PARIS (AP) — Global supermarket chain Carrefour will stop selling PepsiCo products at its stores in France, Belgium, Spain and Italy because of price increases on popular items such as Lay's potato chips, Quaker Oats, Lipton tea and its namesake lemonade.
The French grocery chain said it pulled PepsiCo products from shelves in France on Thursday and posted small signs in stores saying: “We no longer sell this brand due to unacceptable price increases.”
A new French law aimed at tackling the rising cost of living will see supermarkets face millions in fines if they fail to reach an agreement with suppliers on prices by the end of the month.
The ban will also extend to Belgium, Spain and Italy, but Carrefour, which has 12,225 stores in more than 30 countries, has not said when it will come into force in those three countries.
PepsiCo products were still on shelves in Rome and Barcelona on Friday. Carrefour Italia's press office said that information for customers in its stores in Italy will be published in the next few days.
PepsiCo said in a statement that it “has been in discussions with Carrefour for many months and we will continue to work in good faith to ensure our products are available.”
The company behind Cheetos, Mountain Dew and Rice-A-Roni has raised prices by double-digit percentages for seven quarters in a row, most recently by 11% in the July-September period.
Profits have risen, but higher prices have depressed sales as people move to cheaper stores. PepsiCo also said it has reduced package sizes to meet consumer demand for convenience and portion control.
“I think what we're seeing is that the consumer is more selective right now,” Hugh Johnston, PepsiCo's chief financial officer, told investors in October.
The Purchase, New York-based company said price increases should ease and largely align with inflation, which has fallen significantly worldwide since supply chains collapsed during the COVID-19 pandemic and then Russia's war in Ukraine has driven up prices.
However, consumer prices in the 20 European Union countries that use the euro rose to 2.9% in December from a year earlier, recovering from seven straight monthly declines, according to figures released on Friday.
Prices for food and non-alcoholic drinks fell a painful 17.5% in the 20-nation euro zone in March, but were still 6.9% higher in November than a year earlier.
French President Emmanuel Macron's government has pushed back against rising household living costs, passing a law in November to implement “emergency measures” to combat high prices.
The law postponed annual negotiations between supermarkets and their suppliers over setting prices and more from March 1 to January 31. Fines for food companies that fail to meet the new price-setting deadline have been increased to 5 million euros ($5.46 million).
In the U.S., several grocery sellers, including Walmart, have expressed displeasure with consumer goods makers' moves to keep pushing up prices even as overall inflation has fallen. Packaged food and household goods have been particularly problematic, with price increases having eased in recent months.
Walmart CEO Doug McMillon told analysts in May: “We all need these prices to come down.”
Stew Leonard Jr., president and CEO of Stew Leonard's, a supermarket chain with stores in Connecticut, New York and New Jersey, told The Associated Press in July that he had warned major consumer goods makers that he would not accept further price increases because he believed customers had reached a tipping point. But Leonard noted Friday that price increases had eased, except for meat.
“It’s hard to justify a price increase when overall costs are going down,” Leonard added.
For its part, PepsiCo has pointed to higher costs of grains and cooking oil for its rising prices. The cost of these foods rose sharply after Russia's invasion of Ukraine, but fell significantly in global markets last year from record highs in 2022.
The United Nations Food and Agriculture Organization said Friday that its food price index was 13.7% lower in 2023 than a year earlier, but its measures of sugar and rice prices rose over the period. Families are still not feeling this general relief in supermarkets.
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Associated Press reporter Frances D'Emilio in Rome and AP Retail writer Anne D'Innocenzio in New York contributed to this report.