Loblaws resolves snack price dispute, Frito-Lay returning to store shelves

Loblaw Companies Ltd. and PepsiCo Inc. have resolved a more than month-long dispute that halted shipments of several snack food brands to the Canadian retailer.

A spokesperson for Loblaw confirmed in an email to CTVNews.ca on Sunday that the companies had come to a resolution.

"All along, this was about providing value to our customers," Loblaw vice-president of communications Catherine Thomas said.

"We're happy to have a wider assortment in our chip aisle once again, with a mix of new Canadian flavours and classic favourites, at varying prices to suit our customers' needs."

Products will begin shipping on Monday and the company expects to be fully stocked before the upcoming Easter weekend. The company says it does not comment on specific vendor negotiations or details.

The dispute most notably affected chip products from Frito-Lay Canada, a subsidiary of PepsiCo Inc. and the maker of brands such as Cheetos, Doritos, Lays, Ruffles and Sunchips. Loblaw includes the chains Zehrs, Atlantic Superstore and Provigo, as well as discount stores No Frills and Maxi.

Frito-Lay Canada had previously tried to recoup higher production costs, but with no agreement reached, snack food aisles at many Loblaw stores appeared emptier as a result, which came amid ongoing supply chain issues and inflationary pressures.

"Our business has faced unprecedented pressures from rising costs of items including ingredients, packaging and transportation," Frito-Lay spokeswoman Sheri Morgan told The Canadian Press in February.

"To help offset these pressures on our Canadian operations ... we have made adjustments to our prices that are consistent across the marketplace."

However, at the time, Thomas said the grocer was "laser focused" on minimizing retail price increases.

Grocery prices have continued to climb over the last year, with Statistics Canada reporting that in February, food prices rose by 7.4 per cent year-over-year, making it the largest annual increase since May 2009.

Statistics Canada pointed to higher input prices and transportation costs as contributing to inflationary pressures in February.

Some of the largest price increases year-over-year that month were in meat, which rose 11.7 per cent including 16.8 per cent for fresh or frozen beef and 10.4 per cent for chicken.

Dairy products and eggs also were up 6.9 per cent over the previous year, as the farm gate milk price that producers receive increased to partially offset higher production costs.

With files from CTV News and The Canadian Press