Pepsi Removed from European Supermarkets due to Hike in Prices

Carrefour, one of France's largest supermarket chains, has announced that it will no longer carry PepsiCo products due to rising costs, sparking another dispute between retailers and suppliers over pricing. The stores will display a note next to Pepsi, 7up, and Lays chips, stating that the brand is no longer available due to unacceptable price increases. We apologize for any inconvenience caused," CNN affiliate BFM-TV reported.

CNN has contacted Carrefour and PepsiCo (PEP) for comment.

BFM-TV reported Thursday that Carrefour would pull PepsiCo products from stores in Italy, Spain, and Belgium, as well.

Carrefour's latest move signals an increase in efforts to compel major consumer goods companies to reduce prices that had been raised over the past two years due to rising energy, commodity, and labor costs. Reuters revealed in September that the supermarket chain had initiated a "shrinkflation" campaign by labeling products like Lindt chocolates and Lipton Ice Tea with warnings that they had decreased in size but were still priced higher, despite the fact that raw material costs had decreased.

Carrefour CEO Alexandre Bompard has voiced frustration over the lack of cooperation from consumer goods companies in reducing prices on staple items, despite lower raw material costs, as reported by Reuters. On the other hand, PepsiCo CEO Ramon L. Laguarta predicted "higher inflation" during an earnings call in October, indicating that prices are expected to remain high for the year.

In December, preliminary data revealed that inflation in France increased to 4.1%, up from 3.9% in November. However, food inflation dropped from 7.7% to 7.1%, as reported by the country's statistics agency.

A Carrefour supermarket in Montesson near Paris on September 13, 2023. Carrefour has been critical of price increases by consumer goods companies.

Sarah Meyssonnier/Reuters

Nestlé, Unilever (UL), Coca-Cola (KO) and Procter & Gamble (PG) have increased prices on their products in the last two years, passing on their rising costs to customers. This has resulted in strained discussions and occasional disagreements between retailers and the consumer goods companies, leading to temporary removal of branded products from shelves.

In 2022, during negotiations, Kraft Heinz (KHC) ceased supplying certain products to Tesco, including ketchup and baked beans. Tesco deemed the price increases by the company as unacceptable. Following the restoration of the products, price increases were removed from Heinz's top-selling lines.

In addition to this, sharp price increases have caused consumers to turn to retailers' own brands, also known as private-label products. Last February, Carrefour's Bompard announced plans to "substantially increase" the percentage of its private labels, aiming to reach 40% of sales within the next three years.