Loblaw’s – the alpha dog of the supermarket pack – has signed the new Grocer’s Code of Conduct. That’s not likely to help desper-ate consumers. But a parliamentary committee has called on the Trudeau Government to act decisively…
Galen Weston – the Lord of Loblaw’s – was the central witness at last fall’s top-level
government hearings on high food prices. But he, and his counterparts at the
other leading supermarket chains, have done nothing to help bring down
punishingly high food prices. It’s time for the government to step in.
Real progress?
Loblaw’s – Canada’s largest supermarket chain with a mammoth 21 percent share of the market – finally signed the controversial Grocer’s Code of Conduct (GCC) earlier this month. There’s some difference of opinion as to why the grocer signed on to the deal. The company said it has been waiting for the wording to evolve to perfection. And during the second week of May, it did.
But food price protesters are claiming Loblaw’s acquiescence as a win. That was a key demand of the r/loblawsisoutofcontrol Reddit group which organized the month long boycott campaign of the brand.
But the group also demanded an immediate reduction in retail food prices of at least 15 percent. And there’s no sign of that happening.
Prices not addressed
The GCC doesn’t directly address the issue of high food prices. It’s entirely a vehicle to facilitate negotiations among grocers and their suppliers. The grocers and the government entities involved in developing the Code will only say that better, more transparent relations between retailers and suppliers may result in lower prices.
That’s just not good enough for consumers. And a new House of Commons committee specifically investigating high food prices agrees. The committee has, in fact, formally recommended that the Government act on what its report calls “excessive net profits” in the food industry.
Consumer groups have long charged that the 5-member supermarket cartel, which controls the lion’s share of food retailing in Canada, has been gouging consumers through artificially high prices. The supermarketeers haev just as staunchly claimed they’re not gouging. And that external forces they can’t control are responsible for high prices.
Loblaw’s embarrassing example
Food price protesters gleefully hold up Loblaw’s financial results as an example of the kind of abusive behaviour the grassroots is complaining about.
The boycott website reported Loblaw’s has enjoyed a robust year financially thus far: “The same day the boycott was launched, the company released its first quarter earnings results and hiked its divi-dend by 15 per cent after reporting an almost 10 per cent rise in profits. Loblaw said the increase […] was due to a jump in customer traffic, as prices at its stores rose less than the general level of food inflation tracked by the consumer price index.”
Take note, that’s a 10 percent increase just over the first 3 months of this year!
My take
I can’t help but think that Loblaw’s, at least, is gouging. Bigtime. And I’ve said before that the govern-ment must step in on behalf of consumers. It would be bad enough if the situation was not getting worse. But more and more Canadians are falling below the poverty line every month. And more an more are faced with hard decisions about where to put their dollars. Some literally have to decide between their utility bills and their grocery list.
In any just society, under the conditions we currently face, the grocery retailers should be demon-strating the kind of leadership we have a right to expect from them. After all, they have made their billions on our backs. It’s time they sacrificed at least some of their profit to the greater good. With ownership comes responsibility.
~ Maggie J.