In a tense session at the Environment, Food and Rural Affairs Committee, Barry Gardiner accused representatives from food manufacturing companies of taking the public for ‘mugs’
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Barry Gardiner gets angry after Kraft Heinz refuses to answer question
A Labour MP has torn apart Kraft Heinz and Unilever for raking in huge profits and said they owe an apology to families struggling to buy their products.
In a tense session at the Environment, Food and Rural Affairs Committee, Barry Gardiner accused representatives from the food manufacturing companies of taking the public for “mugs” as he questioned how they could claim times had been “tough” as profits soared. During the grilling, he complained about them failing to give direct answers, as he even revealed the committee’s clerks had been forced to ask “a number of times” to get them to attend the panel.
As he opened his questioning, Mr Gardiner said: “I want to start off by setting out what the public feel, because you’ve confected this issue… about how it’s tough out there. But the thing is, when the public looks at your companies, they know it’s been tough out there but they don’t know it’s been tough for you.”
Barry Gardiner said the food manufacturing companies owe an apology to families struggling to buy their products
Mr Gardiner went on: “Eight out of the top 10 food manufacturers including Unilever, including Associated British Foods made £23billion of profit post-pandemic [compared] to pre-pandemic and only 11% of public limited companies actually saw their profits increase during that period.”
He said the “fair-minded” public will understand if Russia’s invasion of Ukraine and the pandemic have impacted production prices, which are passed down onto prices on the shelves, but they therefore expect profits to stay “roughly the same”.
But he pointed out that Kraft Heinz profits has risen from £265million to £1.8billion, or by 6.79 times, adding: “How do you justify that to the family that is struggling?”
When Dominic Hawkins, head of supply chain at Kraft Heinz, tried to dodge the question and say he would have to reply in writing, a frustrated Mr Gardiner hit back: “I’d like you to reply now, because you owe it to this committee. You knew what you were coming here for. You knew that we were concerned about GDP, gouging, ‘greedflation’, profiteering. You knew that’s what you were going to be drilled on so please give me the answer now, not in some letter later on when it’s not in the public eye.”
Mr Hawkins insisted “we’ve always passed on less than the input inflation we’ve seen”. “So if I give you some examples of that, and we look at some specifics around the inflation we’ve seen in our input costs. In the years from 2021 to 2023, we’ve seen a 16% increase in the cost of our beans, we’ve seen a 101% increase in the cost of our tomatoes, which is a key ingredient both in our beans and tomato ketchup,” he said.
“And we’ve seen around a 50% increase in the cost of tinplate which we use to manufacture our tins. So I can assure the Committee on is on a percentage basis, we’ve put through less cost price increases than we’ve seen as our input inflation.”
Pressed again on how Kraft Heinz had managed to make almost seven times its profits, Mr Hawkins added: “There are lots of other factors that make up… a bottom line profit.”
Mr Gardiner also grilled Marc Woodward, the UK and Ireland head of Unilever, on its profits, saying: “You’ve made hugely increased profits, in one year the jump was from £5.1billion to £6.5billion.”
Mr Woodward said the UK market is “incredibly competitive” and said “you simply cannot run a successful organisation in this market by pushing forward prices that are not justified”. Mr Gardiner pointed out: “Let’s go to your net margins: 10.8%, 11.5%, 12.&% – they’re going up. They’re huge and they’re going up. This is not just: ‘This year, on a one-off basis, we managed to reduce our costs phenomenally.’ No, actually, this is huge.”
Mr Woodward said: “I’m not familiar with the numbers you’re coming up with… the margin to which I think you are referring is I think relatively static between 4.5 and 6% last year.”
Mr Gardiner responded: “I come back to the main point: just 11% of publicly listed companies saw their profits increase. Yours did and the public are suffering and they look at your companies and they think, not just, why aren’t these guys helping us? They think: we’re owed a bloody apology, you’ve been taking us for mugs.”
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