Tesco increased its prices before dropping them for a major consumer promotion it has been claimed. Some products in the "1,000 price cuts" offer are now more expensive than January.
Tesco Ireland marketing director Kenny Jacobs went on Morning Ireland to defend the 1,000 product promotion and said all items in the campaign were cheaper than they were in January.
He was challenged by The Irish Times consumer affairs correspondent and RTE contibutor Conor Pope who has reported that some of the products in the promotion now cost more than they ded at the beginning of the year. His interview can be heard in this Morning Ireland podcast. Listen from 23 minutes in.
Pope says that at the end of December a range of Tropican orange juice was selling for €2.28. Its price went up to €2.59 at the end of January before being marked down to €2.49 as part of the new price campaign, making it 21 per cent dearer than it was 12 weeks ago.
Flahavan's Progress Oatlets now cost 6 cent more than they did at the beginning of the year while Strawberry Conserve by Bonne Maman is being advertised this week as having a reduced price but costs exactly the same (€2.79) as it did at the beginning of the year.
Other products listed by the Irish Times as having being increased in prices and then reduced include Donegal Catch and Ariel Excel Febreze.
"I don't want to be unduly fair to Tesco, I think it's important to point out the price I'm highlighint here have not fallen since beginning of year and some have increase. There's 1000 price reduct across the store and many of the product have fallen in price so I don't think we should be unduly harsh to the retailer," said Pope.
But he added Tesco had a similar campaign in the UK with 1,000 price cuts and trade magazine, the Grocer, had identified more than a third of prices had gone up as well."
Tesco's Rogers defended the prices increases on some products such as fish and fruit jam which fluctuate in the commodity market.
But he said there are "over 1,000 price cuts as part of the campaign" and 1,000 of those were "now cheaper than they were up in January." He said that "on top of that there were also commodities" whose prices fluctuated.
"It's important we don't confuse world commodity price pressure with these price cuts," he said.
"The examples that Conor mentioned. These are all commodities. The price of these proucts are generally driven by pressure in the world, in Tesco, Ireland...forcing up the price of these essential products coupled with the significant increase in price of fuel. That's something that's not specific to tesco that's global," said Rogers.
But does Tesco take a hit on the price cuts?
Tesco has been challenged to clarify who carries the cost of its special offers to consumers.
MEP Mairead McGuinness said it is extremely difficult for consumers to keep track of movements in prices and to know whether they are actually getting real value when they shop.
Ms McGuinness called on Tesco and other major multiples to clarify their policies in relation to price promotions on a range of products, including food.
The MEP is Chairperson of a retail group set up by the European Parliament, which is working to bring about greater transparency in pricing.
She said it is important for consumers to know whether Tesco actually takes a reduction in its profit margin in favour of offering value to consumers or whether Tesco, because it is a very large retailer, puts pressure on its suppliers to supply goods at lower cost.