Industry minister urges Competition Bureau to conduct followup study of grocery prices

Innovation, Science and Industry Minister François-Philippe Champagne is calling on the Competition Bureau to use its new powers to take another look at the cost of groceries in Canada.

Last June, the bureau released a report that said Canada's grocery sector lacks competition. The industry is dominated by three domestic giants — Loblaw, Metro and Sobeys owner Empire — along with foreign players like Walmart and Costco.

On Monday, Champagne sent a letter to Matthew Boswell, the competition commissioner, to complain about what he called the grocery companies' lack of co-operation with the bureau's study, which led to last summer's report.

"I was disappointed to learn that the Bureau's study did not benefit from the full co-operation of large grocers. Large grocers have not, to date, been sufficiently transparent about the causes of food inflation," Champagne wrote.

In his letter, Champagne points out that the government recently overhauled the Competition Act to give the Competition Bureau more powers — including the power to subpoena information from companies when conducting market studies.

"The government put in place these new authorities as we believe this will give rise to meaningful enforcement actions as you carry your work forward," Champagne wrote.

The Competition Bureau is an independent government body in charge of ensuring healthy competition between companies in Canada.

While a minister cannot direct the bureau to take a specific action, Champagne told reporters on Monday he believes the bureau will use its new powers.

"I am confident that the bureau will take full advantage of the new powers granted to them to further address the concerns of Canadian consumers when it comes to the price of food," he said.

A spokesperson for the Competition Bureau said it is considering the minister's letter and will put investigations of the grocery industry "front and centre" in its work.

"Protecting and promoting competition in the retail grocery industry continues to be a priority for the Competition Bureau," Marcus Callaghan said in a media statement Tuesday. "We're committed to promoting greater choice and more affordable groceries for Canadians through increased scrutiny of the grocery industry and by thoroughly and quickly investigating allegations of wrongdoing."

Callaghan added that the bureau is committed to using the new tools in the Competition Act "wherever necessary in order to protect competition."

The rising cost of food has outpaced overall inflation in the past few years. Earlier this month, Statistics Canada said the country's annual inflation rate was 3.4 per cent in December, while food inflation stood at 4.7 per cent.

Champagne convened a meeting in the fall with the heads of the five large grocery chains and later said they had agreed to work on stabilizing grocery prices.

But his letter to the Competition Bureau suggests that plan hasn't worked out as the government hoped.

"[The grocery companies] have failed, for the most part, to provide regular updates on initiatives aimed at stabilizing food prices in the country," the minister wrote.

Champagne wrote that he hopes to discuss the possibility of a follow-up study with the competition commissioner.