"This limited our ability to fully answer some questions that are top of mind for Canadians." "While many grocers were happy to speak with us, others were more reluctant to share information," the bureau said. It was also limited in that ultimately, the bureau doesn't have the power to force companies to disclose information. "We did not set out to explain or understand all the reasons why grocery prices have increased," said Anthony Durocher, deputy commissioner at the bureau. While the bureau's report covered a lot of ground, it was limited in its scope in that by design it did not delve into some parts of the grocery supply chain that might contribute to higher prices - specifically the relationship between retail stores and their suppliers. New 'Code Of Conduct' pitches rules for grocers - but few details on punishment for breaking them.Known as restricted covenants in contracts like leases, such clauses can hinder competition by making it impossible for someone else to use the space to open a grocery store, even if the original grocery store closes down. "Many of the locations that could support a new grocery store are already controlled by the grocery giants," the report found. "Independent stores generally aren't, and that can put them at a disadvantage," the bureau said.Įven finding real estate to open a new store can be a challenge, because they generally need a large, accessible space with the capacity for parking. Large chains also get paid by suppliers to put their products on shelves in the first place. "According to independents, this dependency makes it more difficult for them to compete on price," the bureau said. That's because many of them are forced to buy their wares from the big chains in the first place. Independent grocery chains are often a great alternative, but they don't take up as big a portion of the market as they do elsewhere, the bureau said. (Competition Bureau) Big chains have unfair advantages But by acting now, governments at all levels can take steps toward creating a more competitive grocery industry in Canada."Ĭanada's three big grocery chains own a slew of brands up and down the value chain. "Change will take time," the bureau said. "These solutions will not bring Canadians' grocery bills down immediately. Limit property controls, which currently restrict how real estate can be used by competing grocers, making it difficult, or even impossible, for new stores to open.Introducing legislation to mandate harmonized unit pricing requirements, which will make it easier for consumers to comparison-shop for deals.Policies from all levels of government to encourage new independent and international players to set up shop in Canada.To establish a Grocery Innovation Strategy aimed at supporting the creation of new types of grocery businesses, specifically ones that only sell online.To that end, the bureau recommended four broad policies aimed at spurring competition in the sector. They are: "More competition is a key part of the answer." "Canada needs solutions to help bring grocery prices in check," the bureau said. In the report, the bureau found the industry is not as competitive as it could be, and consumers are paying the price for it. Together, those 5 companies combine for more than three-quarters of all the food sales in Canada. The bureau spent months examining many aspects of Canada's grocery business, which is dominated by three domestic giants - Loblaws, Metro and Sobeys owner Empire - along with foreign players like Walmart and Costco. The report, published Tuesday, is the result of a probe that Canada's top competition watchdog launched last year, when concern over food prices hit a fever pitch. Canada's grocery business is controlled by large players and needs government assistance to encourage new entrants to bring down prices, a report from the Competition Bureau says.
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