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Grocery CEOs meet with federal ministers, agree to work to stabilize food prices

Ministers met with executives from Loblaw, Metro, Empire, Walmart and Costco
parliament building

Top executives from Canada's major grocery chains have agreed to work with the federal government on stabilizing prices, Industry Minister Francois-Philippe Champagne said on Monday (Sept. 18), but few details have been divulged about how that will be achieved.

Champagne and Finance Minister Chrystia Freeland met with executives from Loblaw, Metro, Empire, Walmart and Costco on Monday morning.

"They have agreed to support the government of Canada in our efforts to stabilize food prices in Canada,'' Champagne told reporters after the meeting.

Calling the meetings historic and constructive, the industry minister said he told the grocery CEOs "in no uncertain terms'' that Canadians expect them to take action.

READ: Independent grocers defend chains against food inflation accusations

Prime Minister Justin Trudeau announced last week that Ottawa is asking major Canadian grocers to come up with a plan by Thanksgiving to stabilize prices. Trudeau warned that if the plan is not good enough, the federal government will take further action and it is not ruling anything out, including tax measures.

Speaking to reporters Monday afternoon, Trudeau reiterated the federal government is going to make sure the major grocers have a plan.

"Food is too expensive for too many families and (grocers are) making record profits,'' Trudeau said.

However, the Liberals haven't indicated what they would like to see the grocers do or how these chains could bring stability to grocery prices.

Instead, Champagne said in French that he wants the grocers to come up with their own individual plans, so as to protect competition.

"Now you want to let them compete against each other so Canadians can see the benefits of competition,'' he said.

READ: Confusion over drivers of food inflation creating consumer distrust of grocers

Champagne is expected to meet with other segments of the food industry as well to talk about rapidly rising prices.

Grocery prices are rising at a slower annual pace, up 6.9% in August from a year ago compared with a reading of 8.5% in July. Grocery prices fell by 0.4% between July and August.

But the industry has pushed back on the idea that they're to blame for high grocery prices.

The Retail Council of Canada said in a statement last week that grocer prices profits have nothing to do with the rising cost of food, pointing instead to higher costs being passed on from food manufacturers and producers.

READ: The ‘greedflation’ campaign needs to end, now

Empire CEO Michael Medline told reporters on Monday afternoon the meeting was "very productive,'' but did not answer questions about whether it will actually lead to lower prices.

Nor would Metro CEO Eric La Fleche.

"We're all committed to finding solutions to stabilize prices and bring down the (consumer price index) on the food side,'' he said, calling high prices an "industry issue.''

When pressed by reporters about whether prices will come down, La Fleche said "prices fluctuate every week in our industry,'' and noted that the discussions were about consumer packaged goods rather than fresh foods such as produce, dairy and meat.

The other three executives in attendance did not stop to speak with reporters after the meeting.

READ: What the grocery report recommends to improve competition

With affordability concerns top-of-mind for Canadians, the Liberals are looking outside the border for potential solutions to rising grocery prices.

During his news conference, Champagne noted that food inflation is a global issue, and that the government is speaking with its French and British counterparts about how to respond.

The French government reached a three-month agreement with supermarket chains for them to cut prices on hundreds of staples and other foods, which is expected to be extended through the summer. Britain where food inflation has reached 45-year highs is discussing a similar move.

Other European countries have mandated price controls for staple foods.

"We've been following what Carrefour has been doing in France, and even shaming in public those who don't want to be part of the solution,'' said Champagne, adding that if CEOs don't want to co-operate, he will take his message to the grocers' boards.

The federal government is also pursuing changes to the Competition Act that would strengthen the Competition Bureau and give it the power to take action on corporations that work together to stifle consumer choice specifically citing large grocery stores that have prevented competitors from setting up shop nearby.

NDP Leader Jagmeet Singh introduced his own private member's bill Monday, which seeks to give more powers to the Competition Bureau to crack down on price gouging by grocery stores while giving them more tools to protect consumers.

With files from The Associated Press

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