With rising food prices and consumers in mind, the Competition Bureau of Canada is undertaking a market study on grocery store competition.
The review will look at how governments could tackle food price increases through increased competition in the sector, the independent agency said in a statement on Monday.
The study will take into account:
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To what extent higher food prices are the result of changing competitive dynamics;
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What lessons can be learned from other countries to increase competition? and
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How governments can lower barriers to entry to boost competition.
“Canadian consumers have seen their purchasing power diminish. This is especially true when buying groceries. In fact, grocery store prices in Canada are rising at the fastest rate seen in 40 years,” the competition agency said.
“Many factors are believed to have impacted food prices, including extreme weather conditions, rising input costs, Russia’s invasion of Ukraine and supply chain disruptions. Are competitive factors also at work? To find out, the Bureau will study this question.
The agency, which focuses on protecting and promoting competition in Canada, will examine this issue over the coming months and expects to issue its findings by June 2023.
Submissions from “interested parties” on retail grocery competition in Canada will be accepted until December 16.
The move comes amid heightened political attention on the rising cost of groceries. Last week, the House of Commons unanimously passed an NDP motion calling on the federal government to take action to fight ‘greed’, including asking the Competition Bureau to investigate chain profits grocery stores.
In addition, the House Agriculture and Agri-Food Committee has agreed to undertake a study on the cost of groceries and inflation in the food supply chain. As part of that work, MPs are expected to appeal to industry stakeholders including grocery store executives, economists and farmers, pledging to ‘get to the bottom’ of rising food costs. grocery.
In Monday’s statement, the office noted that the study is “not an investigation into specific allegations of wrongdoing.”
“If we find evidence during this study that someone might be doing something against the law, we will investigate and take appropriate action,” the agency said.
Sylvain Charlebois, senior director of Dalhousie University’s food analysis laboratories, said large grocery chains dominate the market, to the detriment of independent grocers.
“You need independence to provide choice and bring innovation to market. That doesn’t happen a lot in Canada,” Charlebois told CTV News Channel on Monday, adding that while the study is remarkable, he doesn’t expect major changes in the industry.
Innovation, Science and Industry Minister Francois-Philippe Champagne called the bureau’s study the “unwelcome” he asked for.
“Last Friday I asked them very specifically to start acting immediately because we see what is happening in the market right now,” he told reporters in Ottawa. He said the grocery giants need to know federal officials are watching “very carefully” and demanding they look at what they can do to “help consumers now.”
In addition to NDP members saying they have no doubt that this decision is a result of the pressure of the vote of the Parliament Last week, NDP Leader Jagmeet Singh said on Monday that the Competition Bureau’s decision “shows that his party’s advocacy is paying off for Canadians struggling with the high cost of groceries.” .
“New Democrats have for months been exposing corporate greed that drives up costs for hard workers and are pushing Liberals and Conservatives to stop siding with the wealthy CEOs of huge grocery chains who make millions dollars while Canadian families must decide what groceries they can buy and what they should hand over. This is a victory for ordinary people that the Competition Bureau is listening to,” Singh said in a statement.
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