Carrefour pulls PepsiCo products over price hikes

Carrefour (CARR.PA) is telling customers in four European countries it will no longer sell products like Pepsi, Lay’s crisps and 7up because they have become too costly, in the latest tug-of-war over prices between retailers and global food giants.

From Thursday, shelves for PepsiCo (PEP.O) products at Carrefour stores in France, Italy, Spain and Belgium will carry signs saying the store will no longer be stocking the brands “due to unacceptable price increases”, a spokesperson for the French supermarket giant said.

Some PepsiCo products like Cheetos and 7Up were not available at a Carrefour supermarket in the Paris suburb of Auteuil on Thursday, while others like Pepsi were still on shelves, next to the sign.

At a Carrefour supermarket in Paris’ posh 16th district, customers broadly cheered the move.

“It doesn’t surprise me at all,” shopper Edith Carpentier told Reuters. “I think there will be lots of products left on the shelves because they have become too expensive, and they are all things we can avoid buying.”

PepsiCo did not respond to a request for comment.

The US company said in October it planned “modest” price increases this year as demand held up despite rises, leading it to hike its 2023 profit forecast for a third straight time.

Over the past year, grocery retailers in several countries including Germany and Belgium announced they had stopped orders from consumer goods firms due to price rises, a tactic in price negotiations that have become more fraught due to inflation.

Carrefour has been one of the most active retailers to challenge big consumer products and food companies over prices.

Last year, it started a “shrinkflation” campaign of sticking warnings on products that have shrunk in size but cost more.

In its efforts to lower inflation, the French government has asked retailers and suppliers to wrap up annual price negotiations in January, two months sooner than usual.

France is unusual in Europe in that it strongly regulates the retail sector, forcing supermarkets to negotiate prices only once a year with food and drink producers, in an attempt to protect its farm industry.

But the last negotiation round early last year, at the peak of the inflation crisis, locked in very high price increases across the board, which has hit turnover at supermarkets and made them keen to negotiate price cuts this time round.

“The French supermarkets, we know, are very, very ready to delist people if they don’t like the deals that they get,” said James Walton, chief economist at the Institute of Grocery Distribution.

“Obviously that’s a last resort, because nobody wins if the goods that people want are not available on the shelves.”