A federal anti-trust agency will launch review of lack of competition in the grocery trade. The Competition Bureau review comes nine years after the same agency approved mega-mergers that lessened competition..“The Canadian grocery sector is concentrated,” the Bureau wrote in a Market Study Notice: Competition In Canada’s Grocery Sector. “Many Canadians buy groceries from retail chains operated by one of three companies: Loblaw, Sobeys and Metro.”.“When consumers have more choices between grocery stores they are likely to pay lower prices,” said Market Study Notice. The Bureau stressed it was not looking for evidence of profiteering, but questioned how regulators can “stimulate competition for consumers.” A final report is due June 30, 2023..According to Blacklock's Reporter, the Bureau in 2013 approved a $5.8 billion takeover of Canada Safeway Limited stores by Sobeys Inc. The buyout affected 213 Safeway stores in Western Canada, 199 pharmacies, 62 gas stations, 12 food processing plants, 10 liquor stores and four distribution centres..The Bureau in 2014 also approved a $12.4 billion takeover of Shoppers Drug Market Corporation by Loblaw Companies. The agency at the time acknowledged the takeover “would result in a substantial lessening of competition in 27 local markets.” The merger made Loblaw Companies the nation’s largest grocer with 2,738 stores and the largest pharmacy chain with 1,824 outlets..Then-Competition Commissioner John Pecman in a 2014 speech to independent grocers in Vancouver said the Bureau would consider a code of conduct in the industry. No action was ever taken. “If the government expresses a desire to move in the direction of a code of conduct and if we are asked to participate, we would certainly implement it,” said Pecman..Parliamentary hearings to date have heard testimony there is no evidence of profiteering by grocers amid 11% food inflation. “I’m an economist by training,” Budget Officer Yves Giroux testified September 27 at the Senate banking committee. “As far as I’m concerned this is a matter of supply and demand. It’s hard to accuse anyone increasing their prices of profiting from the situation even though it may look that way.”.Professor Sylvain Charlebois, director of the Agri-Food Analytics Lab at Dalhousie University, told the House of Commons finance committee on September 18 that he saw no proof of profiteering. “That said, some prices in some categories have behaved unreasonably,” testified Charlebois..The Retail Council of Canada, a grocers’ lobbyist, has also denied profiteering. “Grocers make less than 5% typically on their operations and 3% on average,” Karl Littler, senior vice president of the Retail Council, told the finance committee. “That is a lower rate than just about any other industry, certainly lower than food manufacturers and big agriculture.”.“Some commentators are rushing to judgment or seeking to play the blame game,” said Littler.
A federal anti-trust agency will launch review of lack of competition in the grocery trade. The Competition Bureau review comes nine years after the same agency approved mega-mergers that lessened competition..“The Canadian grocery sector is concentrated,” the Bureau wrote in a Market Study Notice: Competition In Canada’s Grocery Sector. “Many Canadians buy groceries from retail chains operated by one of three companies: Loblaw, Sobeys and Metro.”.“When consumers have more choices between grocery stores they are likely to pay lower prices,” said Market Study Notice. The Bureau stressed it was not looking for evidence of profiteering, but questioned how regulators can “stimulate competition for consumers.” A final report is due June 30, 2023..According to Blacklock's Reporter, the Bureau in 2013 approved a $5.8 billion takeover of Canada Safeway Limited stores by Sobeys Inc. The buyout affected 213 Safeway stores in Western Canada, 199 pharmacies, 62 gas stations, 12 food processing plants, 10 liquor stores and four distribution centres..The Bureau in 2014 also approved a $12.4 billion takeover of Shoppers Drug Market Corporation by Loblaw Companies. The agency at the time acknowledged the takeover “would result in a substantial lessening of competition in 27 local markets.” The merger made Loblaw Companies the nation’s largest grocer with 2,738 stores and the largest pharmacy chain with 1,824 outlets..Then-Competition Commissioner John Pecman in a 2014 speech to independent grocers in Vancouver said the Bureau would consider a code of conduct in the industry. No action was ever taken. “If the government expresses a desire to move in the direction of a code of conduct and if we are asked to participate, we would certainly implement it,” said Pecman..Parliamentary hearings to date have heard testimony there is no evidence of profiteering by grocers amid 11% food inflation. “I’m an economist by training,” Budget Officer Yves Giroux testified September 27 at the Senate banking committee. “As far as I’m concerned this is a matter of supply and demand. It’s hard to accuse anyone increasing their prices of profiting from the situation even though it may look that way.”.Professor Sylvain Charlebois, director of the Agri-Food Analytics Lab at Dalhousie University, told the House of Commons finance committee on September 18 that he saw no proof of profiteering. “That said, some prices in some categories have behaved unreasonably,” testified Charlebois..The Retail Council of Canada, a grocers’ lobbyist, has also denied profiteering. “Grocers make less than 5% typically on their operations and 3% on average,” Karl Littler, senior vice president of the Retail Council, told the finance committee. “That is a lower rate than just about any other industry, certainly lower than food manufacturers and big agriculture.”.“Some commentators are rushing to judgment or seeking to play the blame game,” said Littler.
