Canada’s Competition Bureau says it is launching a study on competition in the grocery industry.
The agency said in a press release Monday that it plans to investigate various issues in the grocery industry, “with the goal of recommending measures that governments can take to help improve competition in the sector.”
The bureau functions as perhaps Canada’s most prominent consumer watchdog group by investigating anti-competitive practices that serve to push up prices for consumers, including things like deceptive marketing, price-fixing, and even outright fraud.
The bureau says the move isn’t in reaction to any specific allegation of wrongdoing, but it comes as consumers grapple with food prices rising at their fastest pace in more than 40 years.
Last week, new data showed that while Canada’s inflation rate eased to 6.9 per cent, the prices of food purchased at stores still rose by more than 11 per cent.
Many factors have been blamed for the rapid escalation in food prices, including extreme weather events, higher input costs, and temporary supply chain stresses such as the current invasion of Ukraine. But the bureau says it wants to try to understand if there are any anti-competitive factors at play, so it’s seeking answers to three broad questions:
- To what extent are higher grocery prices a result of changing competitive dynamics?
- What can we learn from steps that other countries have taken to increase competition in the sector?
- How can governments lower barriers to entry and expansion to stimulate competition for consumers?
The bureau is seeking input from the public on the issue. Anyone wishing to contribute is invited to contact the bureau via its website before Dec. 16.
When its investigation is complete, the bureau says it plans on publishing its results, with a list of recommendations of how to fix problems it uncovers, if any. That report is expected next June.
Increases in the price of food are out of control, and on the streets of Toronto on Tuesday, Canadians told CBC News about what they are doing to deal with them.
A previous bureau investigation into food price trends found that some companies had colluded to fix the price of bread and baked goods for years, at consumers expense. That investigation is ongoing.
The major retail grocery chains have faced immense pressure of late on the issue, due to the perception that they are increasing their prices more than they need to, under cover of high inflation. Loblaw announced recently it would freeze prices on more than 1,500 products under its in-house brand, No Name, until the end of January, as a way to appease consumers.
But the move has only added to the scrutiny of the industry, with many observers saying it is common for grocery chains to demand price freezes from their own suppliers every year during the busy end-of-year holiday season.
“It is an industry practice to have a price freeze from Nov. 1 to Feb. 5 for all private label and national brand grocery products and this will be the case again this year in all of Metro banners,” a spokesperson for Montreal-based grocery chain Metro told CBC News this week.
