Reference to the CFA’s Advocacy Update from October 27, 2022

Canada’s Competition Bureau says it is launching a study on competition in the grocery industry. The agency said in a press release Monday that it plans to investigate various issues in the grocery industry, “with the goal of recommending measures that governments can take to help improve competition in the sector.”

The bureau functions as perhaps Canada’s most prominent consumer watchdog group by investigating anti-competitive practices that serve to push up prices for consumers, including things like deceptive marketing, price-fixing, and even outright fraud.

The bureau says the move isn’t in reaction to any specific allegation of wrongdoing, but it comes as consumers grapple with food prices rising at their fastest pace in more than 40 years.

Last week, new data showed that while Canada’s inflation rate eased to 6.9 per cent, the prices of food purchased at stores still rose by more than 11 per cent. The price of food has been going up at a faster pace than the overall inflation rate for 10 months in a row now.

Many factors have been blamed for the rapid escalation in food prices, including extreme weather events, higher input costs, and temporary supply chain stresses such as the current invasion of Ukraine. But the bureau says it wants to try to understand if there are any anti-competitive factors at play, so it’s seeking answers to three broad questions:

• To what extent are higher grocery prices a result of changing competitive dynamics?
• What can we learn from steps that other countries have taken to increase competition in the sector?
• How can governments lower barriers to entry and expansion to stimulate competition for consumers?

The bureau says that the relationship between grocery chains and their suppliers will not be included in the study.

The bureau is seeking input from the public on the issue. Anyone wishing to contribute is invited to contact the bureau through its website before Dec. 16. When its investigation is complete, the bureau says it plans to publish its results, with a list of recommendations of how to fix problems it uncovers, if any. That report is expected next June.