Greedflation: Giants behind brands from Heinz soup to Head & Shoulders hike prices up to 73% – as they rake in £50billion in profits
The consumer giants behind some of Britain’s favorite brands – from Heinz baked beans to Head & Shoulders shampoo – have been accused of greed and profiteering after hitting shoppers with huge price hikes while realizing windfall profits.
Struggling families have been hit by anti-inflationary hikes on products such as Heinz Tomato Soup – which has soared 73% from 98p a can to £1.70 in a year – while multinationals behind them earn billions.
Critics say companies should use their huge profits to absorb some of the rising production costs, rather than passing them on to customers, and called on market watchdogs to intervene.
The Mail on Sunday can reveal that seven of the biggest consumer companies are set to unveil combined profits of £50billion for 2022, up £2billion from the previous year.
The Mail on Sunday can reveal that seven of the biggest consumer companies are set to unveil combined profits of £50billion for 2022, up £2billion from the previous year
Yet they have imposed steep price increases at checkout, such as Unilever raising the price of Hellmann mayonnaise by 42% from £1.75 to £2.49; Procter & Gamble Head & Shoulders Shampoo is up 21% from £2.33 to £2.83 and Heinz Baked Beans is up 35% from £1 to £1.35.
Such hikes expose companies to accusations of “greed” – using the cost of living crisis as a cover to raise prices more than necessary.
Consumer champion Baroness Ros Altmann said: ‘To any normal consumer this looks like greed and it needs an explanation.’ It feels like they charge as much as they can get away with.
‘There should be a CMA [Competition and Markets Authority] investigate what is going on. If we want to control inflation, we will have to investigate prices.
Yet they have imposed steep price increases at checkout with exploding costs for consumers
Sir Chris Bryant, the veteran Labor MP, said: ‘Under the guise of the cost of living crisis, these businesses seem to be indulging in shameless profiteering. It’s time they eased off the greedy pedal and gave consumers a better deal.
Tory MP Mark Garnier said: ‘It’s normal for companies to report to their shareholders, that’s capitalism.’ But modern shareholders are looking for companies that have a commitment to the community and their environment.
“These companies must demonstrate how they help those who are suffering and our society at large. If they don’t, their shareholders and customers will abandon them.
Among the companies making the $50 billion total in global profits, Mondelez (the American conglomerate that owns Cadbury chocolate and Philadelphia cheese), Danone, Nestlé, Procter & Gamble and Reckitt Benckiser (which owns Dettol, Harpic, Finish and more ) should say that last year’s profit was significantly higher than 2021’s.
Meanwhile, Unilever and Kraft Heinz are expected to say their numbers are broadly similar to the prior year.
Unilever said it was trying to “absorb as much” of the impact as possible, and Danone said it was saving money where possible. Mondelez said it was “impossible” to protect consumers from the impact, but P&G and Reckitt had no comment.
P&G last week raised its annual sales forecast after imposing several price hikes last year – and chief financial officer Andre Schulten said there were more to come. In October, Nestlé announced its strongest sales growth in 14 years with average price increases of 7.5%.
Reena Sewraz, editor of consumer magazine Which?, said: “We’ve seen huge price increases on many beloved branded products over the past year or so, with our own findings showing increases in well over 100% in some supermarkets.’
Other rises reported by market research firm Assosia include P&G’s Ariel washing up liquid up 25% from £5.83 to £7.27, Heinz tomato ketchup up 39 % from £2.30 to £3.20 and Nestle Cheerios, up 20% from £2.45 to £2.45. 2.93.
In many cases, supermarket branded products are considerably cheaper than their brand name equivalents.
Spokesmen for Nestlé and Kraft Heinz said separately last night that the price hikes were a ‘last resort’. Nestlé said it was absorbing billions of dollars in costs while Kraft pointed out that energy bills had risen 609% since 2019.
Unilever said it was trying to “absorb as much” of the impact as possible, and Danone said it was saving money where possible. Mondelez said it was “impossible” to protect consumers from the impact, but P&G and Reckitt did not comment.
“It’s time for consumers to get a better deal”