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Lavazza in talks with UK retailers as coffee bean prices soar

Coffee flows into a Lavazza cup at a coffee shop in Rome
Coffee flows into a Lavazza cup. Photo: Reuters/Max Rossi

Lavazza said on Thursday that it was in “constructive and open” discussions with UK retailers after the cost for its green beans had risen as much as 80% in a year.

The Italian coffee company warned that inflationary pressures were set to remain until at least the end of next year but that it was working hard to absorb costs instead of passing them onto customers.

The cost of a 1kg bag of Lavazza whole beans rose by around £2 over the last 14 to 16 months in UK supermarkets.

“We are all facing tough times,” Lavazza’s UK general manager Pietro Mazza told The Press Association (PA).

“The situation is troubling and will be for some time, so we need to keep the conversation with retailers as free and open as possible.”

Read more: Pound on track for biggest six-month drop since 2016

He highlighted that it was retailers who set the retail price of Lavazza products rather than the company itself.

He added: “It has been very tough in terms of supply – for green beans and for the components of our equipment. We have seen an 80% average increase in the cost of green beans in a year.”

The firm said instant coffee still made up more than 60% of the UK market, but sales of beans had grown 30% over the last three years.

It comes as US food giant Kraft Heinz has seen its products removed from Tesco (TSCO.L) shelves in a dispute over pricing.

Read more: UK economy dragged down by rail chaos

Tesco, which has an over 27% share of Britain's grocery market, apologised for the absence of popular Kraft Heinz products, such as baked beans and tomato ketchup, from its shelves but said: "We will not pass on unjustifiable price increases to our customers."

A spokesperson for Kraft Heinz said it was working closely with Tesco to resolve the situation as quickly as possible.

"We are confident of a positive resolution," they said.

Watch: How does inflation affect interest rates