French supermarket chain Carrefour is taking a stand against rising prices by placing warnings on products that have shrunk in size yet become more expensive, despite a decrease in raw material costs. The move targets major suppliers like Nestlé, PepsiCo, and Unilever, pressuring them to lower their prices.
Carrefour has begun labeling items such as Lindt chocolates and Lipton Ice Tea with signs stating, “This product has decreased in volume or weight, but the supplier’s price has increased.” The retailer aims to garner consumer support as it prepares to negotiate with these global brands, with discussions set to conclude by October 15.
Stefen Bompais, Carrefour’s director of client communications, explained, “The goal of highlighting these products is to encourage manufacturers to reconsider their pricing strategies.” Carrefour CEO Alexandre Bompard, also leading the French retail industry lobby group FDC, has criticized consumer goods companies for failing to lower prices despite a drop in raw material costs. French Finance Minister Bruno Le Maire has supported this stance, having previously urged major retailers and consumer groups to cut prices, and recently noted that companies like Unilever, Nestlé, and PepsiCo have not adhered to this request.
Since Monday, Carrefour has marked 26 products in its French stores with notices about price increases relative to shrinking sizes. For instance, a bottle of sugar-free Lipton Ice Tea from PepsiCo decreased from 1.5 liters to 1.25 liters, resulting in a 40% price hike per liter. Nestlé’s Guigoz infant formula reduced from 900 grams to 830 grams, while Unilever’s Viennetta ice cream cake shrank from 350 grams to 320 grams.
Lindt, whose “chocolat au lait extra fin” was among the products listed, stated that its average price increase of 9.3% was a response to local cost pressures. A spokesperson noted, “We have worked to enhance efficiency to absorb as many costs as possible, passing on only the unavoidable increases to our customers.”
PepsiCo did not comment on the matter, while Nestlé and Unilever declined to respond. Consumer groups argue that “shrinkflation” is a common practice, with supermarkets like Carrefour also engaging in it with their private label products.
In response to the cost of living crisis, France has been pressuring big businesses to freeze or reduce food and transport prices, with varying success. Carrefour’s shrinkflation warnings will remain in French stores until suppliers agree to price reductions, though the retailer does not plan to extend this initiative to other countries. Le Maire has indicated that annual price negotiations will be moved up to September, with price adjustments expected to take effect in January.