Interesting story coming out of France and beyond, where the CEO of Carrefour, basically, is saying that suppliers are not negotiating in good faith. They're not doing what they should to bring prices back down and the French government last month ordered food producers, including folks like Danone and Kellogg, to cut prices. What they're doing is the French's finance minister is demanding price cuts from the country's 75 biggest food producers. Grocers are all for it. Obviously, the brands are not for it, and the problem that we see is here. In the US. Coke, Pepsi, Unilever have all reported raising prices significantly in the second quarter and we're just not seeing these companies responding to what consumers are looking to do.
Sally: Yes, Phil, it does seem to be a frustration for retailers that really seem to be wanting to lower those prices for shoppers but not getting the cooperation from the brands and companies like Coke and Pepsi and Unilever. They have very loyal following, so if they don't see much movement in people moving away from buying their products, then they're probably going to keep raising their prices until they see customers moving away from them. Unilever has raised their prices 8% and Pepsi and Coke, sorry about that, 15%. At Pepsi they have raised their prices, so these are very significant prices, while these companies are still making very large profits. We're seeing their profits grow, but our shoppers are struggling.
Phil: They are, and Coke said just last week that in the last quarter their profit rose 33% from a year earlier. That amounts to $2.5 billion profit in one quarter. So it just doesn't seem very fair, as people are struggling with prices, as retailers are pushing back, that they're just not doing anything. And I think the funniest quote is from the CEO of Pepsi was quoted on his investment call we've been able to raise prices and consumers stay within our brands. So, to your point, they're just going to keep on raising prices until we get some pushback from consumers. But also we're seeing USDA coming up and trying to help consumers as well. They want to lower food prices. They want to boost competition. They've joined with 31 states in Washington DC to target price fixing and other anti-competitive behaviors in the food and ag system. Secretary Vilsack is coming out really strong against this and they're going to put in new rules to really prohibit these companies from price gouging. And that's what's going on.
Sally: Yes, and the farmers and the ranchers have complained about the unfair contracts that they are getting, and so expanding the possibility for more meat and poultry processing gives these ranchers more opportunity, and so this could really help them out, as well as the consumers.
Phil: We really need to readjust our food system, because people can't. These brands just can't keep on pointing to the pandemic and labor shortage and stuff like that, when these CEOs are making hundreds of millions of dollars personally as compensation, as well as the record profits. It's just not fair.