For the second time this year, the federal government hauled grocery executives to Parliament Hill for a “chat” about high food prices.
Driving the news: Canada's five biggest grocers have agreed to work with the feds to stabilize food prices, according to Innovation Minister Francois-Philippe Champagne.
The chains—Loblaws, Sobey’s, Metro, Walmart Canada, and Costco—make up roughly 80% of all food sales in Canada.
- Prime Minister Justin Trudeau warned that grocers could face tax measures if they don’t put forward a short-term plan by Thanksgiving.
Catch up: The meeting comes after a scathing report into grocers — released by the Competition Bureau this summer — criticizing the lack of competition in the sector.
- The Competition Bureau determined that Canada’s largest grocers’ food gross margins generally increased by a modest yet meaningful amount over five years.
Why it matters: While "emergency meeting about food prices" sounds pretty good to anyone paying $37 for chicken breasts lately, a realistic next step could involve grocers having to provide federal agencies with data around things like food margin growth.
Yes, but: Grocery executives have been persistent in their claims that factors like Russia’s war on Ukraine, vendor price increases, and supply chain disruptions lead to price instability.
Bottom line: A temporary plan to reduce prices for Thanksgiving likely won’t do much to solve the bigger problem at hand: A serious lack of competition in the grocery sector.—LA