show a decline in the number of people applying for benefits in the past year: in March, just 4.4 percent of the workforce sought financial aid.
Other cost increases are due to the fact that the steel plate used for cans costs more. Mr. Futter says: ‘Heinz rolls its own cans, which takes a lot of energy.’ Cooking tomatoes at the very high temperature required to sterilize them also entails higher fuel bills.
Meanwhile, the cost of cardboard trays has risen by 40 percent.
Brandt Maybury, co-founder of food development consultant Tastehead, said that typically one-third of the supermarket price for items like soup includes the cost before it leaves the factory door — including ingredients, manufacturing and packaging. The other two-thirds are for delivery, warehousing, logistics and, crucially, profit margins for the retailer and the brand.
Andrew Ashby warns: ‘There will be 18 more months of increases. The only hope is a dramatic drop in energy costs, which is a major driver of rising costs.’