2024-01-05 21:12:45
The business conflict between Carrefour, one of the main European distributors, and Pepsico, the manufacturer of products such as Pepsi, Lay’s, Alvalle or 7Up, is going to make the leap to Spain after the company announced this week that they would stop marketing all these brands in their establishments alleging “unacceptable increases” in prices.
The French hypermarket, supermarket and local store company had announced this measure in France in response to a price increase that it considers unaffordable for customers. In fact, it had already begun to install signs on its shelves warning of shortages of all these products when they ran out in the coming days. But now, Carrefour has taken a further step in its strategy and has announced that “starting Thursday, the shelves of PepsiCo products in Carrefour stores in France, Italy, Spain and Belgium will be provided with signs indicating that the store will stop to sell these brands due to unacceptable price increases,” a spokesperson for the French distribution chain explained to Reuters this Friday, EP reports.
For its part, Pepsico clarified yesterday that it has been negotiating for “many months” and that its desire is to continue “dialogue in good faith to try to guarantee the availability” of the products.
Notices with posters
If you stick to your idea, Carrefour customers will see in the coming days those posters that are already in their commercial network in France in which they are informed of this decision: “We no longer sell this brand due to unacceptable price increases.” they say. What Carrefour has not clarified for now is whether the products of these brands that it now has for sale will be withdrawn or not replaced once they are sold out.
What actually lies behind this clash are the crude negotiations that both the distributor and the manufacturer have to undertake the marketing conditions of these products during 2024 on their shelves and shelves. It is a tug of war that all brands develop annually, although in this case the tension has skyrocketed.
Trading strategy
Various sources in the sector consulted by this newspaper point out that removing products from shelves as a method of pressure is not a frequent practice, but it has precedents. For example, in 2010 Alcampo and other supermarkets decided to stop selling Leche Pascual products, because the company demanded very high prices.
Now, Carrefour’s veto of the entire Pepsico range lands in Spain, a country in which the legislation is much more severe than in other markets such as France in terms of competitiveness. The sources consulted explain that the calls “of one against another” or “boycotts” can be considered illegal according to the Law on Defense of Competition in force.
The measure adopted by the supermarket chain affects more than 9,000 stores in the four countries in which this measure will be adopted. PepsiCo already warned last October that it planned “modest” price increases this year for its products, which include Pepsi, Lipton, 7up soft drinks, Alvalle gazpachos, Lay’s snacks, Cheetos and Doritos and Quaker cereals. This multinational revised its revenue forecasts upwards three times in 2023 thanks to price increases that did not affect demand. Carrefour already included warnings on Lindt or Lipton products last year due to prices.
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