Carrefour, a major French retailer, has declared that it will cease the sale of PepsiCo products, including popular items like Pepsi, Lay’s crisps, and 7up.

The reason cited for this decision is the perceived excessive cost of these goods. This move is indicative of an ongoing struggle between retailers and global food giants regarding pricing dynamics.

Starting from Thursday, Carrefour stores in France will display shelves once stocked with PepsiCo products accompanied by a notice explaining the discontinuation.

The note states, “We are no longer selling this brand due to unacceptable price increases.” Despite requests for comment, PepsiCo has not responded to queries regarding this development.

PepsiCo had previously announced plans in October to implement “modest” price increases in the current year.

This decision was made despite sustained demand, leading the company to revise its 2023 profit forecast positively for the third consecutive time.

The current situation reflects a broader trend, with grocery retailers in various countries, such as Germany and Belgium, announcing a cessation of orders from consumer goods firms in response to rising prices.

This tactic in price negotiations has become more prevalent amid the challenges posed by inflation.

The fate of existing PepsiCo products on Carrefour’s shelves remains uncertain. The spokesperson clarified that while the company cannot prevent customers from purchasing the displayed products, new stocks will not be replenished.

This change will be specific to Carrefour’s stores in France, according to the spokesperson, corroborating reports from local media.

Carrefour has gained a reputation for actively challenging major consumer products and food companies over pricing issues.

In the previous year, the retailer initiated a “shrinkflation” campaign, wherein warnings were affixed to products that had decreased in size while their prices increased.

The spokesperson could not confirm on Thursday whether this campaign is still in effect.

The French government, in its efforts to combat inflation, has urged retailers and suppliers to conclude annual price negotiations by January, two months earlier than the usual timeline.

A preliminary reading from the INSEE statistics office on Thursday revealed a 4.1% year-on-year increase in consumer prices in France for December.

The yearly food inflation, while still high at 7.1%, exhibited a slight slowdown from 7.7% in the previous month.

France’s finance minister has previously issued warnings of imposing special taxes on food companies if they fail to pass on their lower costs to consumers, especially those already grappling with elevated energy bills.

This threat underscores the government’s determination to address what is perceived as “undue” profits within the food industry.

Last Updated: 05 January 2024