Global Courant
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GATINEAU, Que. Canada’s competition watchdog has found that the Canadian grocery industry needs more competition to keep food prices down and encourage new entrants.
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In a highly anticipated study published Tuesday, the Competition Bureau said concentration in the grocery industry has increased in recent years, with the largest grocers earning more from food sales.
Most Canadians buy groceries from stores owned by a handful of grocery giants, with Canada’s three largest grocers — Loblaws, Sobeys and Metro — collectively reporting more than $100 billion in sales and $3.6 billion in profits last year, so the study showed.
“Canada needs solutions to control food prices,” the study said. “More competition is an important part of the answer.”
The competition watchdog makes four recommendations to improve competition and lower prices, including an innovation strategy to support new grocery stores and increase consumer choice.
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It also recommends that governments encourage the growth of independent grocers and international grocers’ access to the Canadian market, standardize unit prices to help Canadians easily compare food prices, and limit food industry property controls that make it difficult to – or even make it impossible – to open new stores.
Meanwhile, the Bureau said it must also approach its work in the grocery industry with “heightened vigilance and scrutiny” to ensure Canadians benefit from more choice and more affordable groceries.
“We need to thoroughly and promptly investigate allegations of misconduct, and we need the authority to act when problems arise,” the study said.
The competition watchdog has committed to taking steps to better promote competition in the Canadian food industry, including by providing an pro-competitive perspective to support implementation of the Canadian Food Code of Conduct.
It has also committed to review the findings of its inquiry within three years to assess progress on the recommendations it has made to the government.
This report from The Canadian Press was first published on June 27, 2023.
Companies in this story: (TSX:L), (TSX:EMP.A), (TSX:MRU).
