Carrefour removes PepsiCo products in price dispute

France’s Carrefour SA has pulled PepsiCo Inc. snacks and soft drinks from store shelves due to recent price increases in the latest flare-up of a clash between retailers and food companies amid a squeeze on consumer spending power.

Since Thursday, the chain has removed PepsiCo products such as soft drinks and Doritos chips from supermarkets in France, replacing them with a note saying the US food company’s price hikes are “unacceptable,” a spokeswoman said.

The move comes as French grocers and large food producers wrangle over annual price negotiations, and as retailers across Europe face continuing pressure to hold down prices.

Though inflation has eased somewhat from last year’s peak levels, grocers have seen margins squeezed as they try to prevent shoppers from defecting to discounters Lidl and Aldi.

PepsiCo has been “in discussion with Carrefour for many months,” according to a spokesperson. “We will continue to engage in good faith in order to try to ensure that our products are available.” Last October, the company said its price increases would be roughly in line with inflation.

Carrefour shares have risen 0.9 percent so far this year, with PepsiCo up 1 percent.

The French company last year began calling out food suppliers over the practice of reducing package sizes while maintaining prices, applying “shrinkflation labels to certain products.

Pulling Products

Supermarkets have occasionally resorted to the more aggressive step of dropping products amid heated price disputes — notably when UK grocer Tesco Plc removed Unilever Plc’s Marmite spread from shelves in 2016.

In a more recent price dispute in 2022, Mars Inc. stopped supplying two of its pet food brands to Tesco, while Kraft Heinz Co. withheld ketchup and baked beans. A separate dispute between Germany’s Edeka and Kellogg’s resulted in halted cereal shipments to that chain last year.

Food prices have come under intense scrutiny across Europe over the past year as consumers have been squeezed by one of the biggest cost-of-living crises in decades.

Supermarket chains have argued that their profit margins are razor thin, leaving no option other than to pass along suppliers’ price increases to consumers. Big food companies, meanwhile, have sought sales growth from price increases as volumes stagnate.

A probe by the UK’s Competition and Markets Authority last year largely cleared grocers of profiteering.

France is one of Europe’s most competitive grocery markets, and Carrefour competes with the Leclerc, Auchan, Casino, Intermarche and Super U groups, as well as the German discount chains.