Shoppers at Loblaw Cos. Ltd.’s stores will soon no longer be able to get a coffee fix by purchasing Folgers-brand products after a pricing dispute prompted the grocer to pull them from its shelves.
In an email sent to retailers on Wednesday, Loblaw said it decided to delist all Folgers products after talks with the coffee maker’s manufacturer couldn’t solve the impasse.
“After several weeks of negotiations, we were unable to reach an agreement with the manufacturers of Folgers coffee regarding their significant and unjustified proposed price increases,” said the email signed by Loblaw category director Suren Theivakadacham and obtained by The Canadian Press.
“We are doing this because we are on the side of customers, and doing what we can to keep prices low … This decision to delist Folgers coffee reflects our commitment to providing value for customers by not accepting unreasonable cost increases that would hurt Canadians.”
The email contained an attached list of alternative coffee products the grocer offers as stores prepare to update their shelves.
The move comes as coffee prices continue to rise in Canada.
Last month, Statistics Canada reported the price of coffee and tea was up 13.4 per cent in April on a year-over-year basis — outpacing both the 3.8 per cent increase in the cost of groceries that month, as well as Canada’s overall inflation rate of 1.7 per cent.
Experts say higher coffee prices are in part due to recent extreme weather and changes in temperature, which have caused some producers to experience lower yields.
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Other pressures include a weak Canadian dollar, making it more expensive to import coffee to Canada from other countries, along with the fact coffee is one of the products still subject to Canada’s retaliatory tariffs against the U.S.
While the U.S. isn’t a major producer of coffee, Canadian distributors often purchase it from American brokers.
Folgers products are made by the Orrville, Ohio-based J.M. Smucker Co., which raised prices of its coffee offerings both last June and October in response to higher costs it is facing.
President and CEO Mark Smucker told analysts on the company’s quarterly earnings call in February that more coffee price increases were likely on the way. He said pricing decisions are dictated by costs it faces.
“Although we haven’t laid out when other pricing is going to happen, we do expect it’s going to happen in the next fiscal year, probably in the first half,” Smucker said at the time.
The company did not respond to a request for comment on Thursday.
Loblaw spokeswoman Catherine Thomas said Folgers’ proposed cost increases were “unreasonable and unjustified based on underlying costs” and that the grocer felt it was important to push back as many Canadians continue to struggle with unaffordability.
“Despite several attempts to address this with the manufacturer, we were not successful,” Thomas said in a statement.
“We will not accept or pass unjustified cost increases on to customers and therefore we have removed Folgers from our shelves … We recognize this may create some inconvenience for customers and for that we apologize but again, we will do what is right to help address price increases.”
Thomas added Loblaw expects most of its stores to be out of stock of Folgers products over the next week or two.
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