Canada's most authoritative and exciting grocery b2b publication
Industry NewsHouse of Commons committee urges action on 'excessive' food prices and profits

House of Commons committee urges action on ‘excessive’ food prices and profits

A House of Commons committee studying food prices is urging the federal government to consider policies to tackle “excessive net profits” according to a report from the Canadian Press. 

It is a long-awaited report on food affordability, entitled “A Call To Action: How Government and Industry Can Fight Back Against Food Price Volatility”

According to the committee, the government should investigate measures to curb the profits made in “monopolistic and oligopolistic sectors in the food supply chain,” as they are allegedly driving up costs for both farmers and consumers.

The report presented last week provided an overview of its investigation into the factors contributing to food inflation and insecurity in Canada, taking into account testimony from grocery executives over the previous few months.

The committee’s report included several recommendations, ranging from lowering entry barriers for foreign businesses into Canada to strengthening merger laws in the legislative domain.

According to Food Health and Consumer Products of Canada (FHCP) and its CEO Michael Graydon, who is quoted in the report, includes several positive recommendations for government actions that align that FHCP says closely with its long-standing advocacy efforts. Among them is recommendation 7 in which the committee recommends the federal government establish a process to engage with the provinces and territories to discuss the enactment of legislation applying the Grocery Code of Conduct while respecting their jurisdictions. This recommendation quotes from the testimony offered by Graydon to the Committee regarding the possibility that a mandatory Code, with provincial cooperation, might eventually be needed if a voluntary agreement can not be reached.

The report comes at a time when Loblaw has already signed on to the Grocery Code of Conduct. The goal of the industry-led code is to enable smaller businesses in the sector compete on an even playing field.

Loblaw, Walmart Canada, Costco and Empire have all faced government leaders over its profits amid high food inflation, which grocers have said they haven’t profited from. 

Though intended to be voluntary, pressure to make it a law has increased in recent months as several of the larger grocery stores didn’t seem to be eager to join on.

Last week, François-Philippe Champagne, Canada’s minister of Innovation, Science and Industry of Canada, called for Walmart and Costco to sign on to the Grocery Code of Conduct. 

Following Loblaw’s decision to support the code, Champagne says that the government would continue to push for the two retailers and other independents to sign on. 

The report also follows news that the Competition Bureau is now looking into the use of lease agreements with restrictive clauses in the grocery business. The bureau says that these regulations limit competition in the market.

Read the full House of Commons

Read the full report of the Standing Committee on Agriculture and Agri-Food.

Follow us:

Recent Issues

Related Articles