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Canadian Supermarkets Offer Food Price ‘Solutions’

Canadian Industry Minister François-Philippe Champagne gave the country’s 5 largest supermarket chains until Thanksgiving (in Canada, that’s this coming Monday, October 9) to come up with real, substantial ways to cut food price inflation. Yesterday, they responded…

Galen Weston Witness - © 2023 Spencer Colby - CPGalen Weston – head of Maple Leaf Foods, owner of Loblaws and dozens of other
groups – looks less than enthralled to be testifying
at a government food price inquiry last month…

Champagne summoned the CEOs of Loblaw, Sobeys, Metro, Costco and Walmart to Ottawa last month to get tough with them over unsustainable food prices. The minister required them to submit plans by this coming Monday.

Not a happy crew

The supermarket honchos were none too happy to be summoned to Ottawa in the first place. And if their facial expressions during the commission of inquiry session were any indication, must have been chagrined to be ordered to come up with plans to, in effect, control their profits.

Yesterday, with just days remaining until the Minister’s deadline, Canada’s 5 largest food retailers unveiled a plan to fight food inflation.

Among the measures being promised by the grocers are: more discounts, price freezes and price-matching campaigns.

“These measures will bring a much needed [and] more competitive marketplace and the winners of that are obviously Canadians,” the Minister said. He expects the promised food price cuts to begin showing up, “within days.”

All well and good, but…

Observers note that late fall is traditionally the season for the kind of price-lowering activities the grocers are promising. It’s the run-up to the year-end holidays when folks generally spend more to celebrate and entertain. And all the big supermarket chains compete for the lion’s share of the holiday-boom business.

In effect, the usual discounts, price freezes and price-matching campaigns are just getting a brighter spotlight.

However, the Minister insisted that the announced measures were only some of the commitments made by the supermarket cartel to make food prices affordable again. For some reason, he wouldn’t reveal just what the additional measures are. Or when they might take effect.

Competition questions

The Competition Bureau of Canada started the ball rolling for government intervention in the food price inflation mess back in June, when it stated that the country’s grocery retailing sector lacks effective competition and is dominated by just three huge conglomerates: Loblaw, Sobey’s and Metro.

Industry Minister Champagne responded with his command performance call to supermarket CEOs a few weeks later.

Now that some action has been seen to be taken, Champagne is counselling consumers to have patience as the grand plan to fight food inflation unfolds.

“This is day one of a process,” he said. “What we have achieved would be a catalyst for more measures, faster measures and long-lasting measures.”

We’ll see.

My take

I’m more than a little annoyed by the cynicism of the supermarket giants, suggesting that their usual holiday season discounts, price freezes and price-matching campaigns could possibly qualify as substantive measures to fight food inflation.

But… What may have a more long-term effect than the fruits of Champagne’s talks with grocers is the recommendation by the Competition Bureau to give it more power enforce food sector competition.

A news release calls for changes to the Competition Act that would, “compel the production of information [by food retailers] to conduct effective and complete market studies.” Just what that information might consist of was not revealed. But I’m certain that the grocers would fight tooth and nail not to reveal what they consider strategically sensitive info that might put them at a competitive disadvantage. Which is another way of saying, threaten their profits.

Much less would they want to reveal any information that might make them look as though they place their private commitment to profits over their implicit responsibility, as controllers of a vital, fundamental resource, to ensure that all Canadians can afford decent food.

~ Maggie J.