The Competition Bureau announced Tuesday it will undertake an “examination of competition across Canada’s food supply chain.”
Food prices have risen sharply in recent years, putting significant pressure on Canadian households. While many factors influence food prices, competition plays an important role in keeping prices in check and giving Canadians more choice, it explained.
The Bureau said its examination will look for potential competition issues in three key areas:
- Production and processing, including how food is grown, caught, transformed and packaged;
- Transportation and distribution, including how food moves to retailers across Canada; and
- Retail pricing practices, including loyalty programs, pricing algorithms, shrinkflation and skimpflation.
The Bureau said it is seeking input from Canadians and organizations with experience in the food supply chain. They are invited to share their views through an online form by July 31. The Bureau said it will also meet with groups and hold roundtable discussions in the coming months to determine where competition is not working well, where there are barriers, and what could help improve competition.
The Bureau added it will publish a final report in spring 2027. The report will share findings and make recommendations to governments on how competition can be strengthened across the food supply chain.
“If the Competition Bureau wants to understand why food affordability remains a challenge in Canada, it needs to look beyond grocery store shelves. The biggest barriers to competition often exist upstream—in processing, distribution, transportation, and even local property controls that prevent new food retailers from entering markets. This broader examination is long overdue,” said Dr. Sylvain Charlebois is Senior Director of the Agri-Foods Analytics Lab at Dalhousie University in Halifax.
“Competition matters, but Canadians should not expect a silver bullet. Food prices are influenced by labour costs, regulations, productivity, currency fluctuations, climate events, and global market conditions. More competition can help, but affordability ultimately depends on building a more productive and competitive food system from farm to fork.
“The Bureau’s 2023 study concluded that Canada needs more grocery competition. This new examination recognizes an important reality: the problem isn’t just retail concentration. Canada’s food affordability challenge is rooted in an entire supply chain that has become less competitive over time.”
For more information on the examination and how to participate, visit the Competition Bureau’s website.
“The cost of food matters to all Canadians, and strong competition can help keep prices in check. Our examination builds on our earlier work in the retail grocery sector and will look at all parts of the food supply chain. If you have experience in any sector along that supply chain, we want to hear from you. Your input will help us find solutions that support competition and affordability,” said Jeanne Pratt, Interim Commissioner of Competition.
The Bureau said the examination builds on its 2023 retail grocery market study, Canada Needs More Grocery Competition.
“This is not a market study. It is a broader approach to understand where engagement from the Bureau is needed going forward, and where policymakers may be able to take action,” it said.
“The Bureau does not set prices. We examine whether markets are working competitively and whether barriers may be limiting competition.
“This examination is not a law enforcement investigation and is not about any specific complaint or allegation of wrongdoing. However, if the Bureau finds evidence of anti-competitive behaviour, it will investigate and take appropriate action.”
Bruce Winder, a retail analyst, said: “From what I understand, the retail part of the Canadian grocery industry was already studied from a competition perspective at length in 2023. Studying it again may waste resources and come off as performative.
“However, I do think that the upstream parts of the sector need to be reviewed. These parts include suppliers such as large global consumer packaged goods (CPG) firms. There has been significant consolidation on the vendor side over the last 20 years. Just a handful of food companies control most of the international market. These large global CPG firms generate significantly more margin than Canadian grocers. But the Bureau should also examine production, processing, transportation and distribution as well.
“If one does reflect on the retail side, Canada is one of a few markets where the big global grocery retailers (Walmart and Costco) already own about 1/3 of the market and have been growing. The retail side has razor thin margins (3-4% net ) and is already incredibly competitive. I think as a country we want to avoid a race to the bottom where innovation and employment would suffer.
“I have written much about surveillance pricing recently, especially in the grocery sector. Any regulation would be a solution looking for a problem. The big three Canadian grocers have indicated publicly that they are not using it. Consumers would quickly find out and punish any offending grocer as a result. We also want to be careful we don’t get rid of loyalty programs and other incentives as a result of any proposed government intervention.”
George Minakakis, Founder and CEO of the Inception Retail Group, who lives in the Halton Region of Ontario, said he learned a few months ago that 20% of households experience food insecurity.
“In Toronto, it’s nearly 25%. While those statistics are concerning, they do not automatically point to a single cause, nor do they necessarily indicate a lack of competition among grocers or suppliers,” he said.
“It is prudent for the Competition Bureau to examine whether competitive factors are affecting food affordability and whether consumers are receiving the full benefits of a competitive marketplace.
“Food affordability is influenced by a complex ecosystem of factors, including inflation, supply chains, labour costs, transportation, energy, taxation, consumer demand, and market competition. Since COVID, many of these cost pressures have created affordability challenges for households across the country.
“One area that warrants closer examination is how technology, data analytics, and loyalty programs influence pricing strategies and consumer purchasing behaviour. There is nothing inherently wrong with targeted promotions or personalized offers; they can create significant value for consumers and retailers alike. Yet, one question is: Are sophisticated tools like AI inadvertently changing how different customer segments experience food affordability?
“Whatever the findings, food affordability is ultimately an economic issue with multiple factors beyond a grocer’s control.”
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