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Carrefour Ceases Sales of PepsiCo Products in Four European Countries Due to Price Disputes

PARIS ÔÇö CarrefourÔÇÖs announcement to discontinue the sale of certain products, such as Pepsi, LayÔÇÖs chips, and 7up, in four European countries due to price increases has sparked a new round of tension in the ongoing battle between retail chains and major international food companies, as reported by the Associated Press.

Starting Jan. 4, Carrefour stores in France, Italy, Spain and Belgium will showcase notices on PepsiCo product shelves, notifying customers of the storeÔÇÖs decision to stop carrying these brands. The decision comes as a result of what the French retail conglomerate deems ÔÇ£unacceptable price increases,ÔÇØ according to a spokesperson.

CarrefourÔÇÖs choice will affect over 9,000 stores in the four countries, making up two-thirds of its total worldwide presence, which stands at 14,348 stores according to its 2022 annual report.

Amidst efforts to combat inflation, the French government has urged retailers and suppliers to finalize their annual price negotiations by January 2024. France is distinct in Europe for its rigorous regulation of the retail sector, mandating that supermarkets engage in yearly price talks with food and drink manufacturers, an initiative aimed at bolstering its agricultural sector, per the AP.

Despite the strict regulations, the previous round of negotiations, which took place during the peak of the inflation crisis early last year, resulted in widespread and significant price increases. The impact of these price hikes has affected the revenue of supermarkets, leading them to seek price reductions in the current negotiation cycle, notes the AP.

This move mirrors actions taken by grocery retailers in various countries, including Germany and Belgium, who have similarly halted orders from consumer goods companies among increasingly tense price negotiations aggravated by inflation.

In response to the decision, PepsiCo stated, ÔÇ£We have been engaging in discussions with Carrefour for several months and will continue to negotiate in good faith, striving to ensure our products remain available,ÔÇØ in a statement to Reuters.

During an Oct. 10 conference call to discuss third-quarter financial results, Ramon L. Laguarta, chairman and chief executive officer of PepsiCo, briefly discussed pricing. Although his comments were focused on the companyÔÇÖs operations in Latin America, they reflect the challenges the Purchase, NY-based company faces globally.

ÔÇ£WeÔÇÖve been making, again, decisions around affordability, making sure that our brands continue to be within affordable price points to consumers,ÔÇØ Laguarta mentioned. ÔÇ£We know that this possible income is limited and they make decisions a lot based on price points. So weÔÇÖve been reducing size, portion size of our products and making sure that weÔÇÖre still very affordable.ÔÇØ

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