Carrefour says it will not sell PepsiCo goods due to price hikes

By Piotr Lipinski

PARIS (Reuters) - Carrefour is telling customers it will no longer sell PepsiCo products like Pepsi, Lay's crisps and 7up because they had become too costly, in the latest tug-of-war over prices between retailers and global food giants.

From Thursday, shelves with PepsiCo products at Carrefour stores in France will be accompanied by a note saying "We are no longer selling this brand due to unacceptable price increases," a spokesperson for the French retailer said.

PepsiCo did not respond to a request for comment.

The U.S. company said in October it planned "modest" price hikes this year as demand held up despite rises, leading it to hike its 2023 profit forecast for a third straight time.

Over the past year, grocery retailers in several countries including Germany and Belgium have announced they stopped orders from consumer goods firms due to price rises, a tactic in price negotiations that have become more fraught due to inflation.

It is unclear whether PepsiCo products already on Carrefour shelves will be withdrawn, the spokesperson said, adding it cannot stop shoppers from buying those on display.

The signs would only be put up in Carrefour's stores in France, the spokesperson said, confirming local media reports.

Carrefour has been one of the most active retailers to challenge big consumer products and food companies over prices.

Last year, it started a "shrinkflation" campaign of sticking warnings on products that have shrunk in size but cost more. The spokesperson could not immediately confirm on Thursday if this was still the case.

In its efforts to bring down inflation, the French government has asked retailers and suppliers to wrap up annual price negotiations in January, two months sooner than usual.

A preliminary reading from the INSEE statistics office on Thursday showed consumer prices in France rose 4.1% year-on-year in December, with yearly food inflation slowing down to 7.1% from 7.7% the month earlier.

France's finance minister has previously threatened to claw back what he described as "undue" profits from food companies with special taxes if they did not pass on their own lower costs to consumers already struggling with high energy bills.

(Reporting by Piotr Lipinski, additional reporting by Helen Reid, editing by Tassilo Hummel and Alexander Smith)