Tesco chief warns brands not to make consumer pay for weak pound

The chief executive of Tesco, Dave Lewis, has warned multinational consumer brand owners, such as Marmite's parent Unilever, not to push currency-related price hikes on to UK shoppers. Lewis said consumers should not be asked to pay ''inflated prices'' due to fluctuations in currencies, such as the post-referendum slump in the pound.

''I spent 28 years working in a multinational and there are always elements of currency volatility in businesses like that,'' said Lewis, who joined Tesco from Unilever two years ago. ''When there is devaluation, what multinationals do is they present sales at constant and current exchange rates and the City understands. 

''The only thing we would ask is that companies in that position don't ask UK customers to pay inflated prices in order that their reporting currency is maintained. They don't do that to countries outside of the UK.'' 

Last month, Tesco took brands such as Marmite, PG Tips tea and Pot Noodles off its shelves after consumer goods giant Unilever increased prices 10 per cent to compensate for the weaker pound. The matter was quickly resolved, but neither side had disclosed the terms of the peace deal.

According to Tesco, even though inflationary pressures were rising in the UK, it would only increase prices if it saw evidence of suppliers coming under "legitimate" cost pressures.

The pound is down 16  per cent against the US dollar since the UK voted to leave the EU in June.

According to official data released earlier this week the UK's inflation rate unexpectedly fell to 0.9 per cent in October from 1 per cent in the previous month.

However, according to analysts, inflation would likely edge towards the Bank of England's 2 per cent target over the coming 12 months due to the weaker pound.