Cdn. Industry Minister says he is working to bring in more competition to the grocery market

Industry Minister François-Philippe Champagne is once again insisting that he is reaching out to international grocers in the hopes they will open up shop in Canada and spur more competition.

Champagne said on Jan. 30 that he’d spoken to one foreign grocer that very morning as part of his efforts to court new players for the Canadian grocery sector — but he’s not naming any names.

“I can’t tell you too much, or else you won’t ask me questions next week,” he said in French in advance of the weekly cabinet meeting.

“I spoke with one company this morning.”

As food inflation rages on, Champagne has repeatedly teased in recent months the conversations he says he’s been having with foreign grocers.

Canada needs more competition for grocery dollars, and having more players in the market would help put downward pressure on prices, he said.

“Am I going to succeed? I don’t know. But certainly, it’s worth trying.”

The focus on attracting international grocers comes after Champagne’s largely futile attempt to push Canadian grocers to help bring grocery prices under control.

He met with Canadian grocers in the fall and demanded they create plans to stabilize grocery prices or face consequences including potential tax measures.

But beyond expressing disappointment that the grocers have not been more transparent, Champagne has stayed mum on whether the federal government plans to punish them for it.

“Large grocers have not, to date, been sufficiently transparent about the causes of food inflation and they have failed, for the most part, to provide regular updates on initiatives aimed at stabilizing food prices in the country,” he wrote in a letter on Jan. 29 to Matthew Boswell, Canada’s competition commissioner.

“The continued record profits in the grocery retail sector indicate that there are more opportunities to bring relief for Canadian consumers.”

Metro Inc. reported a first-quarter profit of $228.5 million on Jan. 30, with sales up by 6.5 per cent. In a virtual press conference, CEO Eric La Flèche said retail price increases will start coming to grocery stores as soon as next week, as an industry-wide blackout period on supplier price increases comes to an end.

La Flèche has said Metro did not alter its prices in response to the meeting with Champagne.

Champagne’s letter to Boswell suggested a follow-up study on the grocery sector, now that the bureau has new powers to subpoena companies for information.

“I was disappointed to learn that the bureau’s study did not benefit from the full co-operation of large grocers,” the letter said.

“I also look forward to discussing your assessment on the potential scope and feasibility of a follow-up grocery market study.”

Metro fully co-operated with the previous study, La Flèche insisted on Jan. 30.

The Competition Bureau published the findings of its study in June, saying that the co-operation of grocers was inconsistent and less than comprehensive.

The report found that concentration in the grocery industry has increased in recent years, and the largest grocers have increased their profits from food sales.

The bureau also said Canada’s grocery sector needs more competition to help keep food prices down, give shoppers more choice and encourage new entrants.

On Jan. 30, a spokesman for the bureau confirmed it had received the minister’s letter and is considering it.

“We’re committed to promoting greater choice and more affordable groceries for Canadians through increased scrutiny of the grocery industry and by thoroughly and quickly investigating allegations of wrongdoing,” Marcus Callaghan said.

“The bureau is also committed to using the new tools made available through recent amendments to the Competition Act wherever necessary to protect competition.”

The Liberal government recently made several changes to the country’s competition law, which included giving the bureau the power to compel information from companies for a market study.

The changes also empower the bureau to go after anti-competitive collaborations between businesses, even if they are not competitors.

Champagne said this will help boost competition in the grocery sector, given it will allow the bureau to challenge leasing agreements that bar competitors from opening up shop nearby.