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The Competition Bureau is making recommendations to promote competition in Canada\u2019s grocery industry \u2013 actions that would encourage lower prices and more choice for Canadians.<\/p>\n
The Bureau, on Tuesday, said grocery prices have increased at their fastest rate in more than 40 years, and Canadians are feeling the pinch.<\/p>\n
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It published its market study report\u00a0Canada Needs More Grocery Competition which recommends that all levels of Canadian government act to increase competition in the grocery industry.<\/p>\n
\u201cAs we have witnessed the highest cost-of-living increases seen in a generation, Canadians are recognizing the relationship between a lack of competition and rising prices. By acting now, governments at all levels can take steps towards creating a more competitive grocery industry. Competition can help lower prices and make life more affordable for Canadians,\u201d said Matthew Boswell, Commissioner of Competition, in a statement.<\/p>\n The report makes four recommendations to governments to meaningfully improve competition in the grocery industry:<\/p>\n 1.\u00a0Create a whole-of-government strategy to support the emergence of new types of grocery businesses;<\/p>\n 2.\u00a0Encourage the growth of independent grocers and the entry of international grocers;<\/p>\n 3.\u00a0Introduce accessible and harmonized unit pricing requirements to empower consumer choice; and<\/p>\n 4.\u00a0Limit the use of property controls that make it difficult for new grocery stores to open.<\/p>\n \u201cCanada\u2019s grocery industry is concentrated. Most Canadians buy groceries in stores owned by a handful of grocery giants. In 2022, Canada\u2019s three largest grocers\u2014Loblaws, Sobeys, and Metro\u2014collectively reported more than $100 billion in sales and earned more than $3.6 billion in profits,\u201d said the report.<\/p>\n \u201cFor new players and regional independents, the Canadian grocery industry is tough to break into. Canada is a big country and opening new grocery stores is expensive and difficult. The industry\u2019s big players operate thousands of stores and are well entrenched in the shopping habits of Canadians.<\/p>\n \u201cIn recent years, industry concentration has increased, and it has become more difficult than ever for businesses to enter, expand, and compete effectively. Furthermore, the price Canadians pay for groceries has been rising fast. Factors such as higher input costs, Russia\u2019s invasion of Ukraine, and supply chain disruptions have contributed to recent increases in the price of food. But we have also seen a longer-term trend that pre-dates those events, of Canada\u2019s largest grocers increasing the amount they make on food sales.\u201d<\/p>\n The report said Canada needs solutions to help bring grocery prices in check. More competition is a key part of the answer.<\/p>\n The Bureau launched its\u00a0Retail Grocery Market Study\u00a0on October 24, 2022.\u00a0The study examined various issues with the goal of recommending measures that governments can take to help improve competition in the sector.<\/p>\n \u201cWith inflation on the rise, Canadian consumers have seen their purchasing power decline. This is especially true when buying groceries. In fact, grocery prices in Canada are increasing at the fastest rate seen in 40 years,\u201d said the Bureau at the time.<\/p>\n \u201cMany factors are thought to have impacted the price of food including extreme weather, higher input costs, Russia\u2019s invasion of Ukraine, and supply chain disruptions. Are competition factors also at work? To find out, the Bureau will study this issue from now until June 2023.\u201d<\/p>\n The study examined three main questions:<\/p>\n 1.\u00a0To what extent are higher grocery prices a result of changing competitive dynamics?<\/p>\n 2.\u00a0What can we learn from steps that other countries have taken to increase competition in the sector?<\/p>\n 3.\u00a0How can governments lower barriers to entry and expansion to stimulate competition for consumers?<\/p>\n On Tuesday, the Bureau said it also needs to approach its work in the grocery industry with heightened vigilance and scrutiny to ensure that Canadians benefit from greater choice and more affordable groceries.\u00a0<\/p>\n \u201cWe need to thoroughly and quickly investigate allegations of wrongdoing, and\u00a0we need the power to act\u00a0when issues arise. Therefore, in addition to the above recommendations for governments across Canada, the Bureau commits to taking the following three steps to better promote competition in the Canadian grocery industry:<\/p>\n 1.\u00a0Approach our work in the Canadian grocery industry with heightened vigilance and scrutiny.<\/p>\n 2.\u00a0Provide a pro-competitive perspective to support the implementation of Canada\u2019s grocery code of conduct.<\/p>\n 3.\u00a0Revisit the findings of this study in three years to assess progress on recommendations made to government,\u201d it said.<\/p>\n \u201cChange will take time. These solutions will not bring Canadians\u2019 grocery bills down immediately. But by acting now, governments at all levels can take steps toward creating a more competitive grocery industry in Canada.\u201d<\/p>\n<\/div>\n![\"\"](\"https:\/\/retailinsider.b-cdn.net\/wp-content\/uploads\/2023\/06\/IMG_5353-1200x900.jpg\")
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