More than a quarter of Canadians say profiteering by grocery chains is the top cause of high food costs, underscoring the political logic behind Prime Minister Justin Trudeau’s public demands that stores stabilize prices. Polling by Nanos Research Group for Bloomberg News shows 28% of respondents say stores increasing prices to make more profit is the biggest reason for the sharp rise in grocery bills in the past year. Increased fuel costs and profiteering by food manufacturers were two other top reasons, cited by 18% and 15% of respondents, respectively.

The survey backs the idea behind the government’s efforts to improve food affordability by demanding top grocery chains — Walmart Inc., Loblaw Cos. Ltd., Metro Inc., Empire Co. and Costco Wholesale Corp. — create plans to restore price stability or face unspecified tax measures. The government’s plan, however, faced criticisms that the growth of food prices is expected to slow in coming months regardless of the government’s actions. Grocery inflation slowed to 5.8% in September, from 6.9% in August, but still remained above the headline rate of consumer price gains.

Grocers have also argued that between 70% and 80% of checkout prices are determined before food hits store shelves. “It therefore remains critical that all members of the complex supply chain address their respective roles in food pricing,” said Michelle Wasylyshen, spokesperson for the Retail Council of Canada, in a statement earlier this month.

Now, a House of Commons committee is demanding the country’s top grocery stores disclose the strategies and initiatives the chains have taken to stabilize prices and is again asking their top executives to testify. MPs asked the companies to share “a comprehensive report on their strategies and initiatives taken to date and on further actions aimed at the stabilization of grocery prices in Canada.”

The documents are due on Nov. 2, according to the committee motion, which also says MPs would review them privately and report findings to the House of Commons. The Globe and Mail asked all five companies if they would comply with the requests. Only Sobeys replied with a comment.

The company hasn’t yet received an invitation, but will participate if asked, Sobeys spokesperson Laetitia Tchatat said. However, she also cautioned that given that its plans are commercially sensitive, Sobeys won’t discuss them publicly before launching them in stores.

Earlier this fall, Industry Minister François-Philippe Champagne announced the grocery chains had shared their plans with the government, which he said included discounts, price freezes and price-matching campaigns. However, Mr. Champagne offered few details about those promotions and most grocers have not confirmed details of their plans. The minister later said he wished grocers were “more forthcoming” with the public. MPs on the House committee said the lack of clarity is why they decided to start the review

Source: Globe and Mail
Source: The Star
Source: Financial Post
Source: Financial Post