PepsiCo’s Nooyi slams US inaction on runaway prices

June 12th, 2008 - 5:04 pm ICT by IANS  


New York, June 12 (IANS) PepsiCo chief Indra Nooyi has criticised Washington for not doing enough to control energy prices, which could hurt companies by cutting into consumers’ discretionary spending. What is particularly worrisome, Nooyi said here Wednesday at a conference hosted by The Wall Street Journal, “I don’t see anybody in Washington or anywhere saying, ‘Look, this energy crisis is the biggest one we’ve had, let’s really put the best people to work on figuring out how to reduce the country’s dependence on oil.’”

She said lawmakers need to “figure out what they’re going to do about it” before Americans begin to rein in their spending. Consumer spending accounts for more than two-thirds of the US economy.

US crude oil prices rose more than $5 Wednesday to $137.16 a barrel after a government report showed domestic stockpile fell sharply for the fourth week in a row. Oil prices have risen nearly seven times over the last five years, mainly because of rising demand from developing countries as well as the falling dollar.

After highlighting the critical nature of oil prices issue whose domino effect extends far and wide, Nooyi harked back to former president John F. Kennedy’s resolve, ‘Let’s put a man on the moon and bring him back.’

“I just don’t see that kind of leadership now,” Nooyi said.

Pointing out that rising food prices are squeezing consumer spending, she said. “Yes, you can pass the costs on to the consumer, but at what point will they stop buying.”

PepsiCo, which owns food brands such as Doritos, Cheetos, Quaker and Frito-Lay, and drinks brands including Tropicana, Mountain Dew and Aquafina, has raised prices on much of its portfolio to try to offset higher commodity costs: cooking oil, oats, wheat, corn and energy.

But Nooyi said PeopsiCo has largely escaped drop in sales - mainly because consumers look at many of the company’s products as comfort food.

She added that the food and beverage industry in general would likely be hurt less by a cutback in consumer spending than other sectors because people still have to eat and drink, and are doing so more often at home since dining out hurts the pocket more.

Speaking at the Journal’s “Deals and Dealmakers” conference, Nooyi said her company is always looking at “20 or 30 little deals around the world, all the time” but declined to specify which companies they are currently considering acquiring.

About staying at the helm at PepsiCo, she said she will remain CEO as long as it “makes sense”.

Nooyi, who has become something of a celebrity in India, said she can no longer even walk to the market in peace there. Instead, she said she has to “worry about who’s taking a picture of you and what Facebook or blog it’s going to show up on”.

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