Industry Minister Francois-Philippe Champagne said he’s “disappointed” with Canada’s largest grocery store chains over transparency on food pricing issues due to inflation.
Champagne wrote a letter to Canada’s Commissioner of Competition Mathew Boswell, expressing his disappointment with the lack of cooperation from the big five chains, which are Metro, Loblaws, Sobeys, Walmart and Costco.
“Large grocers have not, to date, been sufficiently transparent about the causes of food inflation and they have failed, for the most part, to provide regular updates on initiatives aimed at stabilizing food prices in the country. The continued record profits in the grocery retail sector indicate that there are more opportunities to bring relief for Canadian consumers,” wrote Champagne.
The letter didn’t mention implementing tax measures if prices weren’t stabilized, which was a threat made by the Trudeau government last fall.
Prime Minister Justin Trudeau had given the grocers an ultimatum of either creating a plan to reduce inflationary prices or being potentially subjected to tax measures.
“The large grocery stores have accepted to work with the government of Canada. This is a step in the right direction,” said Champagne at the time, following a meeting with CEO’s from the big five chains. “We’ll keep on pushing them. Trust me, this is just the beginning.”
Champagne’s letter referenced the “record profits” that the grocery store sector is currently experiencing, hoping that the letter will put pressure on the Competition Bureau to “further address the concerns of Canadian consumers.”
Recently, Parliament passed Bill C-56, also known as the Affordable Housing and Groceries Act, which Champagne hopes will allow the commissioner to “take full advantage” of the powers granted to him.
Under Bill C-56, the Competition Bureau is allowed to investigate unfair behaviour in the grocery sector and may even take new actions against those who are guilty.
It also compels grocery chains to provide the government with information on market studies.
“This is why we amended the Competition Act through Bill C-56, the Affordable Housing and Groceries Act, to include formal market study powers, repeal the efficiencies defence that allowed harmful mergers to proceed, and expand the scope of reviewable agreements and tools to challenge abusive practices of market-dominant firms. These powers are by and large now in effect,” reads the letter.
The letter did not contain any mention of new government measures being implemented but was rather to express discontent and to hold “grocers’ feet to the fire.”
However, there are new Competition Act reforms currently passing through Parliament, which if passed, would give more authority to the Bureau to investigate anti-competitive activities in the sector.
“As I’ve said many times before at this podium, the best way to stabilize grocery prices in this country is to have more competition. More competition will mean more options, which leads to a downward pressure on price. It’s fairly straightforward and I think every Canadian can understand that,” Champagne told CTV News.
