The World Briefly

January 08, 2024

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France

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Global supermarket chain Carrefour will stop selling PepsiCo products in some of its European stores in protest over price increases for some popular items, such as Lay’s potato chips and Lipton tea, the Associated Press reported.

The French multinational, one of the largest supermarket chains in the world, removed PepsiCo items from shelves in France, adding a sign saying they will “no longer sell this brand due to unacceptable price increase.” The ban will also extend to Belgium, Italy and Spain. The grocery chain has not specified when it would take effect.

The move follows a new law in France aimed at fighting inflation. Under the law, supermarkets and their suppliers have to reach a deal on prices by Jan. 31. Failure to do so will incur fines of more than $5 million for grocery companies that do not meet the new deadline for setting prices.

Lawmakers are concerned that inflation is being fueled by price gouging, or “greedflation”, and is hurting French consumers already struggling with the surging cost of living over the past few years.

Retailers in the United States have also battled with suppliers to lower food prices, the Washington Post noted.

Following Carrefour’s decision, PepsiCo said it had been in discussions with the supermarket chain for months and “will continue to engage in good faith in order to try to ensure that our products are available.”

PepsiCo, known for brands like Cheetos and Mountain Dew, has implemented double-digit price increases for seven consecutive quarters, with the most recent hike coming in at 11 percent from July to September 2023. While the company’s profits have risen, sales have been impacted as consumers opt for cheaper alternatives.

The company predicts that price increases will ease and align more closely with the overall decrease in global inflation, attributed to improved supply chains post-Covid-19 and a decline in prices following Russia’s war in Ukraine.

However, recent data for the 20 European Union countries using the Euro currency indicates a rebound in consumer prices, rising to 2.9 percent in December from the previous year – following seven consecutive monthly declines.

The United Nations Food and Agriculture Organization reported this week a 13.7 percent decrease in its food price index for 2023 compared with the previous year. But despite this overall decline, families are not experiencing relief at supermarkets, especially considering the rise in sugar and rice prices during the same period.

This story originally appeared in the January 08, 2024 newsletter, Cops & Robbers.