From ‘Greedflation’ to Government Scrutiny: A Rollercoaster Year for Canada’s Grocery Industry [Op-Ed]

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In an era where food inflation has become a contentious political issue, it’s all too tempting for politicians to target the grocery industry. Sadly, that’s exactly what transpired in our country this year, and it was both absurd and embarrassing. The government and Parliament relentlessly hounded our grocers, drowning out the opportunity for Canadians to truly comprehend the intricacies of food inflation amid the cacophony of political theatrics.

The recent “greedflation” campaign, while amusing, highlights a collective amnesia regarding why companies exist and the power of market forces. The sustainability of the grocery business in Canada hinges on profits and a profound understanding of market dynamics.

In 2023, grocers made three visits to Ottawa. On March 8, they appeared in Parliament, followed by a meeting with Minister Francois-Phillippe Champagne on September 18, and a final appearance in Parliament in November. Regrettably, these visits yielded little more than media photo ops that pleased industry critics. And it’s not over. More visits are coming.

The notion of compelling competitors to divulge sensitive pricing data is baffling. Such an approach contradicts the very essence of a competitive marketplace. It’s akin to gathering all NHL hockey teams in a room to share their winning strategies or, worse yet, asking teams to tie every game and assign goal quotas to players like Connor McDavid. It’s simply senseless.

Many politicians this year have demonstrated a limited grasp of the fundamental principles governing competitive markets. In a genuinely competitive market, centralized coordination among market participants is non-existent, period. Ottawa’s inclination towards direct market intervention runs counter to the principles necessary for encouraging increased investment and enhancing market competitiveness.

Canadians first learned about a price-fixing scandal that raised the wholesale price of bread in 2017, when Loblaw and George Weston revealed their part in it. A worker restocks shelves at an Atlantic Superstore grocery in Halifax in January 2022. THE CANADIAN PRESS/Kelly Clark

While the bread price-fixing episode was undoubtedly wrong and disgraceful, there’s a genuine concern that the government’s actions may inadvertently foster the re-emergence of similar schemes. Ottawa seems to be drifting closer to a government-coordinated effort that leaves many, including analysts and some backbenchers, deeply uncomfortable.

Let’s hope that 2024 ushers in more reason and tranquillity for both the industry and the government, though the polls will ultimately decide. As much as we acknowledge that grocers, like any other sector, deserve scrutiny, 2023 was a nadir in our history. Consumer trust is currently at an all-time low, not necessarily due to the industry itself but because it has been weaponized for political gain. Despite this, we should be grateful to our grocers for their unwavering commitment to feeding Canadians and providing one of the most affordable and safest food baskets globally, even if some politicians have conveniently forgotten or chosen to ignore this fact.

Amid this turbulent year, it’s crucial to remember that the grocery industry plays an indispensable role in every Canadian’s daily life. These businesses have continuously adapted to challenges, ensuring that store shelves remain stocked, offering a lifeline of sustenance during uncertain times. As 2024 approaches, let’s hope for a more collaborative and understanding relationship between the industry and the government, one that empowers the market and prioritizes the well-being of Canadian consumers. It’s time to move beyond theatrics and focus on practical solutions that benefit everyone.

Sylvain Charlebois
Sylvain Charlebois
Dr. Sylvain Charlebois is Senior Director of the Agri-Foods Analytics Lab at Dalhousie University in Halifax. Also at Dalhousie, he is Professor in food distribution and policy in the Faculty of Agriculture. His current research interest lies in the broad area of food distribution, security and safety, and has published four books and many peer-reviewed journal articles in several publications. His research has been featured in a number of newspapers, including The Economist, the New York Times, the Boston Globe, the Wall Street Journal, Foreign Affairs, the Globe & Mail, the National Post and the Toronto Star.

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