Frito-Lay Halts Shipments to Canada’s Largest Grocer Amid Pricing Dispute

It illustrates tensions between manufacturers seeing higher costs and retailers hesitant to pass those costs to consumers.

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The Canadian Press reported Feb. 22 that Frito-Lay, the snacking unit of PepsiCo, has cut off shipments to Loblow — the largest retail grocery chain in Canada, amid tension between the two parties.

I Stock 1287288023iStockThe report details a pricing dispute between the Frito-Lay Canada and Loblaw Companies as the manufacturer has recently hiked prices to recover higher costs for producing its brands that include Cheetos, Doritos, Lays, Ruffles and Sunchips.

The news outlet said the dispute has caused stockouts on snack food shelves at many Loblaw locations or led to the grocer replacing Frito-Lay products with its more of its house brands, President's Choice and No Name.

A Frito-Lay spokesperson told The Canadian Press that there is a “temporary disruption” with a customer, but didn’t name Loblaw specifically. The spokesperson went on to say that the company has faced pressures from rising production and supply chain costs and has made pricing adjustments “that are consistent across the marketplace.”

Meanwhile, a Loblaw spokesperson told the outlet that the grocer is “laser-focused” on minimizing retail price hikes.

"When suppliers request higher costs, we do a detailed review to ensure they are appropriate," The Canadian Press quoted a Loblaw email. "This can lead to difficult conversations and, in extreme cases, suppliers don’t ship us products."

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