French supermarket chain Carrefour has slapped price warnings on goods from Lindt chocolates to Lipton Ice Tea to pressure top suppliers to limit so-called "shrinkflation" – reducing the size of products while maintaining or increasing their price.
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 from 1.5 litres, resulting in a 40 percent effective increase in the price per litre.
Guigoz infant formula produced by Nestle went from 900 grams to 830 grams, while a Viennetta ice-cream cake, produced by Unilever, shrank to 320 grams from 350 grams previously.
Lindt and PepsiCo did not respond to a request for comment. Nestle and Unilever declined to comment.
Pressure on manufacturers
Carrefour's price warnings come ahead of contract negotiations with suppliers that are due to start soon and conclude by mid-October.
"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 with Reuters news agency.
Carrefour CEO Alexandre Bompard, who also heads a retail industry lobby group, 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 being backed by French Finance Minister Bruno Le Maire, who in June summoned 75 big retailers and consumer groups to his ministry to urge 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.
Widespread practice
Consumer groups say "shrinkflation" is a widespread practice, which supermarkets like Carrefour are also guilty of in their own-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 so far.
But Carrefour’s move to name and shame suppliers marks an escalation in the war of words between retailers and big multinationals.
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 the warnings to other goods, but does not plan to extend the initiative to other countries.
Last month, Le Maire said 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.
(with Reuters)
