PARIS — Carrefour will stop selling certain products, including Pepsi, Lay’s chips and 7up in four European countries, citing problematic price hikes. This decision marks a new chapter in the ongoing price disputes between retail chains and major international food companies, according to the Associated Press.
Starting Jan. 4, Carrefour stores in France, Italy, Spain and Belgium will display notices on PepsiCo product shelves, informing customers that the store will cease carrying these brands. The decision is attributed to “unacceptable price increases,” said a spokesperson for the French retail conglomerate.
Carrefour’s decision affects more than 9,000 stores in four countries, representing two-thirds of its worldwide presence, which totals 14,348 stores as per its 2022 annual report.
To combat inflation, the French government urged retailers and suppliers to conclude their annual price negotiations by January 2024. France stands out in Europe for its stringent regulation of the retail sector. The country mandates that supermarkets engage in yearly price negotiations with food and drink manufacturers, a policy aimed at supporting its agricultural sector, according to the AP.
However, the previous round of negotiations, conducted at the height of the inflation crisis early last year, resulted in widespread significant price hikes. The price hikes have affected supermarkets’ revenue, prompting them to seek price reductions in the current negotiation cycle, the AP noted.
This strategy mirrors actions taken by grocery retailers in various countries, including Germany and Belgium, who also have halted orders from consumer goods companies amid increasingly tense price negotiations exacerbated by inflation.
“We have been engaging in discussions with Carrefour for several months and will continue to negotiate in good faith, striving to ensure our products remain available,” said PepsiCo in a response to Reuters.
In an Oct. 10 conference call to discuss third-quarter financial results, Ramon L. Laguarta, chairman and chief executive officer of PepsiCo, spoke briefly about pricing. And although his comments were focused on the company’s operations in Latin America they speak to the challenges the Purchase, NY-based company faces across the world.
“We’ve been making, again, decisions around affordability, making sure that our brands continue to be within affordable price points to consumers,” Laguarta said. “We know that this possible income is limited and they make decisions a lot based on price points. So we’ve been reducing size, portion size of our products and making sure that we’re still very affordable.”