Tesco tells suppliers not to hike prices due to weak pound

The boss of Britain's biggest supermarket has called on big suppliers not to make UK shoppers pay for the weak pound just so that they can report a healthy bottom line.

Tesco chief executive Dave Lewis was speaking publicly for the first time since last month's "Marmitegate" row with Unilever when the consumer goods giant sought to lift the price of some popular goods.

Mr Lewis argued that global companies need not make increases because of the weak pound just so that profits could look good to investors.

He pointed out that global suppliers had long been able smooth out currency volatility in other countries when presenting results, by stripping out the impact of foreign exchange movements - a practice accepted by City investors.

Mr Lewis said: "The only thing we would ask of companies that are in that position is they don't ask UK customers to pay inflated prices in order that their reporting currency is maintained.

"They don't do that for countries outside the UK."

The pound has fallen around 16% against the US dollar since the Brexit vote, making imported goods more expensive.

Last month, Tesco briefly halted online sales of goods made by Unilever such as Marmite in a dispute over prices.

The two companies quickly reached an agreement, details of which have not been disclosed.

Mr Lever, who worker for Unilever for 28 years before joining Tesco, recognised that some suppliers were facing legitimate cost pressures.

He said this could be offset by changing recipes or finding cost savings but if not "we can accommodate that between ourselves and indeed our partners".

Last week, Sainsbury's boss Mike Coupe said multinational suppliers should take some of the hit from sterling's fall, arguing that their profitability was higher than that of the supermarkets.