North America, Trade/Markets/Prices

Agri-food analyst: The Frito-Lay Loblaws potato chips war ‘is just the tip of the iceberg’

“We recently learned that Frito-Lay, a brand owned by giant PepsiCo Canada, stopped selling to Loblaws after the retailer refused requests by Frito-Lay to increase their prices,” writes Dr. Sylvain Charlebois in an article published by Troy Media.

Charlebois writes that food manufacturers, when selling products to grocers, suggest retail prices. With low profit margins, labour shortages, packaging issues and supply-chain woes, inflation has been violently disruptive to manufacturers.

“It’s not the first time this has happened,” Charlebois says. “But the scale of this stop-sell is unprecedented, and the manoeuvre by PepsiCo tells us that food manufacturers in Canada have had enough of grocers changing the rules to their advantage.”

“The rift between PepsiCo and Loblaws is long overdue. And make no mistake: many other manufacturers and grocers are involved in similar tug-of-war disputes. It’s happening in dairy and bakery, so many food categories are impacted by this. Reporters just happened to learn about the PepsiCo instance, likely because someone wanted the public to know.

“Canadians may be puzzled by the news. Why would Loblaws be blamed for keeping prices lower for consumers?”

Source: Troy Media. Read the full article here
Photo: Courtesy Narcity
The Author: Dr. Sylvain Charlebois is senior director of the agri-food analytics lab and a professor in food distribution and policy at Dalhousie University.

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