Frito-Lay, the snacks unit of PepsiCo, has stopped shipping product to Canada’s largest grocery chain in a dispute over pricing.
Loblaw Cos. Ltd. confirmed to The Canadian Press that it has stopped receiving products like Doritos and Lay’s Potato Chips because it couldn’t come to terms with Frito-Lay Canada on its latest round of price increases. The interruption led to Loblaw stores having bare shelves in the snack aisles, or stocking those shelves with alternative products such as President’s Choice and other Loblaw store brands.
"When suppliers request higher costs, we do a detailed review to ensure they are appropriate," a Loblaw spokesperson told The Canadian Press. "This can lead to difficult conversations and, in extreme cases, suppliers don’t ship us products."
The situation is emblematic of growing tension between food processors and retailers as inflation continues to surge. The processors say they’re trying to keep ahead of increases in their own costs, but some retailers are charging them with taking advantage of the situation.
"This [Loblaw dispute] follows an already alarming number of increases in the preceding quarter," a spokesperson for the Retail Council of Canada said. "In many cases the increases are unprecedented and far exceed typical food inflation levels."
