Carrefour is taking its spat with PepsiCo up a notch. No longer content to, as it did in the fall, label PepsiCo’s examples of “shrinkflation,” a nasty variant of inflation where the bag gets emptier while the price remains the same, or even increases, now the French grocery giant is doubling down. Starting Thursday with in-store signs that cite “unacceptable price increases,” the supermarket chain is telling shoppers in four countries that it will no longer carry PepsiCo products.
The changes start this week in France, Italy, Spain, and Belgium, meaning Cheetos, Doritos, and Quaker cereals will suddenly be harder to find there.
But this is just the latest clash between the two behemoths. In September, Carrefour started labeling egregious examples of shrinkflation on its shelves, with PepsiCo a prominent target. The labels read: “This product has seen its volume or weight fall and the effective price from the supplier rise.”
James Walton, chief economist at the Institute of Grocery Distribution, calls delisting a “last resort,” telling Reuters that “nobody wins if the goods that people want are not available on the shelves.”
But Carrefour has on its side European governments, which have been pressuring big companies to lower prices in the battle against inflation.
Carrefour CEO Alexandre Bompard argued last year that consumer goods companies were not cooperating with efforts to cut prices, despite the cost of raw materials falling. French finance minister Bruno Le Maire agreed, pointing a finger at PepsiCo, Unilever, and Nestlé, in particular.
“I don’t see why when prices go up companies pass on the increase immediately, but when the price of wheat falls, the price of pasta takes three months to fall. It’s unacceptable,” Le Maire said last April, warning, “I will use all the powers at my disposal to ensure that the big industrial companies pass on the decrease.”
France’s government has asked retailers and suppliers to finish their yearly price negotiations in January, a few months sooner than usual, Reuters reported. France is unusual in that it protects its farmers by forcing supermarkets to negotiate prices only once a year, and last year prices got locked in amid high inflation.
The shrinkflation campaign aimed to make suppliers rethink their pricing policies, but, judging by Carrefour’s move this week, it fell short with PepsiCo. And Carrefour isn’t the only supermarket chain taking a stand in Europe. Its Belgian rival Colruyt said that price disputes spurred it to stop supplies from Mondelez—the maker of Oreos and Philadelphia cream cheese. As Reuters reported, the grocer noted that with energy and raw material prices falling, rate hikes were no longer justifiable.
This story was originally featured on Fortune.com
Source: finance.yahoo.com