2024-01-05 15:38:09
Shock formulas, public denunciation of the prices requested by suppliers: like Carrefour removing crisps and other PepsiCo products from its shelves, the entire sector is showing its muscles at the start of January while the commercial negotiations with agro-industrialists must end within a few weeks.
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French hypermarkets and supermarkets all united once morest the high cost of living? Blaming excessively high prices, Carrefour in any case banned crisps and other PepsiCo-branded products from its shelves on Thursday January 4. Since then, the rebellion has spread throughout the sector, a few weeks before the end of commercial negotiations with agro-industrialists.
Lay’s or Doritos chips, Quaker cereals, Pepsi or 7Up sodas, Lipton sweet tea… “We no longer sell this brand due to unacceptable price increases”, assured, Thursday, the food distribution giant Carrefour, in the shelves of its supermarkets in France.
“Discussions with Carrefour have been taking place for many months and we will continue to do so in good faith to ensure that our products are available,” responded a PepsiCo spokesperson, without further commenting on the current negotiations.
For distribution specialist Oliver Dauvers, who first revealed the initiative, the approach is “in the same idea” as the declaration, a few days earlier, of the media representative of E.Leclerc, Michel-Edouard Leclerc , which made a point of “busting out inflation” in the context of negotiations with its industrial suppliers.
It is a balance of power which will pit supermarkets and hypermarkets once morest the largest manufacturers until the end of January, within the framework of these annual commercial negotiations, which determine the conditions of sale (purchase price, place in department, promotional calendar, etc.) of a large part of the products sold in supermarkets.
The government has brought forward the end of negotiations by a few weeks – January 15 for the smallest suppliers -, hoping that reductions in the costs of certain raw materials, for example wheat or oil, will be reflected more quickly on the shelves.
“Put pressure on the industrialist”
But large stores say they mainly receive requests for price increases, and PepsiCo’s great rival, Coca-Cola, said in November in Le Parisien that it was demanding an average increase of 7%.
“Please note, this does not mean that our products will increase by the same amount, since we will negotiate this figure with mass distribution,” explained the boss of Coca-Cola Europacific Partners France, François Gay-Bellile. “Then, each distributor will be free to make more or less margin on this or that product, before setting the final price.”
In any case, “it’s rare for the distributor to take consumers and its customers to task”, observes one of Carrefour’s French competitors, on condition of anonymity. “It’s a way of putting pressure on the manufacturer and showing the consumer that the brand is engaged in the fight to defend purchasing power, it’s fair game.”
A few months earlier, Intermarché, the 3rd player in the sector behind E.Leclerc and Carrefour, had tried it in a humorous tone, criticizing the manufacturer of Petit Marseillais soap for being “fad”, or frozen Findus products for throwing away “a cold” with requests deemed unreasonable. The campaign is no longer running.
“Boxing gloves”
As for delisting, several brands have already practiced it. The boss of Système U, Dominique Schelcher, was questioned in March by the specialist magazine LSA regarding possible major brands being ruled out, and he replied: “Pepsi. Not just sodas, but also chips. The blow is off. “
Carrefour is not the only player in the sector to raise eyebrows over the American multinational’s pricing demands.
Michel-Edouard Leclerc explained, Thursday, on France Info, that the brand he represents practiced dereferencing – Ricard, for example, generally disappeared from its shelves in mid-2023 -, but that “this is not never a winning game.” “Consumers don’t want to pay a lot but if they don’t have their products, they are not happy and go to the competitor.”
“I think that we will arrive with very tough negotiations, with boxing gloves, to bring regarding price reductions, but we have to go and get them,” he declared once more.
And everything seems to be allowed, while the price of shopping baskets has increased by an average of 20% over the last two years.
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