If you’ve walked through any Loblaw’s store recently, it’s hard to ignore the empty shelves that span through their chip aisle.
This is because PepsiCo Inc. ‘s Frito-Lay subsidiary, the brand that’s famous for producing your favourite chip brands like: Doritos, Lays, Tostitos and Cheetos, has outright stopped stocking store shelves because Loblaws refused to accept higher chip prices.
The two giants had been negotiating for months, to no avail. Frito-Lay wants to see a 10% increase in chip prices, over “unprecedented pressures” as costs rise for ingredients, packaging, and shipping. Loblaws says no.
Some Loblaws store owners had only found out about the tensions as Frito-Lay when merchandisers came to their stores empty-handed.
“To help offset these pressures on our Canadian operations and to ensure that we maintain the high quality our consumers expect, we have made adjustments to our prices that are consistent across the marketplace,” a PepsiCo spokesperson told the Globe and Mail.
The spat gives us insight into what’s happening behind the scenes as food prices skyrocket. Statistics Canada reported that food prices jumped 6.5% in January, which is the biggest year-over-year jump in over ten years.
Many in the industry are looking to reform the grocery code of conduct to prevent these issues. The House of Commons has been looking to reform the code to address disputes since at least 2020.
As inflation worsens, some academics say that the spat about chips will likely expand to include other food categories such as bread and dairy as well.
Food experts have said that Sylvain Charlebois, a Dalhousie University professor of food distribution and policy has called this “tip of the iceberg,” and that “it’s not just about chips.” Charlebois told CBC News on February 22nd.
The week-long stand-off between Frito-Lay and Loblaws shows the fragility of the relationship between food retailers and producers and shows what could be in store for other foods in the near future.