Canada's largest grocery retailer, Loblaw Companies Ltd., has removed all Folgers coffee products from its stores following a pricing disagreement with the manufacturer, J.M. Smucker Co. The grocery giant said the proposed cost increases were “unreasonable and unjustified based on underlying costs.”
In an internal email to retailers, Loblaw explained that talks with Folgers' manufacturer failed to produce an agreement. “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,” wrote Suren Theivakadacham, Loblaw's category director. The company emphasized that it is acting in the interest of consumers struggling with affordability.
Loblaw spokesperson Catherine Thomas stated the decision was not taken lightly but was necessary to keep prices in check. “We will not accept or pass unjustified cost increases on to customers, and therefore we have removed Folgers from our shelves,” she said. “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.”
The company has also circulated a list of alternative coffee products to its stores as shelves are being updated. Thomas added that most stores are expected to be out of stock of Folgers items within the next week or two.
This move comes amid rising coffee prices across Canada. In April, Statistics Canada reported a 13.4 per cent year-over-year increase in the price of coffee and tea, well above the 3.8 per cent rise in overall grocery costs and the national inflation rate of 1.7 per cent.
Experts attribute the rising costs to a combination of factors, including extreme weather conditions that have reduced crop yields. Coffee is also affected by a weaker Canadian dollar and ongoing retaliatory tariffs on certain US imports, even though the US isn’t a major coffee producer.
Folgers products are manufactured by Ohio-based J.M. Smucker Co., which has implemented price hikes in the past year due to escalating costs. Company CEO Mark Smucker said in a February earnings call that more increases were expected in the near future.
“Our pricing actions have been managed prudently and responsibly and have only been taken when justified by costs,” company spokesperson Frank Cirillo said.
In an internal email to retailers, Loblaw explained that talks with Folgers' manufacturer failed to produce an agreement. “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,” wrote Suren Theivakadacham, Loblaw's category director. The company emphasized that it is acting in the interest of consumers struggling with affordability.
Loblaw spokesperson Catherine Thomas stated the decision was not taken lightly but was necessary to keep prices in check. “We will not accept or pass unjustified cost increases on to customers, and therefore we have removed Folgers from our shelves,” she said. “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.”
The company has also circulated a list of alternative coffee products to its stores as shelves are being updated. Thomas added that most stores are expected to be out of stock of Folgers items within the next week or two.
This move comes amid rising coffee prices across Canada. In April, Statistics Canada reported a 13.4 per cent year-over-year increase in the price of coffee and tea, well above the 3.8 per cent rise in overall grocery costs and the national inflation rate of 1.7 per cent.
Experts attribute the rising costs to a combination of factors, including extreme weather conditions that have reduced crop yields. Coffee is also affected by a weaker Canadian dollar and ongoing retaliatory tariffs on certain US imports, even though the US isn’t a major coffee producer.
Folgers products are manufactured by Ohio-based J.M. Smucker Co., which has implemented price hikes in the past year due to escalating costs. Company CEO Mark Smucker said in a February earnings call that more increases were expected in the near future.
“Our pricing actions have been managed prudently and responsibly and have only been taken when justified by costs,” company spokesperson Frank Cirillo said.
