PepsiCo and Tesco’s Czech divisions are locked in talks after the US food and drink giant decided to stop supplying the UK retailer’s stores in the country.

The Lay’s chips maker pulled its products from Tesco’s Czech outlets in the final quarter of 2011 and are now in discussions over contracts.

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Czech reports this week claimed that a dispute over a price had prompted PepsiCo’s move. However, a spokesperson for the US group’s local subsidiary declined to comment specifically on the reasons for the decision and said talks on “general sale terms” were ongoing.

A spokesperson for Tesco said: “Our aim is always – and with all our partners – to arrive at an agreement enabling further cooperation.”

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