Carrefour to halt Pepsi sales over price rises

Grocer Carrefour will stop selling Pepsi products in parts of Europe due to "unacceptable price increases".

The French supermarket put up signs in stores in France, Spain, Italy and Belgium on Thursday to inform customers of the decision, which will affect products such as Pepsi soda, Doritos and Quaker cereals.

Pepsi said it would continue to try to negotiate in "good faith".

The spat comes as food prices continue to rise uncomfortably quickly.

In France, the most recent report from the government statistics agency estimated that food prices rose 7.1% in December from a year earlier.

French Finance Minister Bruno Le Maire last year pushed major food companies to bring down prices, threatening special taxes on "undue" profits.

The government also moved up its deadline for price negotiations between food companies and supermarkets to this month in an effort to get a grip on the problem.

Pepsi has raised prices in recent years, pointing to rising costs. In October it said it expected further hikes in 2024.

The company has also been active in what critics describe as "shrinkflation" - reducing the size of packets for sale, but not dropping prices at the same rate.

Carrefour, France's second-largest grocer, has been one of the most prominent retailers to push back against the practice.

In September, it posted French supermarket puts up 'shrinkflation' signs on certain products, including Lipton Ice Tea, which is a Pepsi brand.

The new notes for Pepsi products, a picture of which the company shared on LinkedIn, say "we are no longer selling this brand due to unacceptable price increases".

Despite the price fight, French shoppers will still be able to buy Pepsi products that are currently on the shelves, the spokesperson told Reuters.

Pepsi said it had been in discussion with Carrefour for many months.

"We will continue to engage in good faith in order to try to ensure that our products are available," it said.

The public price dispute is unusual but not unprecedented.

In 2022, Tesco faced off with Kraft Heinz over price rises for staples such as baked beans, ketchup and tomato soup.

German grocers Edeka and Rewe also halted sales of certain products from the manufacturer Mars, citing price hikes.

Edeka also reported a dispute with Pepsi last year, while a standoff between Milka chocolate-maker Mondelez and Belgian supermarket Colruyt led to a gap in supply last year.