Britvic is believed to have withheld supply of Pepsi to Sainsbury's after the retailer refused demands for a significant cost increase.

Over the past two weeks, there have been shortages of the soft drink in Sains­bury's, which put up shelf barkers stating: "We apologise if you are unable to find any Pepsi varieties. Currently the supplier is failing to supply."

The barkers went on to recommend Sainsbury's Cola as an alternative.

"Britvic tried to pass on cost increases to the whole trade," said one senior industry figure. "Sainsbury's had no dialogue with them so Britvic said 'we've waited long enough we aren't supplying'," he said.

Another source said a 10% price hike had been demanded and that the spat proved it wasn't just the supermarkets that threw their weight around.

"When things like this are looked at by the Competition Commission it's usually a big supermarket bullying a family-owned farm," he said. "But Pepsi is much bigger than Sainsbury's, so it works both ways."

Neither Sainsbury's nor Britvic would comment on the reason for the shortage, but both said it was no longer an issue. "Pepsi supply is currently OK, although Britvic did have a supply issue one to two weeks ago, which is now resolved," a Sainsbury's spokeswoman said.

Sainsbury's is currently charging £1.85 for a two-litre bottle or £2.50 for two, way more than Tesco and Asda, where bottles are on promotion for £1. But over the past three months, it has been the cheapest of the big four, Wait­rose and Ocado [Brandview.co.uk].

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