Tesco is donating £40,000 to The Poppy Appeal after an investigation by The Grocer revealed the Royal British Legion had become the unwitting victim of a pricing spat.
The supermarket delisted 11 Hovis lines on 23 September in a reported pricing dispute, as Premier Foods attempted to pass on commodity-based price hikes on the popular loaves in the heat of a fierce promotions war.
But two of the delisted loaves Seed Sensations Rich & Roasted and Light & Nutty featured in an on-pack promotion to raise money for the British Legion, with Hovis donating 4p from each sale to The Poppy Appeal.
Last year, the campaign raised £130,654 for the charity and Hovis expected the four-week promotion to exceed that this year.
But by the time the promotion started on 20 October, the two loaves had already been taken off Tesco shelves.
On Thursday, The Grocer quizzed Tesco as to whether the dispute was to the detriment of The Poppy Appeal. Two hours later, the retailer said it would donate a sum to the charity. According to a Tesco source, the donation is expected to be about £40,000.
"Tesco is one of the biggest supporters of the Royal British Legion Poppy Appeal and collections at our stores account for almost 10% of all the funds raised," said a spokesman. "We are aware that some bread lines not sold at Tesco are raising funds for this great cause and so we are making a further direct donation to offset this."
The spat with Tesco follows Premier's warning to the City in August that rocketing wheat costs currently up 55% on last year would force it to pass on price rises to retailers.
In an interim statement this week, CEO Robert Schofield said the company had managed to recover the sharp rise through "constructive" re-pricing discussions on its entire bread and flour range with leading retailers, countering input cost inflation.
According to BrandView.co.uk data, the average retail price for a Hovis loaf across the big four has risen 13% since early September, whereas arch rival Warburtons has kept prices flat over the past two months. At 88p, the price of a Hovis loaf in Tesco is still the same as it was in April, however, and lower than its 92p year-high in June.
With wheat prices set to rise even higher as Russia this week extended its grain export ban by another six months to 1 July, Warburtons marketing director Richard Hayes admitted it had followed Hovis in passing on the hikes.
Sales of Premier's Hovis business have held up well, increasing 9.5% in volume and 1.8% in value thanks to promotional activity and increased distribution.
The supermarket delisted 11 Hovis lines on 23 September in a reported pricing dispute, as Premier Foods attempted to pass on commodity-based price hikes on the popular loaves in the heat of a fierce promotions war.
But two of the delisted loaves Seed Sensations Rich & Roasted and Light & Nutty featured in an on-pack promotion to raise money for the British Legion, with Hovis donating 4p from each sale to The Poppy Appeal.
Last year, the campaign raised £130,654 for the charity and Hovis expected the four-week promotion to exceed that this year.
But by the time the promotion started on 20 October, the two loaves had already been taken off Tesco shelves.
On Thursday, The Grocer quizzed Tesco as to whether the dispute was to the detriment of The Poppy Appeal. Two hours later, the retailer said it would donate a sum to the charity. According to a Tesco source, the donation is expected to be about £40,000.
"Tesco is one of the biggest supporters of the Royal British Legion Poppy Appeal and collections at our stores account for almost 10% of all the funds raised," said a spokesman. "We are aware that some bread lines not sold at Tesco are raising funds for this great cause and so we are making a further direct donation to offset this."
The spat with Tesco follows Premier's warning to the City in August that rocketing wheat costs currently up 55% on last year would force it to pass on price rises to retailers.
In an interim statement this week, CEO Robert Schofield said the company had managed to recover the sharp rise through "constructive" re-pricing discussions on its entire bread and flour range with leading retailers, countering input cost inflation.
According to BrandView.co.uk data, the average retail price for a Hovis loaf across the big four has risen 13% since early September, whereas arch rival Warburtons has kept prices flat over the past two months. At 88p, the price of a Hovis loaf in Tesco is still the same as it was in April, however, and lower than its 92p year-high in June.
With wheat prices set to rise even higher as Russia this week extended its grain export ban by another six months to 1 July, Warburtons marketing director Richard Hayes admitted it had followed Hovis in passing on the hikes.
Sales of Premier's Hovis business have held up well, increasing 9.5% in volume and 1.8% in value thanks to promotional activity and increased distribution.
No comments yet