Food price survey: Pressure on grocers mounts

All eyes are on supermarket chains, which must justify their rising profit margins as consumers struggle with double-digit food inflation.

• Also read: The Competition Authority will check the price of the shopping cart

Yesterday it was the turn of the Competition Authority, which announced that it would look into the matter. The federal body will examine the food retail sector and issue its final report in June 2023.

The decision follows that of the House of Commons Agriculture Committee, which launched an investigation three weeks ago.

Basically, we’re trying to explain to Canadians and Quebeckers why grocery store prices are rising so fast.

But if Pierre Larouche, a professor of competition law at the University of Montreal, is to be believed, consumers will have few answers to their questions.

“The Competition Authority will have no authority to restrict, it will have to be satisfied with what we want to communicate,” explains the expert.

The agency’s market research announcement also indicates that it does not plan to target food suppliers.

“Yet the big three chains often abuse their power over suppliers. It forces them to sell at low prices without passing the drop on to customers every time,” says the professor.

Claimed actions

Retailers such as IGA, Metro and Loblaws also believe the Competition Authority should widen its investigation.

“You have to evaluate the whole job, not just the end of the food chain, which is the grocery store,” said Michel Rochette, president of the Retail Council of Canada, which represents the three chains.

It will be an opportunity for retailers to explain the rise in their input prices, he said, before stressing that Canadians are “lucky” because the situation is worse elsewhere.

For example, food inflation is 18.7% in Germany compared to 10.8% in Canada.

All this does not move the economist DT Cochrane, who reminds that the survey of Toronto Star concluded last summer that the big supermarket chains were raising prices faster than necessary and profiting from inflation.

“It’s good that the Competition Authority is studying the situation, but it will also take action from the government,” says one who works for Canadians for Fair Taxation.

Control by companies

If not directly a price control mechanism, it suggests at least a windfall tax to “reduce incentives to increase profit margins.”

“Because for now there is a price control, but the companies do it,” he jokes.

In Quebec, the Round Table on Hunger and Social Development in Metropolitan Montreal, which brings together some sixty organizations such as Moisson Montreal, has been calling for government intervention for months.

“Legislative intervention to moderate the gluttony of the big food chains” is necessary, according to CEO Jean-Paul Faniel.

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