Carrefour sticks price warnings on food to shame suppliers (updated)

FDC

14/09/2023 12:35

(Adds Lindt comment)
    By Dominique Vidalon
       PARIS, Sept 14 (Reuters) - French supermarket chain
Carrefour  CARR.PA  has slapped price warnings on products from
Lindt chocolates to Lipton Ice Tea to pressure top consumer
goods suppliers Nestle, PepsiCo and Unilever to reduce inflation
ahead of much-anticipated contract talks.
    Carrefour is putting stickers on products that have shrunk
in size but cost more even after raw materials prices have
eased, to rally consumer support as retailers prepare to face
the world's biggest brands in negotiations due to start soon and
end by Oct. 15.
    "Obviously, the aim in stigmatising these products is to be
able to tell manufacturers to rethink their pricing policy,"
Stefen Bompais, director of client communications at Carrefour,
said in an interview.
    Carrefour CEO Alexandre Bompard, who also heads retail
industry lobby group FDC, has repeatedly said consumer goods
companies are not cooperating in efforts to cut the price of
thousands of staples despite a fall in the cost of raw
materials.
    In this he is backed by Finance Minister Bruno Le Maire, who
in June summoned 75 big retailers and consumer groups to his
ministry urging them to cut prices. After a new round of
meetings last month, Le Maire said Unilever, Nestle and PepsiCo
were among companies not toeing the line on prices.
    Since Monday, Carrefour has marked 26 products in its stores
in France with labels reading, "This product has seen its volume
or weight fall and the effective price by the supplier rise." 
    For example, Carrefour said a bottle of sugar-free
peach-flavoured Lipton Ice Tea, produced by PepsiCo, shrank to
1.25 litres (0.33 gallon) from 1.5 litres, resulting in a 40%
effective increase in the price per litre.
    Guigoz infant formula produced by Nestle went from 900 grams
(31.75 oz) to 830 grams, while Unilever's Viennetta ice-cream
cake shrank to 320 grams from 350 grams.
    Lindt's "chocolat au lait extra fin" was one of three of the
Swiss chocolatier's products named in the list.
    "Lindt & Sprüngli increased its prices group wide on average
by 9.3% in line with local cost structures," a company
spokesperson told Reuters. "We have made a concerted effort to
compensate for increased costs by increasing efficiency as much
as possible. Therefore, we have only passed on the costs we
could not absorb ourselves in the form of price increases to our
customers."
    PepsiCo did not respond to a request for comment. Nestle and
Unilever declined to comment.
    Consumer groups say "shrinkflation" is a widespread
practice, which supermarkets like Carrefour are also guilty of
in their private label products.
    France, like other European countries, has been trying for
months to ease consumer pain in the face of a surge in the cost
of living, strong-arming big business to freeze or cut food and
transport prices - with mixed results.
    The shrinkflation warnings are in all French Carrefour
stores, and will last until the targeted suppliers agree to
price cuts, Bompais said. The retailer could extend warnings to
other goods, but does not plan to extend the initiative to other
countries.
    Le Maire said last month consumer goods companies and
retailers had agreed to bring forward annual price negotiations
- which would normally have taken place next year - to
September. The talks will result in price cuts from January, he
said.

 (Reporting by Dominique Vidalon in Paris, Richa Naidu in
London; Writing by Helen Reid; Editing by Silvia Aloisi, Richard
Chang and David Evans)
 ((Helen.Reid@thomsonreuters.com; +44 7584 155 200 ;))