Rakusen’s, one of Britain’s biggest kosher food producers, will no longer supply its products to Tesco supermarkets following a pricing dispute.

The Leeds-based company’s products — including matzah, soups and biscuits — will not be available after current stocks runs out.

Rakusen’s said it had taken the decision following discussions over margins and supply prices. It reached the conclusion, a spokeswoman said, that “Tesco thinks it rules the world, but we are standing up for ourselves, and said no.”

It is thought Tesco, which this week announced its pre-tax profits for the six months up to the end of August of £1.4billion, will replace Rakusen’s products with items imported from America and Israel.

The Rakusen’s spokeswoman said: “We have pulled out because Tesco are hammering people all the time over prices. It’s just not viable to stock goods there any more.”

Tesco are hammering people over prices - that’s why

Its goods will remain on sale at other supermarkets, including Sainsbury’s, Morrisons, Asda and Waitrose.

A Tesco spokeswoman said: “We aim to keep prices down for customers and offer the best possible value. We are not currently stocking Rakusen’s products but we remain open to dialogue with the company.

“Tesco is of course committed to offering a great kosher range and great value for customers.”

Norman Bookbinder, of Great Food, which produces the Gilbert’s kosher range, said his company would be providing a new range at Tesco early next year.

He said: “We have had great experiences with Tesco over the past year and in February there will be a magnificent range of new kosher foods. “We have been working very closely with them. We do not lie down and die for each other. We negotiate in an atmosphere of give and take.”

But Richard Hyman, owner of the Titanics kosher store in Manchester, said he was sympathetic with the position Rakusen’s had been put in.

“Tesco should appreciate that smaller businesses are also allowed to make a profit. A point comes where you have to turn round to the supermarket and say ‘this is just not viable’. It has to be a two-way street.

“Do people want American matzah at a cheaper price?

“I don’t know. It’s not going to be the same as Rakusen’s.”