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French supermarket Carrefour bans certain products over ‘unacceptable’ price hikes

Supermarket chain Carrefour has stopped selling Doritos, Pepsi and other Pepsico brands at its stores in France, Belgium, Italy and Spain amidst a dispute over price hikes, an industry source said on Friday.

French supermarket Carrefour bans certain products over 'unacceptable' price hikes
A sign reading in French "We no longer sell this brand due to unacceptable price increases" is pictured at a Carrefour Group store in Le Pre-Saint-Gervais, near Paris, on January 5, 2024 (Photo by JULIEN DE ROSA / AFP)

“We no longer sell this brand due to unacceptable price increases,” say tags on shelves in Carrefour’s French stores where the Pepsico products once stood.

The source said the move also affected stores in Belgium, Italy and Spain.

It means consumers will no longer be able to find the iconic products alongside PepsiCo names such as Lay’s potato chips, Lipton tea, Quaker Cereals and 7Up.

French retailers are locked in annual negotiations with big food industry firms on prices and other conditions regarding their sale in supermarkets.

“We’ve been in discussion with Carrefour for many months and we will continue to engage in good faith in order to try to ensure that our products are available,” a PepsiCo spokeswoman said, declining to comment further on the talks.

Retailers say they are under pressure from food industry firms to raise prices.

Pepsi’s main rival, Coca-Cola, said in November is was seeking to raise its prices an average of 7 percent.

PepsiCo reported in October its sales so far in 2023 had risen by 9 percent on slightly lower food sales and steady beverage sales, an indication it has also raised prices.

It said it expects to boost profits by 13 percent in 2023 and return around $7.7 billion to shareholders in dividends and share buybacks.

With European consumers suffering from food price inflation — the cost of France’s reference shopping basket has jumped 20 percent in two years — many households are watching their spending and shifting to lower-priced supermarket brands.

Michel-Edouard Leclerc, the head of rival French supermarket chain E. Leclerc said the talks with the food giants had been difficult but said that dropping brand name products was not a satisfactory answer.

“Consumers don’t want to pay more but if they don’t have their products, they won’t be happy and they will go to a rival,” he told Franceinfo radio.

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COST OF LIVING

What is considered a good salary in Paris?

The higher-paying jobs are heavily concentrated in the French capital, but set against that is the high cost of living - especially the cost of renting or buying a home. So what is considered a 'high-earner' in Paris?

What is considered a good salary in Paris?

Centrist Renaissance candidate Sylvain Maillard, running for re-election in France’s snap parliamentary elections, was trying to highlight the high cost of living in the capital in a debate on RMC Radio 

“You have extremely expensive rents [in Paris], between €1,500 and €1,700, and then there are all the charges and taxes to pay,” he said.

But what most people seized on was his comment that anyone earning €4,000 a month after tax would not be considered rich in Paris – he predictably was accused of being out of touch with French people’s lives.

There’s no doubt that €4,000 a month is good salary that most people would be happy with – but how much do you need to earn to be considered ‘rich’ in Paris?

National averages

Earlier this year, the independent Observatoire des Inégalités calculated poverty and wealth levels in France.

READ ALSO How much money do you need to be considered rich in France?

According to its calculations, to be considered ‘rich’ in France, a single person with no dependants needs to earn more than €3,860 per month, after taxes and social charges. Around eight percent of single workers have this sum deposited into their bank balance every month, it said.

A total of 23 percent of workers take home €3,000 or more every month, while the top 10 percent clear €4,170. 

To be in the top one percent of earners in France in 2024, one person must bring in at least €10,000 per month. After taxes and social charges.

The median income – the median is the ‘middle value’ of a range of totals – of tax households in mainland France is €1,923 per month after taxes and social charges, according to INSEE 2021 data, which means that a ‘rich’ person earns about twice as much as a person on the median income, according to the Observatoire.

Paris situation

About 75 percent of people living in Paris earn less than €4,458 per month, according to Insee data – so according to those calculations, 25 percent of Parisians earn the equivalent of the top 10 percent in France. 

But that city-wide average still hides a wide degree of variation. In the sixth arrondissement, the median income is €4,358 per month, after tax. In the seventh, it’s €4,255.  Further out, those bringing home €4,600 a month in the 19th and 20th arrondissements are among the top 10 percent in wealth terms.

But still, the median income in Paris is €2,639, significantly higher than the €1,923 France-wide median.

That would mean – using the Observatoire des Inégalités’ starting point for wealth – that a Paris resident, living on their own, would have to bring home €5,278 per month to be considered ‘rich’. 

France is a heavily centralised country, with many of the highest-paying industries concentrated within the capital, meaning there is much more opportunity to secure a high-wage job if you live in Paris.

Cost of living

Even these figures should all be taken with a pinch of salt because of the relatively high cost of living in the capital, compared to elsewhere in France. Paris is objectively an expensive place to call home.

In 2023, France Stratégie published a report on the disposable income of French households, after housing, food and transport costs were deducted. It found that, on average, people living in the Paris region had more left to spend, due to higher incomes and despite the fact that housing costs more.

It’s the income paradox in action. A person with a take-home salary of €4,000 per month has more money to spend if they live and work outside Paris. But they’re much more likely to earn that much if they live and work in Paris, where it’s not as valuable. 

Someone who earns a ‘rich-level’ salary in Paris might not appear rich – because they live in an expensive area, and a surrounded by very wealthy people in property that’s out of reach all-but the fattest of wallets. But they’re still earning more than twice the median income in France.

And that’s what Sylvain Maillard was getting at, clumsily as he may have expressed it.

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