Carrefour sticks price warnings on food to shame suppliers
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A sign that says "Anti-inflation challenge, third price cut" at a Carrefour supermarket in Montesson near Paris.
PHOTO: REUTERS
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PARIS – French supermarket chain Carrefour 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 that are 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,” Mr Stefen Bompais, director of client communications at Carrefour, said in an interview.
Carrefour chief executive Alexandre Bompard, who also heads the retail industry lobby group known as FCD, has repeatedly said consumer goods companies are not cooperating in efforts to cut the prices of thousands of staples despite a fall in the cost of raw materials.
He is backed in this by French Finance Minister Bruno Le Maire, who in June summoned 75 big retailers as well as consumer groups to his ministry and urged them to cut prices.
After a new round of meetings in August, Mr 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 saying: “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 from 1.5 litres, resulting in a 40 per cent effective increase in the price per litre.
Guigoz infant formula produced by Nestle went from 900g to 830g, while a Viennetta ice cream cake, produced by Unilever, shrank to 320g from 350g previously.
Lindt and 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 businesses to freeze or cut food and transport prices – with mixed results so far.
But Carrefour’s move to name and shame suppliers marks an escalation in the war of words between retailers and big multinationals.
Carrefour is putting stickers on products that have shrunk in size but cost more, even after raw materials prices have eased.
PHOTO: REUTERS
The shrinkflation warnings are in all French Carrefour stores, and will last until the targeted suppliers agree to price cuts, Mr Bompais said. The retailer could extend the warnings to other goods, but does not plan to extend the initiative to other countries.
Mr Le Maire said in August that consumer goods companies and retailers had agreed to bring forward annual price negotiations – which would normally have taken place in 2024 – to September. The talks will result in price cuts from next January, he added. REUTERS
