Champagne says he wishes grocers were more ‘forthcoming’ on plans to stabilize prices

OTTAWA –

Industry Minister Francois-Philippe Champagne says he wishes Canadian grocers would be more forthcoming with the public about their plans to stabilize prices.

Earlier this month, Champagne announced that major Canadian grocers — Loblaw, Metro, Empire, Walmart and Costco — submitted initial plans to the federal government for how they will stabilize prices in the face of high inflation.

The Liberal government summoned the heads of the companies to meet in Ottawa last month, demanding that they present such a plan by Thanksgiving or face potential tax measures.

At the announcement on Oct. 5, Champagne said that those plans included discounts, price freezes and price-matching campaigns. He didn’t divulge many details at the time, saying he wanted the grocers to compete with one another.

But in an interview with The Canadian Press on Monday, Champagne said he wishes the grocers were willing to be more open.

“I wish they would be more forthcoming,” Champagne said. “They’ve been outlining to us the kind of things (they) intend to do, but I think they have perhaps historically been different in how they approach the market. They say, ‘We’re going to tell the market when we do it,’ but they are a bit concerned of telling in advance what they’re going to do.”

The Canadian Press reached out to the grocers last week to request more details on their pledges to the federal government. Loblaw and Costco did not respond and Metro declined to comment. A spokeswoman for Walmart said the company promised to continue offering “everyday low prices,” which refers to its strategy of offering low prices on a regular basis, rather than on promotion only.

Meanwhile, a spokeswoman for Sobeys, which is owned by Empire, responded on Friday to say the company isn’t disclosing its plan for competitive reasons.

“Our plans are competitively sensitive and we do not plan to discuss them before they are launched in our stores,” said Karen White-Boswell, Empire’s director of external communications.

That is in contrast to the way a similar situation has played out in Europe over the last year.

In the U.K., grocery giant Asda announced in June its plans to freeze prices on 500 products until the end of August. The French government reached a three-month agreement with supermarket chains earlier this year for them to cut prices on hundreds of staples and other foods.

Although Champagne has regularly pointed to these countries as examples to follow, he said Canadian grocers aren’t used to government intervention, and calling them into a meeting in Ottawa was already a big step for the federal government to take.

“We’re shaking the tree,” Champagne said. “This is not a regulated industry (like) telecom where they’re used to working with government to achieve outcomes.”

The decision to pressure grocers to tackle rising prices was part of a set of measures announced by Prime Minister Justin Trudeau following a Liberal caucus retreat in September that was meant to address affordability and housing.

“During the summer, I think all of us went out and listened to Canadians about everywhere. And it became very clear when we met at our retreat with caucus that what we heard from Canadians was really around housing and around affordability,” Champagne said.

Polling over the summer revealed support for the governing Liberals has fallen, largely to the benefit of the Conservatives, who have focused on affordability issues for months.

The Liberals have said getting grocers to stabilize prices is a way of taking immediate action to address people’s financial anxieties, but Champagne acknowledged during the interview that the solution to high grocery prices, in the long run, depends on competitive forces.

“(The) bottom line is that three companies in Canada, three large grocers control more than 60 per cent of the market. And the best way to address that and stabilize prices over the mid- to long-term is to create more competition,” Champagne said.

The Liberals have also introduced legislation that would make several changes to the country’s competition law, including empowering the Competition Bureau to go after anticompetitive collaborations, such as real estate agreements that prohibit a competitor from opening shop nearby.

The federal government has long pledged a broader overhaul of the Competition Act, something many experts are hoping for as well.

Champagne said that reform is going to happen, though he wouldn’t say when.

This report by The Canadian Press was first published Oct. 17, 2023.