John Bason told Reuters this showed AB Foods, whose grocery brands includes Twinings tea, Jordans cereals and Ovaltine drinks, was not using inflation as an excuse to hike prices more than necessary.
On Sunday, John Allan, the chairman of Britain's biggest supermarket group, Tesco, told BBC television some food companies had pushed for illegitimate price rises - comments that baffled the head of the country's farmers union and food industry groups.
Bason declined to comment on Allan's comments directly, but said: "The measure of that is our margin. I've guided to the fact that our margin is going to go down in grocery."
"Are we recovering all of our (cost) inflation, clearly not. It's as simple as that."
Bason was talking after AB Foods updated on the Christmas quarter.
(Reporting by James Davey; Editing by Sachin Ravikumar)