Carrefour, a prominent supermarket chain, has extended a boycott on PepsiCo products to Spain, Italy, and Belgium in a dispute over price increases. The decision comes after Carrefour started putting up banners in its France stores informing customers about the removal of PepsiCo snacks and drinks due to “unacceptable price increases”.
The boycott includes brands such as Lay’s and Doritos snacks, 7Up, and Pepsi beverages. Europe is PepsiCo’s largest revenue-generating market, with the US food heavyweight contributing $12.7bn in revenue from the region in its 2022 fiscal year.
As a result, the boycott is expected to have an impact on sales in Europe in the new year. Meanwhile, Carrefour’s move has been met with support from another French supermarket giant, E. Leclerc, which is also pressuring suppliers to lower prices.
As per preliminary figures from the national statistics agency in France, food inflation continues to exceed average prices in the broader economy. This has prompted E. Leclerc’s president, Michel-Edouard Leclerc, to voice his concern on LinkedIn about the ongoing price negotiations and the need for suppliers to lower prices.
Carrefour isn’t the only supermarket to take action. In September, the company launched a ‘shrinkflation’ campaign in France to challenge suppliers, including PepsiCo, over reducing pack sizes without reducing prices. Similarly, French authorities have applied to the EU to force grocers to inform consumers about any reduction in the product size without a corresponding price decrease.
In Italy, a three-month inflation-tackling agreement reached in September between the government and consumer-goods suppliers, including food producers, concluded last month. This was aimed at controlling prices and providing relief to consumers during the Christmas period.
It remains to be seen what new measures the Italian and Spanish governments may take in 2024 to manage inflation pressures. As such, it is essential for food and beverage industry players to stay updated with these developments.