According to the Competition Bureau Canada, the federal competition regulator will be commencing a market study of grocery store competition in Canada. The study will examine various issues with the goal of recommending measures that governments can take to help improve competition in the sector.
"With inflation on the rise, Canadian consumers have seen their purchasing power decline. This is especially true when buying groceries. In fact, grocery prices in Canada are increasing at the fastest rate seen in 40 years," a release stated. "The objective of the study is to explore how governments across Canada can act to promote greater competition in the grocery sector. More competition can lead to lower prices, more convenience, and more innovation."
Though there are many factors that may be contributing to the high cost of groceries and foodstuffs, including extreme weather, higher input costs, Russia's invasion of Ukraine, and supply chain disruptions, the regulator is also posing the question of whether there are competition factors also at work. Three key areas the study will encompass will be to what extent are higher grocery prices a result of changing competitive dynamics, what can be learned from steps that other countries have taken to increase competition in the sector, and how can governments lower barriers to entry and expansion to stimulate competition for consumers?
"In this study, we will focus on competition in the grocery sector and why prices are so high right now. Some people say it is because inflation has made it more expensive for grocers to buy the products that they sell. Others say that grocers are charging higher prices because they do not face enough competition. We want to better understand these issues. We also want to know what Canada can do to make it easier for new businesses to compete and innovate."
During the study, the Bureau will engage with a wide range of stakeholders, including grocery retailers of all sizes, industry experts and all levels of government, though the bureau underlined that this study is not a law enforcement investigation.
"We are not examining any specific allegations of wrongdoing. However, if we do find evidence during this study that someone may be doing something against the law, then we will investigate and take appropriate action. During the study, we will talk to grocery retailers of all sizes. We will talk to governments at the federal, provincial, territorial, and municipal levels. We will talk to experts who study Canada’s grocery industry. And we will talk to people around the world to learn from best practices."
Interested parties can get involved by providing submissions in writing or via oral interviews. Submissions are due by December 16, 2022. The Bureau will study the issue from now until June 2023.
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