Pepsi Pulled from Supermarket Shelves in Europe Over Price Increases

In a bold move reflecting the ongoing clash between retailers and suppliers over rising prices, Carrefour, one of France’s largest supermarket chains, has decided to cease selling PepsiCo products due to perceived cost escalation. The decision is expected to impact stores not only in France but also in Italy, Spain, and Belgium.

Customers visiting Carrefour stores will encounter a note displayed alongside Pepsi, 7up, Lay’s chips, and other PepsiCo products, explaining the discontinuation: “We are no longer selling this brand due to unacceptable price increases. We apologize for any inconvenience caused,” as reported by CNN affiliate BFM-TV.

This escalation comes as part of Carrefour’s ongoing efforts to exert pressure on major consumer goods companies to lower their prices. The supermarket chain had initiated a “shrinkflation” campaign earlier, warning consumers about reduced product sizes accompanied by increased prices, even as raw material costs eased.

Carrefour CEO Alexandre Bompard has been vocal about the lack of cooperation from consumer goods companies in reducing prices, despite a decrease in raw material costs. The move against PepsiCo is a culmination of the supermarket chain’s strategy to challenge price hikes implemented by major corporations.

PepsiCo CEO Ramon L. Laguarta, however, had mentioned in an earnings call in October that the company anticipated “higher inflation” in its business, signaling the likelihood of sustained elevated prices throughout the year.

The decision by Carrefour to remove PepsiCo products follows a broader trend in the industry, where companies like Nestlé, Unilever, Coca-Cola, and Procter & Gamble have all raised prices in response to increased costs, passing on the burden to consumers. Such actions have led to tense negotiations between retailers and consumer goods giants, sometimes resulting in branded products being temporarily removed from shelves.

In 2022, similar disputes occurred, with Kraft Heinz temporarily halting supplies to Tesco, the largest UK grocery retailer, due to what Tesco deemed “unjustifiable” price increases. Eventually, a resolution was reached, and price rises were withdrawn on Heinz’s popular product lines.

The current scenario of steep price hikes has also driven consumers towards retailers’ own brands, known as private-label products. Carrefour’s CEO, Bompard, had previously announced plans to significantly increase the share of private labels to reach 40% of sales over the next three years. As the retail landscape continues to navigate these challenges, the industry is witnessing a complex interplay between retailers and suppliers in response to economic pressures and inflation concerns.